Body Corporate for “Edgewater Gardens” CTS 10507 v Trankalis
[2003] QDC 19
•21 March 2003
DISTRICT COURT OF QUEENSLAND
CITATION:
Body Corporate for “Edgewater Gardens” CTS 10507 v. Trankalis & Ors [2003] QDC 019
PARTIES:
BODY CORPORATE FOR ‘EDGEWATER GARDENS” CTS 10507
Appellant
v
SYLVIA TRANKALIS & ORS
Respondents
FILE NO/S:
D4454 of 2000
DIVISION:
PROCEEDING:
Appeal from adjudicator
ORIGINATING COURT:
District Court Brisbane
DELIVERED ON:
21 March 2003
DELIVERED AT:
Brisbane
HEARING DATE:
11 April 2002
JUDGE:
McGill SC DCJ
ORDER:
Appeal dismissed. Order of adjudicator confirmed.
CATCHWORDS:
HOME AND COMMERCIAL UNITS – By-laws of body corporate – exclusive use by-law – whether valid – whether allocation valid – Body Corporate and Community Management Act 1997 ss 283, 286.
COUNSEL:
H P Bowskill for the appellant
R J Clutterbuck for the first respondent
SOLICITORS:
Herd and Janes for the appellant
O’Reilly Lillicrap for the first respondent
This is an appeal from a decision of an adjudicator made on an application under Chapter 6 of the Body Corporate and Community Management Act 1997 (“the 1997 Act”). By s.237 of the 1997 Act, the appellant, if an aggrieved person, may appeal to the District Court but only on a question of law. The appellant, being the applicant in the proceeding before the adjudicator, and being aggrieved by the adjudicator’s order, which was to dismiss the application, is an aggrieved person for the purposes of the Act. The appeal was apparently started by filing a Notice of Appeal on 6 November 2000.
The powers of the court on appeal are set out in s.242:
“(1) In deciding an appeal, the District Court may –
(a) confirm or amend the order under appeal; or
(b) set aside the order and substitute another order or decision; or
(c) through the commissioner, refer the order back to the adjudicator with appropriate direction having regard to the question of law the subject of the appeal.
(2) The court may amend or substitute an order only if the adjudicator
would have had jurisdiction to make the amended or substituted order or decision.”
On 10 April 2000, the appellant lodged with the Commissioner an application to resolve a dispute according to Part 4 of the 1997 Act, seeking the following orders:
“(a)That the adjudicator order that the Body Corporate consent to a new community management statement in the form annexed and marked ‘2(D)” which grants the exclusive use of a car space(s)/storage space(s) under By-Law 24 and allocates the exclusive use areas for car space(s)/storage space(s) to each lot owner in accordance with Schedule E and the plans annexed to the community management statement on the basis of the original intent of the developer as detailed in the notification of allocation, notification of re-allocation and the subsequent usage of those car space(s)/storage space(s) by lot owners since 1982.
(b)In the event that the order referred to in (a) above is granted, then a further order that the installation of the existing storage cupboards and wire compounds in the car space(s)/storage space(s) areas be ratified under s.124 of the Body Corporate and Community Management (Standard Module) Regulation 1997.”
On 1 August 2000, the adjudicator dismissed the application. Reasons were given, and the crucial conclusion in the reasons appears towards the foot of p.1:
“The body corporate has sought to obtain approval for a new by-law on the basis that there is no existing exclusive use by-law. In my view, that is not correct.”
It followed that the body corporate in making the application was proceeding on the mistaken belief that there was not already a valid by-law, so the first order sought was unnecessary and inappropriate. The adjudicator also regarded the second order sought as unnecessary, on the basis that owners “must initially seek body corporate approval. If approval is not given, an owner can subsequently make application to an adjudicator.”
The appellant submitted in essence that the adjudicator had missed the point. The question was not whether there was a valid by-law, but whether there had been at some time in the past, and was now, a valid allocation of car parking spaces. The problem was that as a result of subsequent changes to legislation, even though the by-law as such may have remained valid, the allocations of car park spaces to particular lots under the by-law had ceased to be effective, because the legislation had introduced requirements for validity which had not been complied with. It was not a question of whether there was an existing exclusive use by-law. It was a question of whether there was in force a valid and effectual allocation of car parking spaces, either pursuant to that by-law or on any other basis. The respondents on the other hand submit that the adjudicator has addressed the correct issue, and that the reasoning of the adjudicator is correct.
Factual background
The background to this appeal is lengthy and somewhat complicated, although fortunately there does not appear to be any significant difference between the parties as to just what happened and when. The starting point is that on 27 January 1982 Building Units Plan No. 4682 for “Edgewater Gardens” was registered in the Department of Natural Resources, pursuant to the Building Units and Group Titles Act 1980 which was then in force (“the 1980 Act”). The plan was for a residential block, containing 62 lots, and there was provision for car parking spaces, although the Building Units Plan which was registered did not include in each residential lot one or more of the car parking spaces. Rather, all the car parking spaces were part of the common property. However, the developer contemplated that particular car parking spaces would be associated with particular lots, and sought to do this by taking advantage of the provision in the 1980 Act which permitted the exclusive use and enjoyment of a part of the common property to be conferred on the proprietor of a particular lot by a by-law made pursuant to “a resolution without dissent”, and with consent in writing of the proprietor of the particular lot: s 30(7).
This subsection reads as though it was necessary for the by-law to identify the particular part of the common property, the exclusive use of which was conferred on the proprietor of a particular lot, but the High Court in Dainford Ltd v Smith (1985) 155 CLR 342 upheld the validity of a by-law which provided that the proprietor for the time being of each lot in the building would be entitled to the exclusive use of a car parking space notified in writing by the developer to the council of the body corporate within 12 months after the date of registration of the plan, with a provision authorising the council to vary the allocations and transpose car parking spaces in certain circumstances. The High Court held that subsection (7) did not require that the part of the common property, the exclusive use of which was conferred on the proprietor, be identified by the by-law itself, and that a by-law would be valid even though identification was made by reference to another document or to some extrinsic facts.[1]
[1]The court divided 3-2 on this issue, with the majority reversing the decision of the Full Court of Queensland, which had (by 2-1 majority) allowed an appeal against a judgment for specific performance in favour of the successful appellant in the High Court. About this time there was a great deal of litigation in Queensland seeking specific performance of contracts to purchase home units from developers. There had earlier been something of a speculative flurry in such contracts, and some purchasers signed contracts to buy units in the expectation that they could be resold for profit prior to the time when the contract was due for completion. When the market for “home unit futures” collapsed, a good deal of legal ingenuity came to be applied to the enforceability of what was proposed by the various developers, and one issue which was considered was whether contractual promises to provide car parking spaces were being met by what was being offered at settlement by the developer. That in turn gave rise to concern on the part of other purchasers that they might not be obtaining secure rights in respect of a car parking space, something which most of them regarded as being of considerable importance. Because a number of developers had used this formulation in a number of projects, the enforceability of a number of contracts turned on this High Court decision, although many more where the same issue arose had already been resolved one way or another beforehand.
