Azure Waters [2011] QBCCMCmr 419 (26 September 2011)

Last Updated: 17 October 2011

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

CITATION:	Azure Waters [2011] QBCCMCmr 419
PARTIES:	Michael Kenny, Occupier of Lot 3 (applicant) Body Corporate for Azure Waters (respondent)
SCHEME:	Azure Waters CTS 28537
JURISDICTION:	Body Corporate and Community Management Act 1997 (Qld), (Act), ss 227(1)(b), 229(3)(a) Body Corporate and Community Management (Standard Module) Regulation 2008 (Standard Module)
APPLICATION NO:	0337-2011
DECISION DATE:	26 September 2011
DECISION OF:	I Rosemann, Adjudicator
CATCHWORDS:	OCCUPATION AUTHORITY – whether the body corporate validly granted an occupation authority over a common property room– whether commercial tenants and their staff should be able to access the room. MAINTENANCE – whether the body corporate must keep the common property room clean – whether the body corporate must engage contract cleaners in respect of the room. Accommodation Module, ss 134, 157

ORDERS MADE:

I hereby order that Motion 2 passed at the extraordinary general meeting of the Body Corporate for Azure Waters on 28 April 2011, purporting to authorise a deed of variation to grant an occupation authority, was at all times void. I further order that the Body Corporate for Azure Waters shall ensure that all occupiers of lots in the scheme who wish to access the area of common property, known as a transit room or staff amenities room, are provided with keys for that room. I further order that the application to “Direct the Body Corp to hire contract cleaners for the staff amenities room, so that it is maintained in a proper hygienic, and usable condition” is dismissed.

REASONS FOR DECISION
Introduction

[1] This application relates to a dispute over the right to use a room on common property. The room is variously referred to by the parties as a transit/day facility or a staff amenities room. The applicant claims staff from the commercial lots previously used the room. In 2009 the resort managers locked the room and denied occupiers access to it. The commercial lot occupiers disputed this. In April 2011 the Body Corporate passed a resolution giving the resort managers an occupation authority over the room. The applicant seeks to overturn this decision and reinstate access to the room. He also wants the Body Corporate to keep the room clean.
[2] The key question is whether the Body Corporate has validly granted an occupation authority over the room. This will require consideration of whether an occupation authority is necessary for the resort managers to undertake their contractual obligations and whether it would unreasonably interfere with others use and enjoyment of the common property. There is also a further question about the Body Corporate’s maintenance obligations in respect of the room.

Preliminaries

Application

[3] Azure Waters community titles scheme 28537 (Azure Waters) consists of 27 lots and common property. The community management statement (CMS) shows the Accommodation Module applies to the scheme. The scheme is registered as Survey Plan 132058.
[4] This application was lodged under the Act on 13 April 2011, seeking the following orders:

1. I am seeking to have the staff amenities room, which is common property, opened so that tenants and employees may use the room.
2. I am seeking to have any motion that may be passed at the EGM on 28 April 2011, which relates to any occupation authority, be declared invalid on the grounds of Part 7 Section 134-4 of the BC&CM (Accommodation Module) Regulation 2008.

3. Direct the Body Corp to hire contract cleaners for the staff amenities room, so that it is maintained in a proper hygienic, and usable condition.

Jurisdiction

[5] I am satisfied that this matter falls within the legislative dispute resolution provisions.[1]
[6] An adjudicator may make an order that is just and equitable in the circumstances to resolve a dispute, in a community titles scheme, about: a claimed or anticipated contravention of the Act or the CMS, or the exercise of rights or powers or performance of duties under the Act or the CMS.[2] An order may require a person to act, or prohibit a person from acting, in a way stated in the order. An adjudicator's order may contain ancillary and consequential provisions.[3]

Procedural matters

[7] Initially the applicant lodged an application for conciliation[4]. A conciliation session was held on November 2010 but did not resolve the dispute. Subsequently this application was lodged.
[8] After seeking clarification of some aspects of the application, the Commissioner[5] provided a copy of the amended application to the Body Corporate and invited the Committee, all owners and other affected persons named in the application, to respond to the application. Submissions were made by the Committee Secretary, the resort managers (Daryl and Suzanne Dalgleish), and six other parties. The applicant inspected and responded to the submissions.[6]
[9] A dispute resolution recommendation[7] was made referring the file to department adjudication.
[10] I then investigated the dispute[8], which included reviewing the application and submissions and seeking further information from the parties.

