La Solana [2011] QBCCMCmr 48 (14 February 2011)

Number of Scheme:	456
Name of Scheme:	La Solana
Address of Scheme:	15 Pacific Drive, Blacks Beach, Mackay Qld 4740

TAKE NOTICE that pursuant to an application made under the abovementioned Act by Carole Henry, the owner of Lots 5 and 6

I hereby order that the resolution passed at the extraordinary general meeting held on 17 September 2010 at item 2 under ‘General Discussion’ is void.

I further order that in all other respects the application made by Carole Henry, the owner of Lots 5 and 6 is dismissed.

The application
This application dated 18 October 2010 is by Carole Henry, the owner of Lots 5 and 6 (applicant) against the body corporate seeking:

The applicant also sought an interim order that the car parks be used in accordance with their normal usage and numbering until the application is determined. On 29 October 2010, I made an interim order that pending final determination of the application, the body corporate must not proceed with or implement the resolution purportedly passed under item 2 of “General Discussion” at the EGM or the resolution of the committee by voting outside a committee meeting dated 11 October 2010 about car parks and allocation of spaces.

Subsequently, the commissioner invited submissions from all lot owners (excluding the applicant) regarding the application under section 243 of the Body Corporate and Community Management Act 1997 (Act). Submissions were made by 4 lot owners and the committee. The owner of Lot 2 in the adjoining scheme (La Solana Villas) made an uninvited submission. The applicant replied to submissions.

The commissioner has made a dispute resolution recommendation under section 248 of the Act referring the application to departmental adjudication.

Jurisdiction
An adjudicator may make an order that is just and equitable in the circumstances to resolve a dispute about a claimed or anticipated contravention of the Act or the community management statement; or the exercise of rights or powers, or the performance of duties, under the Act or the community management statement (s 276(1), Act).

Decision
The scheme
It is apparent from the community management statement for the scheme (recorded by the registrar of titles on 15 July 2000) and Building Units Plan 71179 (the plan of subdivision for the scheme) that there are six lots included in the scheme. The plan indicates the scheme is located on the corner of Pitt Street and Pacific Drive, Blacks Beach. To the east of the scheme and further along Pitt Street is La Solana Villas Building Units Plan 71424.

Car parking on scheme land
There is no evidence on BUP 71179 that a garage forms part of any lot included in the scheme. In this circumstance, ordinarily an owner or occupier could park a vehicle on common property for the scheme if permitted by the body corporate pursuant to a by-law (including an exclusive use by-law) or if that person had a right because of, for example, a lease agreement.

By-laws are stated in the scheme’s community management statement (s 66(1)(e), Act). The community management statement for the scheme indicates the by-laws are those having effect as at 13 July 2000. There is no evidence of a by-law, including an exclusive use by-law, being recorded on the plan by the registrar of titles before the commencement of the Act (13 July 1997). It is not claimed an owner or occupier has a specific right pursuant to a lease or other agreement with the body corporate.

Consequently, an owner or occupier requires body corporate consent to park or stand a motor or other vehicle on common property (By-law 2 of the schedule 3 by-laws of the Building Units and Group Titles Act 1980 which applied before the Act commenced in 1997). The committee could make a decision to allow an owner or occupier to park or stand a vehicle on common property (s 100(1) and (2), Act).

The applicant refers to business at the annual general meeting dated 15 January 2006 and has provided a copy of the minutes of the committee meeting dated 13 August 2010. There is nothing in the records provided of either meeting indicating the body corporate had made a decision pursuant to By-law 2.

The applicant also provided a copy of the minutes of the committee meeting dated 17 March 2009 which minute that the carport numbering was changed in late 2007 and that the committee resolved to return the numbering back to the original allocation to Lots 1 to 4 with no car space to be allocated to Lots 5 and 6. There are handwritten notes on the minutes disputing the decision. There is no evidence indicating that the committee decision was disputed or that the committee sought to enforce the decision and By-law 2 in accordance with the legislation before the EGM (s 182 to 188, Act).

The EGM
The material suggests the applicant requisitioned the EGM. Motion 3 proposed by the applicant:

“That the body corporate approve exclusive use to carparks in accordance with their use. This will be recorded in a new CMS community management statement and lodged at the Titles Office.