In the present case a by-law was at the first annual general meeting added to the third schedule in the following terms:
“46.The proprietor for the time being of each unit in the building shall be entitled to the exclusive use for himself and his licensees of the car space or spaces or the storage space or spaces, the identifying number or numbers of which shall be notified in writing by Rooskye Pty Ltd to the council of the body corporate within 12 months after the date of registration of the building units plan provided that in respect of those car spaces or storage spaces allocated pursuant to this by-law, the council is hereby authorised to vary the allocations so made and to transpose car spaces or storage spaces from one unit to another unit at any time and from time to time on the written request of the proprietors of the units involved. A sketch plan is set out hereunder for the purpose of clearly identifying the said car spaces or storage spaces. The identifying number as set out in such sketch plan shall be used by Rooskye Pty Ltd for the purpose of its notification to the said council of the body corporate.”
The motion was moved and carried without dissent, the developer being at that time still the proprietor of all of the lots. There was a sketch plan attached to the by-law which identified car spaces by numbers 1 to 65. The general meeting of the body corporate occurred on 2 February 1982, after the registration of the plan. The notification from the body corporate, of the change in the by-law to incorporate By-law 46, was received in the office of the Registrar of Titles on 9 February 1982, and recorded on the plan on 24 February 1982. It thereupon had force and effect pursuant to s.30(3) of the 1980 Act.
The power conferred on Rooskye Pty Ltd to notify in writing the allocation of car parking spaces was exercised by a letter from the company dated 3 February 1982. The adjudicator found that that notice was genuine and sent at that time, and that finding was not challenged before me. Although the by-law did not take effect until the notification was recorded on the registered plan, once it took effect it would operate by reference to any notification given within the time limit specified in the by-law, even if the notification had been given prior to registration. In my opinion, that follows from the reasoning of the majority in Dainford v. Smith (supra).
At that stage there was no requirement that anything other than the by-laws be registered, and, where there was an arrangement of the Dainford type, as here, confirmation that a particular car park was allocated to a particular lot could not be obtained by searching the registered plan. That someone should be able to ascertain this information by searching the plan was one of the matters relied on by Mason J at p.352 in his dissenting judgment. The majority, however, did not regard this as an obstacle to the interpretation they favoured, on the basis that a prospective purchaser could obtain the necessary information by searching the records of the body corporate: p.349. The difficulty in ascertaining the history of the allocation of car parking spaces in the present case reveals that that expectation has not always been justified.
Nevertheless, in my opinion, it is clear from the decision of the High Court that once the plan has been registered the various lot owners had rights in respect of various car parks allocated by Rooskye Pty Ltd as appurtenant to and for the benefit of, the respective lots: s.30(8). There was no necessity for registration of the allocation at that stage.
Thus far I am entirely in agreement with the adjudicator. Indeed, I do not understand that the appellant argues to the contrary.
The 1990 amendment
Apparently the legislature was concerned about the inability of prospective purchasers to obtain by a search of the registered plan details of what car parking spaces were allocated to what units. In 1990 the 1980 Act was amended by the Building Units Group Title Act Amendment Act 1990 (Act No. 87 of 1990). By that Act s.30 was amended by substituting new provisions allowing a by-law to confer on the proprietor of a lot exclusive use and enjoyment of part of the common property, in a way which largely followed but enlarged upon the previous mechanism. It expressly approved the sort of scheme which had been validated in Dainford v. Smith (supra) by which the by-law could authorise a person (such as the developer) to identify or define the relevant common property and to allocate the relevant parts of the common property, that is, the car parking spaces, to the respective proprietors of each lot, and could authorise the transposition of particular areas of common property from one proprietor to another.
It then went on to provide:
“Neither the allocation of identified or defined common property nor any variation or transposition in relation thereto (which occurs after the commencement of the Building Units and Group Titles Act Amendment Act 1990, other than sections 1 and 2) has any force or effect until the Registrar of Titles has, pursuant to a notification in the prescribed form lodged in his office by the body corporate, recorded the notification on the registered plan.
The Registrar of Titles shall not record a notification on the registered plan in relation to an allocation of identified or defined common property or any variation or transposition in relation thereto (not being an allocation of identified or defined common property or any variation or transposition in relation thereto which occurred prior to the commencement of the Building Units and Group Titles Act Amendment Act 1990, other than sections 1 and 2) which occurred more than three months prior to the lodgement of the notification.”
Subsection (3) was also amended to impose a similar time limit of three months for recording a notification on the registered plan of an amendment to, addition to or repeal of the by-laws. The notification of this had to occur not more than three months after it was made by the body corporate.
By s 2 that Act, other than sections 1 and 2, commenced on a day or days appointed by proclamation. Section 12 which made the relevant amendment commenced 1 April 1992 (1991 SL No. 224), together with s.6(c) and 17; the remaining provisions commenced on 16 February 1991: Government Gazette 16 February 1991, p.823. It follows that in my opinion these amendments had no effect on the validity of any allocation, variation or transposition that had occurred up until 1 April 1992, although they imposed a requirement of timely notification and registration on the validity of any subsequent allocation, variation or transposition.
Apart from the original allocation, on 5 August 1982 a meeting of the council of the body corporate resolved to approve a swap of car parking spaces between lots 4 and 52. Further, on 14 November 1988, solicitors forwarded a request for transposition of car spaces signed by the proprietors of lots 1 and 32 seeking transposition so that car space number 63 was allocated to lot 32 and car space no. 64 was allocated to lot 1. This, however, cannot be reconciled with the allocation in the letter from Rooskye Pty Ltd of 3 February 1982 under which lot 1 held car space 62 and lot 32 held car space 64. Car space 63 had been there allocated to lot 37, the owners of which was not a party to this request. Whether this was simply a typing error, and the request referred to lot 63 when it ought to have referred to lot 62, or whether the proprietor of lot 1 had in fact been using car space 63 rather than car space 62, I cannot say and the adjudicator did not determine.
On 22 November 1988, the secretary of the body corporate wrote to the solicitors to
“…confirm that we have amended our records as follows:
-lot 1 – car space 64
-lot 32 – car space 63.”
That was in accordance with the request, but continued the apparent error, suggesting that this was not a typographical error. There must be some considerable doubt about the validity of this transposition. The by-law requires that any variation or transposition be made by the council, and a mere “alteration to the records” in response to a request by the parties would not, in my opinion, effect a valid transposition. The chronologies provided to me do not suggest that anything further happened prior to the commencement of the 1990 amendments on 1 April 1992.