Matters in dispute

[11] The applicant claims the commercial lots (Lots 1-6, which comprise five businesses) utilised the disputed room for many years as a facility for their staff. He claims staff used the room for breaks, meals, to shower and change, and for toilets. The applicant estimates the businesses employ a total of 33 to 49 people between low and high season.
[12] In August 2009 the room was locked by the new resort managers, apparently because of a belief that they were entitled to exclusive use of the room under their management rights contract. It is claimed that the room was locked without notice to any owner or occupier.
[13] The applicant and the other commercial tenants pursued the matter at length with the Body Corporate and the resident managers. They argued the room was common property and so all owners and occupiers were entitled to use it.
[14] In December 2009 the body corporate manager advised the Committee had given the room to the resident managers for a transit room for guests, and the provision of staff facilities was the responsibility of the shop owners and not the Body Corporate. However it was noted the resident managers would consider some controlled access. In July 2010 the applicant noted the room was only being used for storage and not as a genuine day facility. Shortly afterwards another tenant was told that the Committee had put the matter in the resident manager’s hands and the room would become operational for its ‘intended use’ as guest facilities. The email indicated shop owners could get a key to use the facility from the office but that the priority would be for guests. It is not apparent that the shops were given any access to the room, and there appears to have been little communication from the resident managers on the matter.
[15] On 28 April 2011 the Body Corporate held an Extraordinary General Meeting (EGM). Motion 2 was submitted by the resident managers and proposed that the Body Corporate enter into a Deed of Variation of Caretaking Agreement and Authorisation of Letting Agent Agreement to give an occupation authority over the disputed room. The explanatory note for the motion indicates that when the resident managers purchased they believed they had exclusive use of the room but that was not the case. It further said” “The Manager is seeking an occupation authority in relation to the day room facility to enable them to use it for purposes associated with the Caretaking Agreement (storage) and the Letting Agreement (a day room/in transit facility) for guests arriving early or departing late.” The motion passed with 12 votes in favour and one against. It appears the commercial lot owners did not cast votes on the motion.
[16] The Deed inserted a clause into the Caretaking Agreement for the caretaker to have the ‘exclusive right’ to the room “for purposes incidental to the provision of the Caretaker’s Duties”. Similarly, the Deed inserted a clause into the Letting Agreement for the letting agent to have the ‘exclusive right’ to the room “for purposes incidental to the conduct of the Letting Service”.
[17] The applicant indicates that all of the staff of the businesses on the scheme, whether male or female, must now use a single disabled toilet and are left without an appropriate lunchroom. There are suggestions that this may be contrary to employment conditions. There are also allegations that the single toilet facility is not properly maintained and is unhygienic. A further concern is that the loss of the proper staff facilities reduces the value of the commercial lots. The application includes letters from the occupiers of Lots 1, 2, 5 and 6 supporting the claims.
[18] The applicant notes that under section 34(5) of the Act, an occupier enjoys the owners’ rights under the Act to the use of common property. He further refers to section 134 of the Accommodation Module and the requirement that an occupation authority must not unreasonably interfere with the use and enjoyment of a lot or common property. He argues that the removal of access to the room is an unreasonable interference.

Submissions

[19] The submission from the Committee secretary opposes the outcomes sought and includes:

1. The applicant seeks to deny the rights of the majority of owners, as expressed at the EGM. No commercial owners voted on the motion and the applicant did not attend.
2. All of the apartments and most of the businesses have their own facilities. The two businesses that do not, have only one or two staff members at any time.

100. The resort managers maintain a ‘flawlessly clean’ multi-use toilet, which is accessible by all the businesses.

4. Employing contract cleaners would add $250-500 a year to owners’ levies.
5. The plans used to sell the units labelled the area as a transit room. The developer then changed the term without the knowledge of owners.
6. They believe the area was primarily used for storage. The current managers restored the room to its stated purpose as a transit room.
7. The resort managers have the full support of the Committee.

[20] The submission from the resort managers opposes the application and includes:

1. When purchasing the management rights, the day room facility was claimed to be exclusively available to the resort managers.
2. The room was historically used for storage rather than the originally intended transit room for early arriving and late departing guests. The resort has little storage space and in peak times it is inconvenient to store luggage during check-in and check-out.

100. They identified potential security issues. The locks were changed to protect equipment, on the assumption that the room was the exclusive use of the resort management.