The minutes of the meeting indicate the motion was not passed by resolution without dissent (2 yes votes and 3 no votes).

The minutes also indicate under item 2 of ‘General Discussion’ that the committee could approve parking on common property and that:

The applicant seeks to have Motion 3 deemed carried and to overturn the decision made at item 2.

It is noted the abovementioned unit numbers do not, in most cases, correspond with lot numbers. Given submissions, it is apparent Lot 1 is recognised as Unit 5, Lot 2 as Unit 4, Lot 3 as Unit 3, Lot 4 as Unit 2, Lot 5 as the manager/caretaker’s residence and Lot 6 as Unit 1.

Item 2 ‘General Discussion’
The applicant submits the decision made at item 2 conflicted with Motion 3 and was carried without consultation with owners. The minutes indicate Lots 1 to 3 were represented at the EGM.

Notice of a general meeting must be given to the owner of each lot (s 70(1), Body Corporate and Community Management (Standard Module) Regulation 2008 (Standard Module)). The notice must contain an agenda which includes the substance of motions submitted and be accompanied by a voting paper for motions to be decided at the meeting (s 70(3)(c), 71 and 76, Standard Module).

“There is question about this decision. There is nothing to suggest this item of business was stated in the agenda of the meeting or listed in the voting paper accompanying the notice of the meeting. A general meeting may pass a resolution on a motion only if the motion is included on the agenda and stated in the voting paper (s 87(5)(a), Standard Module).”

There is nothing in subsequent submissions to the commissioner which casts doubt on this statement. The body corporate could not make a decision on item 2 because it was not included on the agenda and was not stated in the voting paper for the EGM. For this reason, I have made an order in the terms sought.

Motion 3
In submitting Motion 3, the applicant proposed common property exclusive use allocations for car parking purposes. The motion indicates the allocations were based on the applicant’s view of where owners and/or occupiers have been parking a vehicle/s for some time.

The applicant submits when she purchased the management rights in 2006, the established parking arrangement was 4 carports (beneath Lot 6 and numbered 1 to 4 starting from the Pitt Street side of the building), 2 spaces adjacent to the western side of the Level A part of Lot 5 and 1 space adjacent to the northern side of the Level A part of Lot 1. The applicant states the numbered carports reflected unit numbers (by her reckoning, Lots 2 to 4 and 6 had use of the 4 carports). She states the previous manager advised this allocation had been in place for the preceding eight years. The applicant argues this arrangement has worked successfully for many years.

The committee states the original building consisted of 4 units that were not strata titled and there was undercover parking for each unit. It says the then owner later built a manager’s residence (which included its own undercover parking) and a room above the original undercover parking before the building units plan was registered. The committee submits Lots 1 to 4 had use of the 4 undercover car parks, Lot 5 its own undercover car park, and Lot 6 parked on or beside Lot 5 (until Lot 5’s car park became a bedsit). The committee states there were 6 lots, 7 units, 5 undercover parking spaces and 2 parking spaces beside Lot 5. In support of its submissions, the committee provided a statutory declaration dated 24 October 2010 by Alice Barbour, a person the committee says was the body corporate manager from the late 1970’s to about 2006. The committee outlines some recent problems relating to parking vehicles on scheme land.

Some owners made submissions about information given to them about parking when they purchased their lots and about problems relating to parking vehicles on scheme land. The owner of Lot 4 states his lot always had the car park numbered 2 and for the past 9 years the car parking situation submitted by the applicant has worked.

There clearly are divergent views about past and current arrangements with respect to car parking. It would seem this conflict has arisen because there have not been any proper decisions made by the body corporate about this issue. In contrast, it is noted the adjoining La Solana Villas body corporate, in 1993, made an exclusive use by-law allocating parts of common property to each of the five lots for car parking. In proposing Motion 3, the applicant sought to introduce an exclusive use by-law for car parking.