Attempts to regularise the allocation
The minutes of the meeting of the committee of the body corporate on 27 July 1993 record a resolution in the following terms:
“Pursuant to by-law 46, it was resolved to reconfirm that, in accordance with the original plan, car space 65 as shown on the plan be allocated to lot 61. It was further resolved that car spaces 49 and 50 be allocated to lot 62 in accordance with the original plan.”
The reference to the original plan may be referenced to the original allocation, because that does provide that car space 65 is allocated to lot 61, and car spaces 49 and 50 allocated to lot 62. It does not appear that this effected any change from the previous valid allocation.
On 7 December 1994 at a meeting of the committee of the body corporate it was noted that a number of car spaces had been altered over the past 12 years. The chairman tabled a document showing “the current accepted and obviously agreed allocation of car spaces.” It was resolved that “on the assumption that proprietors have obviously agreed to the allocation through accepted common usage, the schedule attached showing the allocation of car spaces be approved pursuant to the provisions of the Edgewater Gardens BUP 4682 by-laws.”
A comparison of the schedule with the original allocation letter of 3 February 1982 shows that most lots still have the same car park space number, but there are a number of changes including some which are not reflected in anything already mentioned in this judgment. It is possible that these were allocations transposed by the council in accordance with the by-law prior to the commencement of the 1990 amendment, but it is also quite possible that some of these are simply informal arrangements, or attempts to comply with the by-law which did not do so. Insofar as this could be seen as an exercise of the power to transpose or vary the allocation by the council, it was ineffectual because:
(a) there was apparently no written request to effect any necessary alternation or transposition from the owners of the lots involved;
(b) the variation or transposition was not, within three months after it was made, notified to the Registrar of Titles and subsequently registered on the plan as required by s.30(7D) of the 1980 Act.
The issue came up again at the annual general meeting of the body corporate on 25 February 1995. On this occasion 19 owners or representatives of owners were present in person, and proxies were admitted from the owners of a further 44 lots. The minutes record motion 16 in the following terms:
“Resolved by 59 to 0 that pursuant to the provisions of by-law 46, the allocation of car spaces be confirmed as described in the attached schedule.”
Attached was what appeared to be a copy of the schedule that had been attached to the minutes of the meeting of the committee of 7 December 1994. In my opinion, this further attempt to resolve the issue of car parking spaces, in a way which was at the time apparently uncontroversial, was ineffectual because:
(a) The machinery provided in by-law 46 was not followed, this not being a decision of the committee and not being at the written request of the proprietors concerned.
(b) It was not notified for registration within three months, and not registered on the building units plan.
It also could not take effect as an amendment to the by-laws. It would have been possible at that meeting by that resolution, being a resolution passed without dissent, to make a by-law which confirmed an allocation in terms of that schedule in substitution for the original allocation under by-law 46 and any variations to date. It would not have that effect because:
(a) what was done did not purport to be an amendment to the by-laws;
(b) it is not clear that the amendment was effected with the written consent of the proprietors of the lots concerned, which would have been at least all of the lots where the allocation was changed, as required by s.30(7);
(c) the purported amendment to the by-laws was not recorded on the registered plan, there having been no notification in the prescribed form to the Registrar of Titles as required by s.30(3) of that purported amendment. Once three months elapsed after the annual general meeting it became too late to satisfy this requirement, because of the time limit in s.30(3A).
It may be that as a matter of construction the resolution could be seen as an amendment to the by-law, but given the other difficulties, in my opinion this attempt to resolve the question of car parking was ineffective, at least in terms of the requirements of the Act.
That may have been realised at the time because on 26 February 1986 there was an extraordinary general meeting (following the annual general meeting) of the body corporate at which it had been proposed to move an amendment to the by-laws to provide a fresh allocation of car parking spaces, however the minutes indicate the chairman advised that, following legal advice that the requirements of the legislation had not been complied with, the motion could not be voted on. At the annual general meeting held the following year on 24 February 1997 a motion to amend the by-laws to add a new by-law allocating car parking spaces according to the plan, and authorising the committee upon request to transfer car park spaces from one proprietor to another, was lost, the motion not being carried without dissent. One vote was recorded against the motion.
The 1997 Act
It was not suggested that any subsequent amendment to the 1980 Act was relevant to the question of the allocation of car parking spaces. On 13 July 1997 the Body Corporate and Community Management Act 1997 (“the 1997 Act”) commenced. This Act replaced the 1980 Act, which was thereafter given only a limited operation: see Schedule 3 of the 1997 Act. Community titles schemes were established in place of building units plans under the 1980 Act (s.271(1)(a)). On the commencement of the Act, the “basic scheme” Community Title Scheme was established for the existing plan, lots on existing plans became lots in the new scheme, and the body corporate under the 1980 Act continued as the body corporate under the 1997 Act: s.276. Every community title scheme under the 1997 Act has a community management statement which is crucial to its identity: s 11(1). One of the things that a community management scheme incorporates is by-laws, unless the by-laws in Schedule 2 are adopted: s.57(1)(d).
Section 283 provided that on its establishment the new scheme was taken to have a community management statement which in turn was taken to include the by-laws that, immediately before the commencement, were the by-laws in force for the plan, and to show allocations of common property, including variations and transpositions of common property, that, immediately before the commencement, were in force under the by-laws for the plan. This deemed statement, called the “Interim Statement”, would continue until the new community management statement was recorded for the scheme under the 1997 Act, or the end of three years after the commencement of the Act: sub-section (3). There was also provision for a notification of an allocation, variation or transposition of identified common property occurring prior to commencement to be recorded and thus affect the interim statement: sub-section (4).[2] The effect of these provisions was that, until the new statement was registered, the existing by-laws including the exclusive use by-law, and the allocations under that by-law, so far as they were already valid, continued in force.
[2]I shall return to the effect of this subsection.
A new community management scheme was recorded on 1 July 1998. A copy of the community management scheme is in the material. The previous by-law 46 was in terms reproduced, renumbered 24, but without any allocation of the various car parking spaces. It was recorded by the Registrar.