4. The room has been in a state of disrepair and closed due to major tiling and plumbing repairs, which have a lower priority for funding. They sought an occupation authority before they committed to and invested in refurbishing and redeveloping the facility.
5. No shop staff are being affected because there was never a staff room. There was only a room which has a toilet and shower facilities, which was used for storage. The room was not developed or used for staff to any extent. Any use would have been very limited. The numbers of staff in the commercial lots has been overstated.
6. A previous commercial tenant says he and his staff never used the room or the toilets.
7. Lots 1, 2 4 and 6 have their own toilet facilities. Only Lots 3 and 5, with a total of three staff, use the resort toilets. There is a unisex toilet within metres of the day room which is maintained hygienically and used by shop staff. At no time have any shop tenants made a complaint regarding the condition of the toilet.

[21] Three submissions from commercial lot tenants (one of whom is also an owner) reiterate the comments they make in the support letters in the application.
[22] An owner of one of the commercial lots is concerned that rights to the area that were attached to the lot that they purchased have been taken away. Her tenants require these facilities and were summarily locked out after nine years of use. She believes it is unreasonable to try and legitimise this wrongdoing with the occupation authority.
[23] The submission from the representative of an owner and former chairperson says that when he was chairperson he instructed that the shop owners be able to use the room as per previous arrangements. He sees no reason why they should not continue to have access. He is of the view that the shop owners are reasonable people who have been treated unfairly.
[24] The submission from another lot owner considers the application is thwarting the genuine attempts of the resort managers to develop the resort and improve the returns to owners. They believe the re-establishment of the day room facility will improve services to guests, which can only benefit the shop owners. They believe it has been used as nothing more than storage. The day room is next to their lot and they feel it would be undesirable for any guest in their apartment being exposed to restaurant staff gathering at the end of their shift.
[25] The applicant’s reply to submissions includes the following:

1. The commercial tenants do not want the room exclusively. They merely seek to access the room. No explanation has been given as to it cannot be a shared facility.
2. How could the resort managers know the use of the room before they purchased the management rights? The former chairperson confirms the room’s use as a staff room.

100. If the resort managers were misled to believe the room was exclusively theirs, their dispute is with the vendors of the management rights and not the tenants.

4. The EGM vote was a forgone conclusion because apartment owners outnumber commercial owners by 20 to 6. Most owners had no idea what they were voting on. The explanatory note described it as tidying up legal paperwork and made no reference to the permanent closure of the staff room. The resort manager asked owners to vote in his favour, but the applicant was denied access to the mailing list to present an alternative case. He could have attended the EGM but most votes were in writing.
5. The resort managers and the Body Corporate have blocked and ignored attempts to resolve this dispute. Why were occupiers rights denied from August 2009 until the EGM in April 2011 when the Body Corporate was well informed of the true situation?
6. He disputes any security issue requiring the changing of the locks. There were only mops and buckets in the room and no incidents of misuse of the room in 11 years. The room was locked, so access was already controlled.
7. Nothing in the explanatory note to the EGM motion suggested the room was essential. The submissions have not argued an occupation authority is necessary for the letting business. The five previous managers operated without exclusive use of the area.
8. It is queried how much storage space is needed when there is only 14 lots in the letting pool and a history of low occupancy. There are areas for pool, BBQ and garden equipment, maids’ stations, a porter’s locker and a double car space.
9. Regardless of whether the commercial lots have toilets or not, they do not have an area for meal breaks, showers, change rooms to get in and out of uniforms, and so on.
10. The secretary claims the disabled toilet is kept clean but he lives in Victoria and only visits once or twice a year. The tenants are on site every day of the year and are in a better position to comment on whether the toilets are clean.
11. When the room was locked and tenants objected, the resort managers retaliated by refusing to clean the single toilet for months. Soap was BYO and only toilet paper was available to dry hands. They made constant complaints about the toilet.

Investigations

[26] Having reviewed the material submitted by the parties and relevant case law, I sought further information from the Body Corporate. The Secretary of the Committee advised as follows:

1. In regard to the developer’s original intentions for the disputed room, marketing documentation and a floor plan is shown referring to a transit lounge.
2. The manager from 2004-2009 advised him that when he took over the room was filled with stored material from the previous managers and this was its only possible use. He restored the room for use by guest and it was used exclusively for storage, guest luggage storage and guest showering. Two former committee members also assert that for most of the period from 2000 to 2004 management had used the room for storage, but this aggrieved the Committee who supported its return to a transit room.