An exclusive use by-law attaches to a lot and gives the occupier of the lot exclusive use to the rights and enjoyment of, or other special rights about, common property (s 170(1), Act). The common property to which an exclusive use by-law applies must be either specifically identified in the by-law, or subject to an authorised or agreed allocation (s 171(1), Act). An exclusive use by-law that specifically identifies the subject common property is decided by resolution without dissent at a general meeting of a body corporate (s 62(1) to (3) and 171(2)(a), Act).

Given the material presented, it is apparent the applicant sought to have a by-law made which would specifically identify the subject common property. The motion had to be decided by resolution without dissent. It is clear the motion was not passed.

As the applicant has not argued the decision was contrary to a procedural requirement of the legislation, the question is whether the opposition to the motion was unreasonable. A body corporate’s functions include administering common property (s 94(1), Act). A body corporate must act reasonably in anything it does under section 94(1), including making a decision (s 94(2), Act). Section 276(3) of the Act provides that without limiting section 276(1) and (2), an adjudicator may make an order mentioned in schedule 5 of the Act. Section 10 of the schedule contemplates an adjudicator making an order to give effect to a motion requiring a resolution without dissent that was not passed because of “opposition that in the circumstances is unreasonable”.

In determining whether the body corporate acted reasonably in deciding Motion 3 it is appropriate to consider if the decision is objectively reasonable: Greiner v Independent Commission Against Corruption (1992) 28 NSWLR 125. The objective test requires a balancing of factors in all the circumstances according to the ordinary meaning of the term ‘reasonable’: Secretary, Department of Foreign Affairs and Trade v Styles [1989] FCA 342; (1989) 88 ALR 621.

The applicant argues the allocations she proposed reflect arrangements which have existed since the building was constructed in the 1970’s. These allocations are questioned by the committee. It is not possible to determine the merits of either argument on the submitted material. In my view, it is not indisputable that demonstrated use of common property by a particular owner or occupier is justification for that person to have a right of exclusive use of common property.

In proposing the motion, the applicant not only sought allocations for exclusive use of common property for the lot/s she owns, she also proposed allocations for each other lot included in the scheme. With the possible exception of the owner of Lot 4, the applicant did this without the agreement of each owner. The applicant took the risk those owners would not consent to the proposal, particularly with respect to the part of common property the applicant considered that owner should have exclusive use of.

Where it is proposed the by-law specifically identify the allocated common property, the by-law may attach to a lot only if the lot owner agrees; either in writing or by voting (s 171(2)(a), Act). Clearly, a number of owners disagree with the proposed allocations. Relevantly, these owners do not want exclusive use of the parts of common property mentioned in the motion and disagree with the applicant about the way common property has been historically used for car parking purposes. I do not believe there is anything which suggests it was unreasonable in the circumstances for an owner to oppose Motion 3 for these reasons. There is nothing in the submitted material that convinces me the views expressed by the applicant and the owner of Lot 4 should prevail over those made by other lot owners.

Further, the motion proposed the owner of Lot 5 be allocated exclusive use of a part of common property of the adjoining scheme, La Solana Villas. The committee made submissions to this effect before the interim order was made and later to the commissioner. It was a reason for opposing the motion. In her reply to submissions, the applicant stated approval should be sought from the La Solana Villas body corporate to allow parking on its common property. Even though both schemes may be treated as one resort, they are two distinct schemes each with their own lots and common property. Each body corporate has functions, powers and duties about the common property for each scheme. Neither body corporate can make a decision about the use and enjoyment of common property in the adjoining scheme in the way proposed in Motion 3.

In my view, the applicant has not established that the circumstances justify a finding that the opposition to Motion 3 was unreasonable. The outcome sought that Motion 3 be deemed carried is dismissed.

Removal of sticky numbers
It is apparent that, on 11 October 2010, the committee passed a resolution in terms similar to item 2 under ‘General Discussion’ at the EGM. This decision would seem to replace the earlier decision made in March 2009.

In making the interim order, I prevented the body corporate from acting on the October 2010 committee resolution. I made this decision principally to give effect to the interim order sought by the applicant. Significantly, although she made submissions opposing it, the applicant has not sought an outcome with respect to the resolution. To the extent it may be arguable that an adjudicator could make an ancillary order, it would seem any order about this resolution would not resolve the parking issues. Conceivably, the body corporate could then rely on the earlier March 2009 committee resolution. For these reasons, I do not consider it is appropriate to make a final order about the resolution notwithstanding that the committee may have placed the numbers on common property as a consequence of the resolution.