Subsequent attempts by the body corporate
After commencement of the 1997 Act, and before the new community management scheme was recorded, at the annual general meeting of the body corporate on 29 May 1998 a resolution was passed amending the by-laws but retaining the existing by-law 46, although renumbering it as by-law 24. There was a further resolution put seeking to amend the exclusive use by-law to provide for a particular allocation of carparking spaces, but that proposed amendment did not pass as a resolution without dissent, there being three votes against. The following year at the annual general meeting on 7 June 1999 a new exclusive use by-law was proposed, which set out an allocation and enabled lot owners to reallocate (or swap) spaces at a later time if they agreed to do so. That latter provision would appear to have been in accordance with s 134(1)(b)(ii). In any case the motion was lost, with 13 votes against. However there was another resolution passed as a special resolution to amend another by-law, not the exclusive use by-law, and as a consequence of that amendment a new community management statement was prepared and recorded on 14 July 1999. This new statement merely reproduced the exclusive use by-law from the previous statement.[3]
[3]That document contains, in Schedule E – Description of Lots Allocated Exclusive Use Areas of Common Property, the words “Nil allocated”. That was not correct and ought not to have been included. No doubt it was put there because the form for a community management statement makes provision for this schedule, and states: “This statement must include the following … Schedule E – allocation of exclusive use areas.” For reasons I give later, that is not correct; the 1997 Act does not require all allocations to be registered, only “authorised allocations” and “agreed allocations” as defined. There was no requirement, or even power, to record the allocation which had been made, or to record a “nil” allocation. In my opinion this erroneous entry did not have the effect of depriving the lot owners of the rights to exclusive use of the relevant parts of the common property which they otherwise had. There is nothing in the Act which would produce that result.
On 14 January 2000 an extraordinary general meeting of the body corporate was held to consider two motions, proposed in the alternative, to repeal the existing exclusive use by-law and record new exclusive use by-laws. The first motion proposed a by-law which referred to all of the carparking spaces, but as some lot owners had not given written consent to the allocation in accordance with the proposed new by-law, the motion was ruled out of order and not proceeded with. In the absence of written consent of all lot owners affected, this motion even if passed without dissent would not have been effective to satisfy the requirements of s 134(2)(a) of the 1997 Act. There was then an alternative motion put which would have repealed the existing by-law 24 in respect of those lot owners who had given written consent and would provide allocations as set out in the schedule in respect of those lot owners. However, that resolution did not pass as a resolution without dissent, 12 votes against being recorded. It was following this meeting that the application was made to resolve the dispute on 10 April 2000.
It is apparent from the minutes of these meetings that an issue which has prompted some dissension among lot owners has been the erection of various structures on the carparking spaces in an attempt to make them secure. I gather these have been erected by individual lot owners on the carparking spaces allocated (or believed to be allocated) to them, apparently generally with the approval of the committee from time to time, and there was at one general meeting a resolution carried approving all existing structures, though not without dissent. I take it that there is some dispute about these structures,[4] and that the difficulties in relation to the validity of the allocation have arisen perhaps as a by-product of that other dispute. Nevertheless, there is a dispute about the carparking allocation which has to be resolved.
[4]See Clemens v Henville (Appeal 665 of 2000, Hall DCJ, 25.10.01, unreported).
Exclusive use by-laws under the 1997 Act
The provisions in the 1997 Act dealing with exclusive use by-laws are contained in Division 2 of Part 5. The 1997 Act contemplates that a by-law included in a community titles scheme may give the occupier of a lot “exclusive use to the rights and enjoyment of, or other special rights about –
(a) common property; or
(b) a body corporate asset.”[5]
However, I cannot find the provision which is equivalent to s 30(7) of the 1980 Act, by which the body corporate is expressly empowered, subject to certain requirements, by by-law to confer rights of exclusive use and enjoyment of, or special privileges in respect of, the whole or any part of the common property on the proprietor of a lot. Nevertheless the provisions of Division 2 within Part 5 dealing with by-laws assume that there is such a power. The effect of s 134 appears to be that any exclusive use by-law must either specifically identify in the by-law the common property to which the exclusive use by-law applies, or provide for the common property to be allocated “by a person (who may be the original owner or the original owner’s agent) authorised under the by-law to make the allocation or by two or more lot owners under a reallocation agreement.” This provision appears to be intended to be equivalent to s 30(7B) of the 1980 Act, and with the benefit of some knowledge of the history of the legislation it is possible to deduce that s 134(1)(a) is a requirement that the relationship between a particular piece of the common property in respect of which a particular lot obtains the right of exclusive use (or some other exclusive right) under the by-law and that lot is to be identified in the by-law itself, something which is by no means apparent by reading the section in isolation.
[5]Section 133(1) – sic. Presumably this means “exclusive rights to the use and enjoyment of”.
Even apart from this however, this section is curiously drafted. Confining the analysis just to a situation where what is being dealt with is carparking spaces, paragraph (a) apparently covers the situation where the exclusive use by-law provides in terms which carparking space is allocated to which lot. It would operate if there was a separate exclusive use by-law for each lot, or if there was one exclusive use by-law which dealt with all carparking spaces by identifying each space and the lot which had the benefit of it.[6] Paragraph (b)(i) appears to be intended to cover the situation which was common, as mentioned earlier, where the carparking spaces were allocated by the original owner, that is by the developer. That would be consistent with the provisions of s 137(1) that the allocation under such by-law has no effect unless it is made within 12 months after the recording of the community management statement that first includes the exclusive use by-law.[7] What happens if that does not occur for some reason is not made clear by the Act, but s 137 seems to assume that an “authorised allocation” is a once for all event. It therefore does not appear to contemplate a situation where there is a power conferred by the by-law on the council or committee of the body corporate (or any other organ of the body corporate) to “reallocate” carparking spaces.
[6]Such a scheme of course would be highly inflexible.
[7]This section was substituted by the 2003 Amending Act s.54, but the new s 137(2)(a) appears to be to the same effect.
Paragraph (b)(ii) speaks about a reallocation agreement by two or more lot owners. The difficulty with this provision is that a power to reallocate in this way makes no sense unless there has been some prior allocation by reference to which the reallocation can take place. But a prior allocation by the by-law itself, under paragraph (a), is an alternative to such a scheme; s 134 permits an allocation within the by-law itself, or a reallocation agreement, but apparently not both in respect of the same community titles scheme. In addition if read literally paragraph (b) permits either an allocation by the original owner or someone else authorised under the by-law or reallocation under a reallocation agreement, but not both. Bearing in mind that the allocation under paragraph (b)(i) can only occur during the first 12 months after the by-law is first included in the scheme, giving a literal construction to this provision produces a result which is manifestly unworkable. In order to avoid (or at least minimise) the absurdity of this provision, I think this must be treated as an example of one of those rare cases where the word “or” in a statute on its true construction may mean “and”.[8]
[8]That is, operates in a conjunctive way: O’Neill v Smith (1994) FLC #92-452; Electricity Trust (SA) v Krone (1994) 51 FCR 540 at 547; but see Morgan v Thomas (1882) 9 QBD 643 at 645-6; Re The Licensing Ordinance (1968) 13 FLR 143 at 147. Perhaps the same could be said of the “or” at the end of paragraph (a).