100. In regard to the potential shared use of the space, current airport security prevents the managers or the Committee from allowing other persons to have access to an area which is used to store guest luggage. However, if an employee needs a shower they can ask the managers for a key if guests are not using the facility.

4. Copies of the current Letting Agreement and Caretaking Agreement are also provided.[9]

[27] The Committee also forwarded a response from the resort managers who advised:

1. During their purchase it was made clear to them by the seller that the room was used exclusively as a day room/transit room for guests. Inspections prior to purchase did not indicate that the room was being used for any other purpose. It was not furnished or being used as a staff room when they inspected in December 2008 or in January 2009.
2. This is the only area available for the storage of guest luggage within the entire resort.

100. The room is currently being used regularly for luggage storage. No further resources have been committed to refurbishing the area until this dispute is finalised. If exclusive use of the area is approved by the end of September 2011 a schedule of works will enable it to be fully operational for guests by mid November 2011.

4. The location, size and design of the room limit major structural changes. The security of guest luggage is a priority. Open access even with restricted key access would compromise this. The room is adjacent to an apartment and allowing staff to use the room uncontrolled at night would not be desirable for the quiet enjoyment of guests.

[28] The applicant provided the following comments on the information above, including:

1. The contracts for the sale of lots showed different plans. The plans attached to the unit lot contracts showed the room as a transit room, but the plan in the retail lot contracts show the area as a staff room. The Committee and secretary were aware of this.
2. No documentary evidence has been provided of the use of the room from 2000-2009.

100. It is unclear why the room is not functioning as a transit room. The resort managers have been there for 2.5 years. If a transit room was important to their business or necessary to their contractual obligations, why is there no priority or urgency in having the room fully functioning? The last time the tenants were able to access the room in 2009 it was in very good usable condition. In July 2010 the secretary said the room was expected to be fully functioning within a few months. In October 2010 the Committee noted the transit room was being used on a regular basis. In November 2010 the resort manager and secretary say the room is closed and in need of refurbishment. Significant tiling work was undertaken in March 2010. In August 2011 the resort manager says the room is being used for luggage storage only

4. The Body Corporate’s response fails to explain the purpose for which the occupation authority was granted and is necessary under the contractual obligations.
5. The responses state that the room cannot be shared because of the security of luggage. However there is a porter’s locker within the staff room. The version of the plan that has a transit room marked has a luggage storage room marked within it. The marketing brochure also refers to a transit lounge ‘with secure storage’.

Analysis

[29] The key issue in this application is whether the decision of the Body Corporate at the 2011 EGM to grant an occupation authority over the disputed room was valid. Specifically the question is whether the Body Corporate acted within its legislative authority to make this grant. A further issue arises regarding the cleaning of the area.

Applicable test for occupation authorities

[30] The applicant has not challenged the procedural validity of the EGM, although he does query the fairness of the meeting. Rather he claims the occupation authority does not comply with section 134 of the Accommodation Module. I will consider then how that section applies.
[31] A body corporate does not have an unrestricted capacity to give an area of common property to a caretaking service contractor for their sole use. A body corporate can resolve, by resolution without dissent, to give exclusive use rights to common property to an owner. But this option is excluded for a letting agent or service contractor, who can only occupy common property for the purpose of their agreements under an occupation authority[10].
[32] Section 134 of the Accommodation Module provides as follows in regard to the occupation of common property by a letting agent or service contractor[11]:

134 Occupation of common property by service contractor or letting agent [SM, s 136]

(1) The body corporate may, by ordinary resolution, give a person (a property occupier) who is a service contractor or letting agent an authority (an occupation authority) to occupy a particular part of the common property for particular purposes necessary to enable—

(a) if the property occupier is a service contractor—the property occupier to perform obligations under the property occupier’s engagement as a service contractor; or

(b) if the property occupier is a letting agent—the property occupier to operate as a letting agent.

Example—

The body corporate might authorise a letting agent to occupy a particular part of the common property as a reception area, or a caretaker to occupy a shed on the common property for storage of tools and garden implements.

(2) The body corporate may include in the terms of the engagement of a person (also a property occupier) as a service contractor, authority (also an occupation authority) to occupy a particular part of the common property for particular purposes necessary to enable the property occupier to perform obligations under the property occupier’s engagement as a service contractor.

(3) The body corporate may include in the terms of the authorisation of a person (also a property occupier) as a letting agent, authority (also an occupation authority) to occupy a particular part of the common property for particular purposes necessary to enable the property occupier to operate as a letting agent.