With respect to the outcome sought, I do not believe removal of numbers is of any use or benefit for the purpose of parking allocations. While the applicant may doubt the correctness or the reasonableness the abovementioned body corporate decisions, I do not see there is any justification for an order in the terms sought. For this reason, the outcome sought is dismissed.

Management of the car parking issue
There are issues to be resolved about the way the body corporate manages the parking of vehicles on common property.

The abovementioned committee resolutions are made pursuant to By-law 2, are temporary in nature and could be changed by a subsequent committee decision which may occur if the membership of the committee changes. Neither resolution fixes the parking issues in the long term.

Further, there are questions as to whether the decisions are reasonable and whether the body corporate is administering common property for the benefit of lot owners (s 94(1) and 100(5), Act). The March 2009 resolution does not give any consideration to the owner or occupier of Lots 5 and 6 parking on common property. The October 2010 resolution would seem to have been made without consulting each affected owner and occupier. There is no evidence each person sought permission to park in the space determined by the committee or was agreeable to parking in that space. There is a question about the reasonableness of the resolution when it seeks to impose a view about parking arrangements over another and the members making the decision have an interest in it given their lots were authorised to park on the most contentious part of common property (see for example, s 53, Standard Module).

It would seem there is a possibility either resolution will cause further disputes. If the committee intends to rely on either resolution, it will need to enforce By-law 2 in accordance with the Act if an owner or occupier parks a vehicle on common property without body corporate consent (see s 182 to 188, Act). Ultimately, the body corporate may have to make a dispute resolution application, and in doing so, it will have to rely on a body corporate decision consenting to an owner or occupier parking on common property.

While the parking issue needs to be resolved, I do not necessarily agree either view being expressed in this application about parking allocations should prevail. The impasse cannot be resolved in the determination of this application. In my view, consideration should be given to formulating an arrangement which is more long term and certain. This should be the focus of the body corporate. It needs to take appropriate steps to consult and negotiate an outcome to this problem. While historical factors such as the original use of common property or more recent use may have some influence, it is not necessarily, of itself, the decisive factor in a matter such as this.

There would seem to be ample common property available to the body corporate allocate for parking purposes for each lot. A starting point to resolving parking issues may be making sure each lot owner or occupier has access to parking accommodation of a similar nature. This may mean making decisions so there are covered car ports on common property for parking a vehicle for each of the six lots.

It is clear there are 4 undercover spaces at the front of the building for parking vehicles. It may be argued the body corporate acting reasonably should, for example, carry out work to ensure the owner or occupier of each lot has access to a similar type of covered parking space on common property. In this regard, the body corporate may decide to construct 2 carports on common property (s 163, Standard Module), and negotiate with owners about allocating each parking space as exclusive use. Alternatively, an owner may wish to construct a carport on common property (s 164, Standard Module). However, I would think there would need to be good reason for compelling an owner to meet this expense when other owners have the benefit of a covered car space simply because of the vicinity of their lot to the space.

If an owner would like use of an additional part of common property for parking more than 1 vehicle, that owner may ask the body corporate to authorise any sought after improvement to common property or for exclusive use of part of common property for this purpose. In this circumstance or generally, the body corporate may decide it is appropriate to include conditions in a by-law, including conditions about payments to be made by the owner to the body corporate (s 173, Act and s 173, Standard Module). The body corporate may also need to consider responsibility for maintenance of the common property the subject of the by-law (s 173(2), Standard Module).

The above information should not be viewed as anything more than suggestions about alternatives that are available to the body corporate to progress the parking issue. It may be able to be resolved by the owners as the members of the body corporate. However, given its significance, it may be beneficial if the body corporate or owners obtain appropriate advice, including advice from a solicitor, a surveyor or the relevant local authority before proceeding or making a decision/s.

Queensland Body Corporate and Community Management Commissioner - Adjudicators Orders

La Solana [2011] QBCCMCmr 48 (14 February 2011)