Overall it appears to me that s 134 is an unsatisfactory provision. It is cast as a restrictive provision, unlike s 30(7B) of the 1980 Act which is cast as an enabling provision, and it appears to be drafted without regard to the way in which such a scheme might be expected to work in practice. There is then a divergence in ss (2) and (3) between a s 134(1)(a) allocation and a s 134(1)(b) allocation. An exclusive use by-law of the former kind, unless it is contained in the first community management statement, 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.[9] On the other hand, an exclusive use by-law under s 134(1)(b)(i) only requires the agreement in writing of the lot owner prior to the allocation by the person authorised under the by-law. Nevertheless, the by-law will still require consent in the form of a resolution without dissent: s 55(2). No doubt in practice such a scheme will be workable only if the allocation is undertaken by the developer prior to the time when any of the lots are sold.
[9]There has been a minor amendment to s 134(2)(a) by the 2003 Amending Act, which I do not understand.
Incidentally, both ss (2) and (3) contained restrictions on the situation in which the benefit of an exclusive use by-law may stop applying to a lot; in the former case there must be both the consent of the lot owner and a resolution without dissent consenting to the recording of the new community management statement that does not incorporate the exclusive use by-law. Presumably one in different terms could be substituted, but this would still appear to mean that, in the case where the carparking spaces were individually allocated by the by-law, an amendment to the by-laws to, for example, swap two of the carparking spaces would still require the consent in writing of all the owners of all of the lots which had carparking spaces allocated in the by-law, as well as a resolution without dissent substituting the by-law with the new allocation. That would make a s 134(1)(a) exclusive use by-law a very inflexible mechanism for dealing with something like carparking spaces. On the other hand, a s 134(1)(b)(i) by-law may stop applying to a lot only if the lot owner agrees in writing or “the allocation is revoked under the by-law (if the by-law provides for the revocation of an allocation)”,[10] or by the passing of a resolution without dissent consenting to the recording of a new community management statement that does not incorporate the exclusive use by-law (that is, the by-law itself is “revoked”). Again this is a remarkably inflexible arrangement, because apparently any revocation under the by-law could not be followed by provision for reallocation under the by-law unless that occurred within time permitted under s 137(1)(a). Nevertheless these provisions do show a legislative recognition that rights conferred under an exclusive use by-law are not lightly to be taken away or lost.[11]
[10]Section 134(3)(b)(i); the words in brackets are tautological.
[11]The 2003 Amending Act altered the requirements of s 134(2)(b) and (3)(b) in a way which I do not understand. It may be that the legislature sought to ensure that the affected lot owner would not be deprived by a resolution passed without dissent in his absence, but whatever it means it does not change the legislative intent expressed in 1997.
Section 135 permits the registrar to acquire the relevant common property to be identified on a plan or in some other appropriate way, which is a useful power. Section 136 permits the regulation module applying to the scheme to make provision about various things, none of which appears to me to be presently relevant. Section 137 prescribed the requirements for allocations of common property, under a s 134(1)(b) exclusive use by-law, to be effective. An authorised allocation must, as noted earlier, be made within 12 months after the exclusive use by-law is first recorded in a community management statement for the body corporate, and details of the allocation must be given to the body corporate, or it has no effect: ss (2). There is no other requirement for the allocation to take effect, but the subsequent subsections[12] provide that unless certain steps are taken by the body corporate allocations will cease to have effect.[13] Within three months after the 12 month period referred to in ss (1)(a) the body corporate had to lodge with the registrar a request to record a new management statement showing all authorised allocations made within the 12 month period, and all authorised and agreed allocation currently in place when the body corporate consented to the recording of the new statement.
[12]Since the 2003 amendments, s 137A.
[13]This provision is somewhat surprising because generally in the legislation some care has been taken to preserve the benefit to lot owners of the rights which are conferred under the exclusive use by-laws, in recognition of the importance of their subject matter, commonly carparking spaces.
There is a mechanism for this period of three months to be extended by an order of an adjudicator, and if the order is made after the three month period has elapsed the allocation is preserved under ss (5), retrospectively notwithstanding ss (4).[14] Indeed, if the agreed allocation ceases to have effect under ss (4), it appears that the only way in which the matter can be dealt with is by obtaining an order of an adjudicator under the dispute resolution provisions, since by the time the three month period has elapsed it would be too late to make an “authorised allocation” which could comply with the requirement of s 137(1)(a). Since the function of an adjudicator is to resolve disputes (s 183(1)) this section in theory would not be available unless there was some disagreement within the body corporate as to how the difficulty should be overcome, but I suppose if necessary a dispute could be manufactured in order to enable the provisions of Chapter 6 to be activated.
[14]So an allocation could take effect, cease to have effect, and then take effect again retrospectively! The post 2003 equivalents are s 137A(7) and (5).
There was also a requirement in s 138 for the body corporate to do something within three months after what was described as a “further allocation” took effect. This was a reference to “an authorised or agreed allocation (other than an allocation included in a subsequent statement)”, with the part in brackets being a reference to an allocation included in the statement given in compliance with s 137(3). Within three months of such an allocation taking effect, that is to say within three months of details of the allocation being given to the body corporate, the body corporate had to “lodge with the registrar a request to record a new community management statement showing all allocations currently in place when the body corporate consented to the recording of the new statement.” Why a mere change in allocation should require the recording of a whole new statement rather than simply a reference to the change in allocation is beyond me; this seems to require the body corporate to go to a good deal of additional trouble apparently so that the persons searching in the register need look at only one community management statement.
The reference to the time “when the body corporate consented to the recording of the statement” is a reminder of the requirement in s 50(2) that a new community statement may be recorded only if the body corporate consents to the recording of the new statement. Section 55 prescribes the form of consent, but ss (4) provides, inter alia, that where the new community management statement differs from the existing statement only to the extent necessary for compliance for the provision of the Act under which the body corporate is required to lodge a request to record a new statement,[15] the consent need not be in the form of a resolution without dissent or special resolution. Unfortunately the section does not seem to say what form the consent is to take.[16] I suppose that in a situation where the body corporate is required to consent, the form of the consent is really irrelevant.[17]
[15]There is a separate parallel provision in ss (4)(d) where the only difference is for recording the details of allocations of common property made under an exclusive use by-law: it is not apparent why the lodging of a new community management statement in compliance with s 137(3) or s 138(1) would not fall under both of these provisions.
[16]Presumably s 92(1) applies so that a decision of the committee is necessary and sufficient.
[17]The fact that something being required to be done is really inconsistent with a provision that the body corporate consent to its being done is evidently beyond whoever drafted this Act.