(4) The body corporate may give an occupation authority only if the occupation of the part of the common property under the occupation authority would not interfere to an unreasonable extent with the use and enjoyment of a lot or the common property by an occupier of a lot.

(5) An occupation authority—

(a) may include conditions with which the property occupier must comply; and

(b) if given under subsection (1)—is taken to be a term of—

(i) for a property occupier who is a service contractor—the property occupier’s engagement as a service contractor; or

(ii) for a property occupier who is a letting agent—the property occupier’s authorisation as a letting agent; and

(c) may give the property occupier a right to exclusive occupation of the part of the common property the occupation authority relates to; and

(d) must not be amended or terminated without the agreement of the property occupier—

(i) for a property occupier who is a service contractor—during the term of the engagement of the property occupier as a service contractor; or

(ii) for a property occupier who is a letting agent—during the term of the authorisation of the property occupier as a letting agent; and

(e) terminates immediately on—

(i) for a property occupier who is a service contractor—the engagement of the property occupier as a service contractor coming to an end or being terminated; or

(ii) for a property occupier who is a letting agent—the authorisation of the property occupier as a letting agent coming to an end or being terminated.

(6) Despite subsection (5)(c), a right a property occupier may have to exclusive occupation of a part of the common property is subject to the body corporate’s right to authorise access to the part by others if the extent of the access does not unreasonably interfere with the occupation of the part by the property occupier.

(7) A service contractor or letting agent may acquire rights to occupy part of the common property for the purpose of the service contractor’s engagement or letting agent’s authorisation, only under this section.

[33] The test applying to the grant of an occupation authority was set by the District Court in Surace v Commisso[12]. In that matter His Honour Judge Rackeman considered the appeal of the decision of a specialist adjudicator regarding whether a caretaking service contractor had valid occupation rights to a common property kitchen and laundry. His Honour found [paragraph 11] that the determination of whether an occupation authority had been validly granted to a person required the following questions to be answered:

• (1) Did the body corporate engage the person as a service contractor?
• (2) Did the body corporate authorise the person as a letting agent?
• (3) If yes to 1 or 2, did the terms of the engagement or authorisation purport to give an occupation authority for a particular part of the common property?
• (4) If yes to 3, was the occupation authority for particular purposes necessary to enable the occupier to:
  • (a) perform the obligations under the engagement of the occupier as a service contractor? or
  • (b) enable the occupier to operate as a letting agent?

(5) If yes to 4, would the occupation under the occupation authority interfere, to an unreasonable extent, with the use and enjoyment of a lot or the common property by an occupier of a lot?
[34] His Honour further found [paragraph 13] that the following subsidiary questions needed to be considered when answering question 4 above:

• (1) What are the obligations of the service contractor under the terms of the engagement?
• (2) What is the business of a letting agent?
• (3) What are the purposes for which the occupation authority has been granted?
• (4) Are those purposes necessary to enable the service provider to perform its obligations or to enable the letting agent to conduct the business of a letting agent?

[35] The decision in that matter was that the adjudicator had erred in applying the law in originally determining[13] that there was a valid occupation authority. The matter was remitted back to the adjudicator to reconsider. In his subsequent order[14] the adjudicator invalidated the occupation authority on the basis that exclusive occupation was not necessary to perform the duties and that it would cause an unreasonable interference.
[36] In the current case, the answers to Judge Rackeman’s questions (1) and (2) are yes, with the resort managers holding the management rights to Azure Waters pursuant to the caretaking and letting agreements dated 24 October 2005. Pursuant to the deed of variation, the caretaking and letting agreements purport to authorise exclusive occupation over the disputed room marked as 7I on the plan attached to the deed. Accordingly the answer to Judge Rackeman’s question (3) is also yes. Therefore I will consider the answers to Judge Rackeman’s questions (4) and 5).

Is the occupation authority necessary?

[37] In order to determine the answer to Judge Rackeman’s question (4) – being whether the occupation authority for particular purposes was necessary – I will consider His Honour’s four subsidiary questions.
[38] In considering these questions I note that an occupation authority does not have to involve exclusive occupation of the common property in question, although section 134(5)(c) of the Accommodation Module permits an occupation authority to give exclusive occupation. Accordingly, I will consider the need for exclusivity in considering the necessity of the occupation authority.

