Pinetree Pocket [2011] QBCCMCmr 499 (10 November 2011)

Last Updated: 9 December 2011

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

CITATION:	Pinetree Pocket [2011] QBCCMCmr 499
PARTIES:	Mr Johannes Matto (applicant) The Body Corporate (respondent) All owners (affected persons)
SCHEME:	Pinetree Pocket CTS 19095
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 (Standard Module) Regulation 2008 (Standard Module).
APPLICATION NO:	0740-2011
DECISION DATE:	10 th November 2011
DECISION OF:	R Miskinis, Adjudicator
CATCHWORDS:	LEASING OF COMMON PROPERTY– whether body corporate is able to lease a common property area to a lot owner - paragraph 167(b) Standard Module.

ORDERS MADE:

I hereby order that the application for the following orders: The removal of the illegal gate from body corporate property and a receipt to prove who paid for the fence and gate. Overturn motion 9 of the AGM held on 19 July 2011 Is dismissed.

REASONS FOR DECISION
Introduction

[1] This application was made on 9 August 2011 under the dispute resolution provisions of the Act, seeking the following outcomes:

The removal of the illegal gate from body corporate property and a receipt to prove who paid for the fence and gate.

Overturn motion 9 of the AGM held on 19 July 2011.

[2] This dispute concerns a resolution by the body corporate to grant to the owner of lot 8 a lease of the common property area between lot 8 and lot 9, for a period of 3 years or less and “that the leasing fee be the maintenance on the property”.
[3] I am satisfied that this is a matter which falls within the legislative dispute resolution provisions.[1] It is a dispute between a lot owner and the body corporate within the context of a community titles scheme about a claimed or anticipated contravention of the Act or community management statement.[2] 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 to which the application relates.

Overview of dispute

[4] Pinetree Pocket is a residential building consisting of 34 units on a Group Title plan (now known as a Standard Format Plan).
[5] As mentioned above the applicants are seeking to invalidate the resolution on motion 9, considered at the last AGM for the scheme whereby it was resolved to grant to the owner of lot 8 a lease of a common property area.
[6] This was a lease of the common property area between lot 8 and lot 9 for a period of 3 years or less and subject to certain conditions including a condition that the owner of lot 8 would maintain the area in lieu of a lease fee.
[7] The subject area is a narrow strip of common, property approximately 2 metres wide between lots 8 and 9. This area is referred to as an “ease way” and runs from the boundary of the scheme to a common property roadway.
[8] The applicant believes it is unreasonable for the body corporate to grant a lease of a common property area without receiving some form of payment in return. The applicant is also concerned that the owner of lot 8 has erected a gate in this area without firstly obtaining the permission of the body corporate.
[9] The applicant believes that if the gate is allowed to stay in place future lot owners will assume that the ease way is part of lot 8. The applicant further believes that after 5 years the leased area would become part of lot 8.

Submissions

[10] Pursuant to section 243 of the Act[3], the committee and all other owners were invited to make a submission in response to the request for a final order.

• [11] Submissions made by the owner of lot 8 included the following:
  • She has never sought ownership of the subject area but has merely leased the ease-way. The body corporate has agreed that she can occupy this area for a period of 3 years and she has agreed to maintain the area in good condition during that period.
  • The body corporate currently employs gardeners to maintain common property including the area between lots 6 & 7 but not the area between lots 8 and 9, which the respondent maintains at her own cost;
  • The main reason why she wishes to fence off this area is to enable her to keep a pet;
  • The timber fence and gate were erected in March 2005 shortly after settlement in February 2005. At the time of entering purchasing lot 8 she sought permission to construct the gate at her own cost. This is corroborated for two former committee members although the correspondence evidencing the grant of approval was lost when there was a change of body corporate managers;
  • The applicant only began to raise objections after body corporate approval was granted. He noticed an entry in the body corporate accounts relating to purchase of a new gate at a cost of $572 and presumed that this was the gate between lots 8 and 9;
  • The gates that she installed between lots 8 and 9 are never locked and other residents are able to traverse that area;
  • It is not true to state that the ease way will become part of her lot in the future. This can only occur is if the owner of lot 8 purchases the land.
  • It is untrue to say that there was no opportunity for prior discussion before the lease was granted. The applicant would have received a copy of the agenda and explanatory notes prior to the AGM and had an opportunity to raise his concerns at the AGM;
  • There are fences or gates between all the other units in the complex and almost all of the 34 units have a front gate to allow for access to the rear of the units.