Apart from these difficulties however what was really obscure was the reference in s 138(1) to an authorised allocation. Under s 137(1) the authorised allocation can only occur within the 12 months after the recording of the community management statement that first includes the exclusive use by-law. Since the body corporate is required to record a new community management statement three months after the expiration of that 12 month period to show all authorised allocations made during that period, it would seem to follow that that statement would necessarily show all authorised allocations which could ever take effect under a particular exclusive use by-law. It was suggested that for this reason the section had limited or no application to authorised allocations.[18] That the inclusion of the reference to an authorised allocation in s 138(1) was another drafting error appears to have been confirmed by the 2003 Amending Act, which confined the application of s 138 to an “agreed allocation” under s 134(1)(b)(ii) which had not already been included in a community management statement, although apparently not retrospectively. If that were not the case, the only situation where it could apply was prior to the time when the authorised allocation was included in the subsequent statement. It is unnecessary to dwell on the consequences of such application.
[18]Christensen & Wallace “Body Corporate Law & Practice” para 138.20.
The point of this analysis of these provisions is to show, first, that they are badly drafted, and second, that the Act assumes that whenever there is any allocation or reallocation of some or all of the relevant common property, ie carparking spaces, there will be a new community management statement recorded. Such an arrangement is inconsistent with the idea that the exclusive use by-law in the new community management statement should be treated as a new by-law requiring a new allocation, if it is in the same terms as the one in the former statement. Although in form the community management statement cannot be amended, in substance a new statement operates as if it were merely an amendment, and everything unchanged continues as if the former statement remained in force. A failure to record a new exclusive use by-law will invalidate the by-law, but the failure to record a change in the allocation affects the validity of only the change. Whether or not a new community management statement recording the new allocation is duly recorded, all other allocations will remain valid.
The transitional provisions
In order to deal with the appellant’s submissions it is necessary to consider further the transitional provisions in the 1997 Act. I have already referred to s 283 which provides for a deemed community management statement which, among other things, includes existing by-laws and shows allocations of common property that immediately before the commencement were in force under the by-laws for the plan: s 283(2)(g). Subsection (3) provides that this deemed statement continues to operate until a new community management statement is recorded for the scheme, or the end of three years after the commencement of the Act. There is then provision in ss (4) for, in effect, late notification of an amendment to the by-laws or an allocation, including a variation or transposition, of identified common property. There is then a further saving provision in ss (5) dealing with a situation where a new community management statement is recorded under ss (3)(a) which does not include any by-laws, and if that occurs the by-laws applicable before the new statement was recorded remain in force, and the allocations of identified common property are taken to be the allocations that were in force immediately before the new statement was recorded. It appears from s 283 that some care has been taken, in this section at least, to ensure that allocations under pre-existing by-laws remain in force notwithstanding the change to the new scheme provided by the 1997 Act.
There is a further provision which deals with the situation if s 283(3)(b) applies, so that the deemed community management statement produced by that section ceases to have effect without a new community management statement being recorded. Section 285 provides that in these circumstances the registrar must record a new community management statement which would contain various things identified in ss (4), but significantly would not include any by-laws. However, the legislature has taken the trouble to provide expressly that in this situation the pre-existing by-laws in force when the 1980 Act ceased to apply will be taken to be the by-laws under the new scheme, and “allocations of identified common property for the new scheme are taken to be the allocations that, under s 283(2)(g)(ii) and, if applicable, s 283(4), are the allocations, including variations and transpositions, in force for the scheme immediately before the end of the three years mentioned in subsection (1)”: s 285(5)(b).
Accordingly if nothing were done in a situation such as the present, the existing exclusive use by-law would be preserved on the commencement of the Act by s 283(2)(g)(i), and after the expiration of the three year period by s 285(5)(a), and the allocation that was valid under the 1980 Act will be preserved following the commencement of the 1997 Act by s 283(2)(g)(ii), and after the expiration of three years thereafter by s 285(5)(b). The legislature therefore clearly intended not only that allocations under existing by-laws would be preserved under the new Act, but that they would be preserved even if the body corporate failed to take the step contemplated by the 1997 Act of having recorded a new community management statement within the three year period.
There is also a provision in s 287 to deal with the situation where, immediately before the commencement, the registered proprietor for the time being of a lot in a plan in force under the 1980 Act was entitled or purported to be entitled under a resolution of the body corporate to a right of exclusive use and enjoyment of, or a special privilege in respect of, any of the common property under the existing 1980 Act plan, but no exclusive use by-law for the purpose of the right or special privilege had been agreed to. If that were the situation, by ss (2) a by-law giving effect to the resolution was taken to have been agreed to by the body corporate under the 1980 Act before the commencement. Subsection (3) then provided that the body corporate must not deposit the by-law for recording by the registrar under the 1980 Act unless the lot owner within a reasonable time before the end of 18 months after the commencement of the 1997 Act asked the body corporate to do so. There is then provision for an order of an adjudicator to include a direction that such a by-law be recorded even though more than 18 months has elapsed after the commencement, although the adjudicator also has power to direct a variation or modification of the provisions of the by-law to be deposited or a direction that no by-law be deposited.
It is unnecessary for present purposes to consider whether this power is available to any of the lot owners involved, as a consequence of the resolution of the body corporate without dissent on 25 February 1995 confirming allocation of carparking spaces in accordance with an identified schedule. The adjudicator was not asked to exercise any power under that section, and no argument has been addressed to me on it. Its only significance for present purposes is that it is a further indication of legislative concern to preserve rights to exclusive use to which lot owners were entitled (or purportedly entitled) prior to the commencement of then 1997 Act. It is therefore consistent with the general pattern of the transitional provisions that such rights should be preserved following the commencement of the new Act.
One other transitional provision is in my opinion important. Section 286 provides:
“A by-law, including an exclusive use by-law maintained in force under this part for a new scheme continues to have effect, and may be included in a subsequent community management statement recorded for the scheme, even though it is not competent for the community management statement for a community titles scheme established after the commencement to include the by-law.”
In the present case the former exclusive use by-law was maintained for the new scheme under this part, initially by section 283(2)(g), as mentioned earlier. Section 286 makes it clear that that by-law was validly continued by that subsection even if it did not comply with the requirements for an exclusive use by-law established by the 1997 Act, in Part 5 Division 2, to which I have already referred. In the light of my analysis of these provisions, I think that that by-law did not do so, but it was preserved by this section.
The section goes on to provide that the by-law so continued in force “may be included in a subsequent community management statement recorded for the scheme.” That again is what occurred in this case. When the new community management statement was recorded for this scheme on 14 July 1999, an exclusive use by-law in the same terms (but renumbered) was included in the scheme. Although s 286 does not expressly provide that the by-law included in a subsequent community management statement would continue to have effect, the whole point of that part of the section must be to produce that result.
Section 286 does not refer to any allocation under an exclusive use by-law so continued, and in that way it contrasts with, for example, s 283(2)(g)(ii) which expressly preserves an allocation in such circumstances. That is unnecessary for the first part of s 286, where it operates by reference to the by-law being maintained in force, because s 283 performs that function, and the only function of s 286 is to avoid an argument that by-laws and allocations continued in force under s 283 were nevertheless invalid because they were inconsistent with the provisions for exclusive use by-laws under the 1997 Act.