Obligations of the service contractor

[39] The duties of the service contractor are provided for in section 4 of the caretaking agreement supplied by the Body Corporate, and specifically detailed in 32 items in Schedule 1. I note that the deed of variation does not purport to amend the duties.
[40] The duties includes activities such as cleaning, maintenance, gardening, waste removal, supervision of contractors undertaking work, supervision of common property, keeping master keys, keeping the asset register.

Business of the letting agent

[41] The current letting agent agreement supplied by the Body Corporate says the ‘letting agent business’ has the meaning given to it by the Act. The agreement further defines the ‘letting service’ as meaning the letting agent business which may include any or all of a list of services. Section 4 of the agreement sets out letting agent’s duties. These duties include carrying on the letting service, providing a reception, supervising tenants, signage and cleaning services. Again, the deed of variation does not purport to amend this.
[42] Section 16(2) of the Act defines a ‘letting agent business’ as “...the business of acting as the agent of owners of lots included in the scheme who choose to use the person’s services for securing, negotiating or enforcing (including collecting rents or tariffs for) leases or other occupancies of lots included in the scheme.”

Purposes for which the occupation authority has been granted

[43] The motion which purported to approve the deed of variation to grant the occupation authority does not state the purpose of the occupation authority. The explanatory note to the EGM motion states the manager was seeking the occupation authority in relation to the room “...to enable them to use it for purposes associated with the Caretaking Agreement (storage) and the Letting Agreement (a day room/in transit facility) for guests arriving early or leaving late”.
[44] The deed of variation inserts clause 20 into the caretaking agreement to give “the exclusive right to occupy” the room “for purposes incidental to the provision of the Caretaker’s Duties”. The deed also inserts clause 15 into the letting agreement to give “the exclusive right to occupy” the room “for purposes incidental to the conduct of the Letting Service.”
[45] Notwithstanding the lack of specificity in the original motion and deed, it would appear from the material presented that the room be used for two purposes. The first is the secure storage of luggage belonging to resort guests. The second is transit facilities for use of resort guests.

Necessity of those purposes

[46] None of the duties in the caretaking agreement appear to have any relation to the provision of any direct services to or facilities for resort guests, including the guest luggage storage or transit facilities. I do not consider that luggage storage and transit facilities can be legitimately viewed as ‘incidental’ to the caretaking duties. They are quite unrelated to the duties of the service contractor, and clearly not necessary under the caretaking agreement.
[47] Although storing guest luggage and providing transit facilities are not specifically referred to in the letting agreement, they would appear to be within the ambit of services that could be delivered by a letting agent in operating their business. However, the fact that the services can be provided and are desirable, does not mean that they are necessary. In Surace v Commisso[15], Judge Rackeman indicates that the fact that activities are reasonably incidental to the duties under the agreement does not answer the question of whether the occupation authority was necessary.
[48] It is arguable that the temporary storage of guest luggage before check-in and after check-out is required for the letting agent to conduct their business. It may well be a function that is commonly expected by guests in a resort of the nature of Azure Waters. It certainly appears that luggage storage has been undertaken by all of the past managers at the resort.
[49] Conversely, while it may well be desirable, it is difficult to argue the necessity of a transit facility to the letting business. It is not a service automatically expected in resorts. More importantly, this service does not appear to have been provided for most of the duration of the scheme. It is not clear that the current managers have provided a transit facility at all during their tenure, and if they have it has not been available for an extended period. Although it was never suggested that the resort managers would not at least have shared use of the disputed room, they have chosen not to proceed with the works that they say would be required to enable the room to be used as a transit room. Ultimately, neither the Body Corporate nor the resort managers have suggested that the current or previous resort managers have not been able to conduct their business as letting agents in the continuing absence of transit facilities for resort guests.