[12] A number of owners made brief submissions supporting the applicant on the grounds that the respondent is effectively obtaining exclusive use of a common property area.
[13] A larger number of submissions opposed the application and included the following:

• The majority of owners have no problem with the owner of lot 8 leasing a small area of common property and expressed their wishes at the last AGM;
• Former committee members can recall giving the owner of lot 8 permission to replace wooden gates between lots 8 and 9;
• It is untrue that only the remaining original owners are aware that the subject area is an ease way and that it is subject to a drainage easement. Plans clearly set out the position of boundaries, common property and easements;
• It is not true to say that the body corporate derives no benefit from the arrangement that it has entered into with the owner of lot 8. There is a cost saving to the body corporate because it does not have to maintain the area. Further, if the owner of lot 8 wished to construct a fence between her lot her lot and the common property easeway area, the body corporate would be required to contribute half of the construction cost.

Analysis

[14] As mentioned above, the applicants seek the following outcomes:

• The removal of the illegal gate from body corporate property and a receipt to prove who paid for the fence and gate.
• Overturn motion 9 of the AGM held on 16 July 2011.

[15] The subject motion read as follows:

That under section 161 of the BCCM (Standard Module) I would like to request the leasing of common property between unit 8 and unit 9 for the period of 3 years or less. I propose that the leasing fee be the maintenance of the property.

[16] The minutes of the AGM held on 19 July 2011 record that 8 owners voted in favour and 2 owners voted against this motion.

[17] I have also had the opportunity to peruse a number of other documents including:

• Letter dated 1 August 2010 from the owner of lot 8 seeking approval of the gate across the adjoining ease way;
• Invoice/ receipt dated 20 May 2009 and addressed to Chris Dimmick by 1st Class Fencing;
• Letter dated 15 September 2011 from Mr. Pigram of Professionals Beenleigh;
• Letters from former committee members Mr. Bob Stockwell, Ms. Nicole Neihoff and Ms. Sheryl Urquhart.

[18] Ms Neihoff and Ms Urquhart both state that in late 2004/ early 2005 they were contacted by Mr. Pigram, a real estate salesman acting on behalf of Ms. Dimmick enquiring whether it would be possible to erect a fence across the ease way so that she would be able to keep a pet dog in the area.

• [19] The matter was discussed at the next committee meeting and it was determined that the two available options were:
  • Fencing off the length of the common property, the cost of which would be shared by the owner of lot 8 and the body corporate; and
  • Fencing off the ease way with a gate between lots 8 and 9 on condition that it is not locked.

[20] The committee expressed a preference for the second option as it was considered that the first option would be a waste of scarce body corporate funds. Further, if access to underlying drain pipes was required in the future, it would be hard to manoeuvre machinery in the ease way if a fence was erected.
[21] Ms. Dimmick agreed to the second option and proceeded to have the gate installed after settlement. They believe that this approval was evidenced in writing but a number of records were misplaced when there was a changeover of body corporate managers.
[22] Mr. Stockwell has confirmed in writing that in March 2005 he assisted Ms. Dimmick to install fencing and the gate between lots 8 and 9. The materials were provided by Ms. Dimmick while his time and labour were provided free of charge. This is further corroborated by ; Invoice/ receipt dated 20 May 2009 from 1st Class Fencing and addressed to Ms. Dimmick.
[23] It is therefore clear to me that the gate between lots 8 and 9 was installed and paid for by the owner of lot 8.
[24] Under paragraph 167(b) of the Standard Module the Body Corporate is entitled to grant or amend a lease over a body corporate asset that is freehold land, or another body corporate asset capable of being leased only if authorised by-

• (i) if the term of the lease as granted or amended, is more than 3 years – resolution without dissent; or
• (ii) if subparagraph (i) does not apply – special resolution.

[25] It is also clear to me that the body corporate in general meeting made a valid decision to lease the small area of land to the owner of lot 8 subject to certain conditions. The minutes of the AGM held on 19 July 2011 record that 8 owners voted in favour and 2 owners voted against this motion. Therefore the requirements for a special resolution have been met.
[26] The relevant area is common property, as depicted on the Group Title Plan (now known as a Standard Format Plan), and will remain common property, albeit subject to a 3 year lease. The applicant’s argument that the ease way will become part of lot 8 has no basis in Queensland law. In Queensland, section 198A(1) of the Property Law Act 1974 (Qld) expressly prohibits the creation of prescriptive rights.
[27] The evidence provided to me indicates that this area is not used as a thoroughfare and the owner of lot 8 has agreed not to lock the gate in case access to the area is required (e.g. to dig up a blocked pipe). This would appear to be a win-win outcome for both the owner of lot 8 and the body corporate. If the owner of lot 8 were to erect a fence the southern boundary of her lot she would be entitled to claim half the cost of constructing and maintaining the fence from the owner of the adjoining land i.e. the body corporate. This arrangement also relieves the body corporate of the need to maintain the lawn in that area during the 3 year period.
[28] For the above reasons the application is dismissed.

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[1] Sections 227,228, 276 and Schedule 5 of the Act
[2] Section 276(1)(a) of the Act
[3] Section 271 of the Act