Where the exclusive use by-law is included in the subsequent community management statement, as contemplated by s 286, there is so far as I can see no express provision in the Act preserving the validity of allocations under that by-law. It may be argued that this is in contrast to the express provisions in s 283, and suggests that the legislative intent was that such allocation would cease to be valid in such circumstances. On the other hand, there is no express provision which says that the allocation ceases to be effective, and it seems to me that there would be no useful purpose to be achieved in continuing an exclusive use by-law in this way pursuant to s 286 unless allocations under the by-law were to be preserved.
The sort of arrangement used by this body corporate was commonplace under the 1980 Act, and prior to the 1990 amendments it was common place for details of allocations of carparks (and other common property exclusively used by particular lot owners) not to appear on any register but to be held only in the records of the various bodies corporate. Presumably the legislature in 1997 recognised this, and recognised that there would be many exclusive use by-laws out there which did not come within the requirements for an exclusive use by-law then proposed by the Bill. Whatever those requirements are on their true construction, they are much more restrictive than the requirements under the 1980 Act. It is in my opinion unlikely that the legislature would have intended that the benefit of such by-laws would be lost by the various lot owners even if the by-laws were, as contemplated by s 286, included in a subsequent community management statement.
The right to exclusive use of part of the common property under the exclusive use by-law is a valuable right. It is not a right of property: Independent Finance Group Pty Ltd v Mytan Pty Ltd [2001] QCA 306, where it was said to be a right in contract, but it is clearly a right in respect of property, and I think it is obvious that it is a valuable right. A lot with a secure right to use carparking space would in my opinion be more valuable than a lot without that secure right. That must have been recognised by the legislature, and it is unlikely that the legislature intended to destroy such rights by the enactment of the new scheme embodied in the 1997 Act.
It was submitted on behalf of the appellant that s 283(4) of the 1997 Act provided for an 18 month period of grace in which, inter alia, a notification of an allocation of identified common property happening before the commencement of the 1997 Act under a by-law for an existing plan may, if deposited for recording within 18 months after the commencement of that Act, be recorded under the 1980 Act, and the interim statement was taken to be amended to reflect the allocation. In my opinion ss (4) was intended to pick up changes which had been validly made under the 1980 Act but had not been recorded under the 1980 Act at the time of the commencement of the 1997 Act. It was necessary to make provision for these to be recorded, and for effect to be given to the change produced by recording this notification in the deemed community management statement which came into existence on the commencement of the 1997 Act.
I suspect that this was put in because, at the time immediately before the commencement of the 1997 Act, the 1980 Act required recording of notification of these matters for validity, and the intention was that these should still be recorded under that Act and that any allocation or reallocation effected in this way should be preserved under the new Act. It may be that the body corporate could have recorded the allocation under the 1980 Act and deposited it within 18 months of the commencement, although that would depend on whether s 283(4) permitted notification of allocations or variations of allocations to be recorded under the 1980 Act after commencement of the 1997 Act, notwithstanding that they would not have been otherwise recordable under the 1980 Act because they had occurred prior to the commencement of the 1990 amendments to the 1980 Act. That issue does not arise in the present case, because no attempt was made to record either the original allocation or any other allocation in reliance on s 283(4) during the 18 month period allowed in that subsection.
I do not think that that subsection in some way impliedly provides that any allocation which was effected under a by-law for an existing 1980 Act plan ceased to take effect if it was not recorded within the time limited by that subsection. It would be odd if an allocation, such as the original allocation in the present case, which was not required to be recorded under the 1980 Act even after the 1990 amendment, would be required to be recorded under this provision for validity, in circumstances where there is nothing in the 1997 Act which requires (as distinct from permits) any allocation prior to the commencement of the 1997 Act to be recorded under the 1980 Act. I do not think therefore that this indicates that after the expiration of that 18 months period any allocation which had not been recorded under the 1980 Act or under this transitional provision would cease to be effective, even though it had until then been valid in accordance with the 1980 Act and the transitional provisions. There is certainly nothing in s 283, or so far as I can see anywhere else in the 1997 Act, which would require that result.
It is a general principle of statutory construction that there is a presumption that the legislature does not intend to deprive people of existing rights,[19] particularly rights of property.[20] This also applies to common law rights[21] and includes rights under contracts, so that there is a presumption that the legislature did not intend to abrogate existing contractual rights.[22] It extends to rights under statutes, at least when individuals have the benefit of specific rights.[23] That is consistent with the provisions of s 20(2)(c) of the Acts Interpretation Act 1954, that the repeal or amendment of an Act does not affect a right acquired under the Act. That provision does not directly apply in the present case, because the 1980 Act was not repealed or amended; rather its provisions were superseded by the 1997 Act. Nevertheless it is consistent with a presumption that in the present case the legislature would not have intended to deprive lot owners of the rights to exclusive use of carparking spaces as a result of the change to the scheme under the 1997 Act.
[19]Potter v Minahan (1908) 7 CLR 277 at 304.
[20]Clissold v Perry (1904) 1 CLR 363 at 373; Wade v NSW Rutile Mining Co Pty Ltd (1970) 121 CLR 177 at 181, 182.
[21]Pyneboard Pty Ltd v Trade Practices Commission (1983) 152 CLR 328 at 341; Alika Holdings Pty Ltd v Stretton [2001] HCA 14, 75 ALJR 626 at 648.
[22]Hayes v Cable (1961) 62 SR(NSW) 1 at 5-6.
[23]“It requires clear words or necessary implication to show that the legislature intends to take away rights once acquired.” - Public Trustee v Ferguson (1940) 57 WN (NSW) 63 at 65 per Nicholas CJ in Eq. concerning rights of inheritance acquired under adoption legislation. “There is a presumption in all legislation that it is not intended to interfere with vested interests. The legislature … can destroy such rights if they please, but it is always taken that they have not done so unless their intention to do so is shown by express words.” – Greville v Williams (1906) 4 CLR 694 at 703, per Griffith CJ, concerning superannuation rights of a public servant.
There is nothing in the object or purpose of the 1997 Act which would suggest that there might have been such a legislative intent, and there are, as I have already mentioned, numerous provisions of the 1997 Act which suggest that in a number of situations the legislature has gone to some trouble to provide expressly that these rights will be preserved. In this context, the absence of any express provision preserving such rights, and the validity of an allocation which was a necessary ingredient of such rights, does not in my opinion suggest a legislative intent that such rights should come to an end when an exclusive use by-law which was valid under the 1980 Act continues in operation in a community management statement recorded under the 1997 Act in accordance with s 286. There is nothing in the scheme of the Act to suggest the legislature had that intention, and the absence of any express provision preserving the effect of such rights by preserving the validity of an allocation is more readily explicable by bad drafting, something that, as I have noted, is a common feature of this legislation.