Necessity of the occupation authority for the purposes

[50] Returning to Judge Rackeman’s original question (4), there is clearly no basis for an occupation authority to be granted to the service contractor for the purpose of the caretaking duties. There are no obligations in the caretaking duties which would require the service contractor to have exclusive occupation of the disputed room. While the manager may have an obligations regarding cleaning and maintenance of the room, they would not require exclusivity.
[51] The purpose of guest luggage storage may well be necessary for the resort managers to operate as a letting agent. However I am not satisfied that sole occupancy of the disputed room is necessary for this purpose.
[52] The resort managers already have the exclusive use of an area adjacent to the disputed room which was identified on one plan as being a luggage room. It is unclear why this room cannot be used to store luggage. The scheme comprises only 27 lots and not all of these are in the letting pool. It is not evident that the letting business would generate a significant volume of luggage to be stored at any given time. Even if there was insufficient space in other areas of the common property (particularly the room adjacent to the disputed room) to store guest luggage, I am not satisfied that sole access to the transit room is required.
[53] I accept there may be a genuine concern regarding luggage security, but the evidence presented does not convince me that exclusive occupancy is required to provide that level of security. It appears previous resort managers have stored luggage when the room may also have been being accessed by employers. It should not be difficult to install lockable storage into the room to accommodate luggage if required. If the room is to be accessible by guests using the transit facilities, any luggage for other guests would not be secure from those guests unless it were separately locked. Therefore I do not consider that the use of the room by commercial tenants poses any greater risk to security of luggage than the use of the room by resort guests or even the resort managers’ staff.
[54] In regard to the transit room facility, even if the facility was necessary for the purpose of the letting agent business, which I do not accept, I am not satisfied that exclusive occupation of the room has been demonstrated as necessary.
[55] The Body Corporate and the resort managers refer to the small number of employees who would use the room and that any previous use was limited. With respect this does not advance their case. If there are so few staff that could use the room, and given that their use is likely to be transitory, it is difficult to see why such intermittent and low level usage would interfere with guest usage. There are a relatively small number of lots in the letting pool, and no evidence has been presented of the frequency of guests requiring a transit facility. However it would seem to me to be unlikely that in a scheme this size that there would be a need for daily use by guests. No evidence has been presented that the transitory use of the room by a small number of staff would prevent the infrequent use of the room by an occasional guest.
[56] I find nothing to substantiate the concerns regarding the impact on the neighbouring apartment, or other users of the scheme, from staff using the disputed room. There is no evidence to suggest that staff of the commercial tenants will cause any greater level of disruption to neighbouring apartments than any guest using the day facility or even the resident manager and their staff. Moreover, if there was any noise or nuisance, that could be pursued directly if and when it arose and is not a basis to prevent access entirely.
[57] I do not consider then it has been demonstrated that the resort managers would not be able to operate their letting business unless they had exclusive occupation of the disputed room.

Would the occupation authority interfere with others?

[58] Although the applicant has no objection to the use of the disputed room for luggage storage and a transit facility, he wants other occupiers to be able to use the room also. The applicant argues that exclusive occupation of the room interferes with the commercial tenants’ use and enjoyment of their lots and common property. In Surace v Commisso[16], Judge Rackeman noted that what constitutes interference to an unreasonable extent under section 134(4) of the Accommodation Module is a question of fact.
[59] There is much disagreement over the extent to which staff of the commercial lots have used the disputed room in the past, and the extent to which they would now need to use the room. Although it is difficult to determine the exact level of usage, I am satisfied on the evidence that it is probable that staff from the commercial lots have used the room at least intermittently in the past. Moreover, where such facilities have existed on common property, I consider it reasonable for the commercial occupiers to want to continue to provide their staff with a quiet space to eat lunch, change into uniforms, have a shower, and so on. It is entirely legitimate for a retail operation to seek to provide these facilities to their staff. Although there may be alternative toilet facilities available, it is not apparent that there are viable alternatives for showering, changing and so on.
[60] On balance I am satisfied that the exclusive occupation of the disputed room does interfere unreasonably with the use of common property by the occupier’s of the commercial lots. As such the occupation authority is contrary to section 134(4) of the Accommodation Module.
[61] Had the occupation authority not been exclusive, but provided for shared usage, it would not have resulted in any unreasonable interference. However granting a non-exclusive occupation authority would not rectify the other defects with the occupation authority noted above.

Cleaning obligations

[62] The Body Corporate has an obligation to maintain common property in good condition[17]. This includes a requirement that the common property, including the disputed room, must be kept reasonably clean such that it is fit for its purpose.
[63] Providing that it acts reasonably[18] in fulfilling its maintenance obligations, I consider that it is a matter for the Body Corporate to determine how its common property is cleaned and maintained, and by whom. Although claims are made that a separate toilet has not been kept clean, albeit with limited evidence, the applicant has not presented any evidence that the disputed amenities room has not been kept clean. Accordingly there is no basis at this time to impose obligations about how the Body Corporate keeps the room clean.
[64] If in future the applicants have genuine concerns about the cleanliness of the amenities room, they should raise those concerns with the Body Corporate Committee. Potentially they could propose the engagement of contract cleaners at that time. If the concerns are not addressed within a reasonable time, they could then pursue a further application in this office.

Other issues

[65] Although not matters relevant to the determination of the application, I will make some brief observations on other issues that have arisen in this dispute for the information of parties.
[66] The resort managers believed they had exclusive use of the room. It is unclear how this belief arose, given no exclusive use was shown in the CMS. Any inadequate or misleading information given to the resort managers is a matter between them, their legal advisors and the previous managers. The Body Corporate had no obligation to rectify the situation.
[67] Notwithstanding any original misunderstanding, it appears that both the Body Corporate and the resort managers were aware that there was no exclusive use by the end of 2009. Therefore I am at a loss to understand why the managers continued to exclude other occupiers from the room before the purported occupation authority was granted in April 2011, and why the Committee permitted this. No adequate justification has been given for denying occupiers the use of unallocated common property. As such, this conduct was inappropriate.
[68] Finally, I note that the applicant says he was unable to write to owners to present an alternative view before the EGM because he was denied a copy of the mailing list. I do not know whether the applicant made a proper request for the roll. However, section 205 of the Act provides that an interested person may inspect or receive request Body Corporate records within seven days of making a written request and paying the prescribed fee[19]. I consider the occupier of a lot would be an interested person and so there would be no reasonable basis for the Body Corporate to refuse access to the records.

Conclusion

[69] It is clear that there is no basis for an occupation authority over the disputed room to be granted to the service contractor for the purpose of undertaking the caretaking duties. As such, the occupation authority granted to the resort managers as service contractors is void.
[70] The purpose of providing guest luggage storage may well be necessary for the resort managers to operate their letting service business. However I am not satisfied that the exclusive occupation of the disputed room is necessary to provide guest luggage storage. As such, the occupation authority granted to the resort managers as letting agents for the purpose of luggage storage is void to the extent that it gives a right to exclusive occupation of the room.
[71] Although perhaps desirable, the purpose of providing a guest transit facility has not been demonstrated to be necessary for the resort managers to operate their letting service business. In addition, insufficient evidence has been presented that the exclusive occupation of the room is necessary to provide a guest transit facility. As such, the occupation authority granted to the resort managers as letting agents for the purpose of a guest transit facility is void.
[72] I intend to order that the EGM motion purporting to authorise the deed of variation granting the occupation authority was at all times void.
[73] I will further order that the Body Corporate must ensure that access to the room is given to those occupiers who require use of the room. The Body Corporate may impose guidelines on all users of the room to manage any competing uses of the room. However, the Body Corporate must act reasonably and equitably in regard to any such guidelines, noting that any failure to act reasonably[20] would be subject to further challenge.
[74] I will dismiss the order sought in regard to the cleaning of the room on the basis that I do not consider it to be substantiated at this time.
[75] It is unfortunate that, perhaps because of inconsistent information provided by the developer, different expectations about the purpose and use of the disputed room have arisen and caused conflict. However I consider that, with a better appreciation of the competing rights and interests, the room can readily accommodate the needs of both the resident managers and the commercial tenants. Providing there are some reasonable guidelines about appropriate conduct in the room, I see no reason why the needs of the employees of the commercial tenants could not coexist harmoniously with the use of the space as a transit room and luggage storage area.

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[1] See sections 227, 228, 276 and Schedule 5 of the Act
[2] Section 276 of the Act
[3] Section 284(1) of the Act
[4] Application reference 0946-2010
[5] Section 243 of the Act
[6] See sections 246 and 244 of the Act respectively
[7] Section 248 of the Act
[8] The investigative powers of an adjudicator are set out in section 271 of the Act
[9] The Secretary provided the 2000 agreements but the current 2005 agreements have since been obtained.
[10] Section 134(7) of the Accommodation Module

[11] It is noted that a person who is engaged as the service contractor for the scheme is also a letting agent, is referred to in the legislation (Schedule 6 Dictionary in the Act) as a ‘caretaking service contractor’.
[12] Surace v Rita Commisso Enterprises Pty Ltd & Anor [2009] QDC 198
[13] Acacia Lodge Hostel [2007] QBCCMCmr 360 (13 June 2007)
[14] Acacia Lodge Hostel [2010] QBCCMCmr 590 (24 December 2010)
[15] At paragraph 34
[16] At paragraph 40
[17] Section 157 of the Accommodation Module
[18] Section 94(2) of the Act
[19] The prescribed fees are set out in section 203 of the Accommodation Module
[20] Section 94(2) and 100(5) of the Act