In those circumstances, in my opinion the correct construction of s 286 is that it validates an exclusive use by-law which has been continued from a 1980 Act plan, both in its deemed operation under the interim statement provided for by s 283, and in its operation in any community management statement subsequently recorded under the 1997 Act. That must be effected by preserving the validity of any allocation which was valid prior to the commencement of the 1997 Act. Indeed, given that it was commonplace under the 1980 Act for allocations not to be recorded in the by-law, the legislature must have contemplated that that situation would arise in relation to by-laws the validity of which was preserved by s 286. In the case of such a by-law there is no point in preserving the validity of the by-law unless the validity of the allocation is also preserved, and therefore s 286 must also impliedly preserve the validity of the allocation.
Indeed, the validity of the allocation was not something which originally depended upon statute. It depends for its effectiveness on the validity of the by-law which provided for the allocation. The allocations considered by the High Court in Dainford Limited v Smith (supra) were valid (according to the majority) despite the provisions of the 1980 Act, not because of them. As long as a by-law is valid, any allocation pursuant to it will necessarily be valid unless there is some statutory provision to the contrary. In respect of allocations occurring after the 1990 amendments, there was such a provision in the 1980 Act. But there is nothing in the transitional provisions of the 1997 Act which deprive any previously valid allocation of validity. It follows that, so long as the exclusive use by-law remains in its present form, which reproduces the form which applied under the 1980 Act, and therefore retains the protection of s 286, allocations under that by-law remain valid. That means that lot owners who are continuing to use the carparking spaces originally allocated by the developer have a valid and enforceable right under the by-law in respect of that carparking space.
The question then arises as to how that by-law can operate consistently with the 1997 Act scheme. I approach that issue on the basis that s 286 demonstrates that the legislature must have intended that by-laws so preserved could continue to operate. That must mean that where the by-law provides some mechanism for reallocation or transposition that mechanism will continue to be valid, even if it would not satisfy the requirements of Division 2 of Part 5 of the 1997 Act. What that means in my opinion is that the mechanism in this by-law for transposition is valid and effective so long as it is followed, and nothing further needs to be done.
Whether some further step is required to make any transposition or reallocation effective depends on whether some provision of the 1997 Act imposes any such requirement. But in my opinion none does. It is not necessary for the by-law to comply with s 134; that is the whole point of s 286. Section 137 cannot apply to the by-law preserved under s 286 because that would frustrate the whole point and purpose of s 286, which is to preserve old by-laws, and it must have been recognised by the legislature as a common feature of those by-laws was that there had been an allocation already made under them; the scheme used in the present case was not uncommon. But the preservation of a by-law under which the original allocation was made years ago is necessarily inconsistent with the imposition of a requirement that the allocation be made within 12 months after the by-law is first included in a community management statement. In my opinion it necessarily follows that s 137[24] cannot apply to a pre-commencement allocation under a by-law preserved by s 286.
[24]And now, following the 2003 amendments, s 137A.
The provisions of s 137 dealing with an agreed allocation, or the provisions of s 138, will not apply to any change in the allocation in accordance with the present by-law because any such change will not be an “agreed allocation” as defined in s 134(1)(b)(ii). The reallocation is not effected by the owners concerned, but by the council (or the committee) of the body corporate on the written request of the proprietors of the units involved. It follows in my opinion that the provisions of the 1997 Act which might otherwise invalidate a reallocation in accordance with this by-law do not apply, and any problems about the validity of changes to the allocation which have occurred over the years can in my opinion be remedied simply by the committee, if all of the affected lot owners so request. There is no need for anything to be recorded.
That will mean that, in respect of by-laws preserved by s 286, details of the allocation will still not be available by searching the community management statement. It will be necessary to do what was necessary under the 1980 Act originally, to go and check the records of the body corporate. The “reform” of 1990 will not have been entirely preserved by the 1997 Act, but in my view that is no great loss because the benefit of that reform is doubtful in circumstances where there was no mechanism for recording past allocations. In any case, if it is necessary to choose between a construction of the 1997 Act which means that not all allocations will be recorded and a construction which means that formerly valid allocations will have been invalidated, I prefer the former construction, for reasons which I have given.
Conclusion
The whole basis of the body corporate’s application to the commissioner for a determination by the adjudicator was that the system in relation to carparking spaces was unworkable, because there was no valid allocation of carparking spaces and no mechanism available by which a valid allocation could be made. In my opinion that is not correct, although given the difficulties in construing the badly drafted provisions of the 1997 Act, it is understandable that the body corporate and those advising it could arrive at such a view. In my opinion all allocations which occurred under the original by-law, that is all which complied with the requirements of that by-law and which was not invalidated by the 1990 amendments, remain valid.
Where lot owners are continuing to use the carparking spaces originally allocated, in my opinion they have clear and secure right to do so. The same applies to any change effected according to the by-law prior to 1 April 1992. Where lot owners are now using different carparking spaces however that is likely to be because an attempt to reallocate in the past was ineffective, either because the by-law was not followed or because the requirements of the statute were not followed, or because there was a more informal agreement among two or more lot owners for the exchange of carparking spaces. However it is likely that that position can now be regularised by the committee, provided that the relevant lot owners agree; the relevant lot owners can make the appropriate written request and the committee can reallocate the spaces. There will only be a problem if a lot owner who has been using a carparking space other than the one validly allocated will not agree to a reallocation to validate the existing arrangement, but there is no reason why there cannot be a validation within the group of those lot owners who are willing and able to agree to that validation. That may leave some dissenting owners who are not content to have their use of the carparking spaces they have in fact been using validated, and those affected by this attitude, but any dispute about what happens with them could be the subject of some further resolution by an adjudicator.
It follows that it is not necessary in my opinion for there to be any new exclusive use by-law in order to provide some appropriate mechanism for dealing with carparking spaces, at least not in the case of the great majority of the carparking spaces, and perhaps not in the case of any. Future transpositions can take place in accordance with the requirements of what is now By-law 26. The case was not mounted on the basis that it was necessary or appropriate to move from that position to one which would be consistent with the requirements of the 1997 Act, and no attempt was made to show that any opposition to such a step was unreasonable. In my opinion given the background to this matter that has not been shown, since the members of the body corporate had never been told that the issue was whether they should change from one valid scheme to another valid scheme which would fit in with the requirements of the 1997 Act, although the existing scheme had been preserved and would remain valid if the change were not effected.
It follows that I agree with the result arrived at by the adjudicator, although I have come to that conclusion by, perhaps not so much a different route from the adjudicator, as a much longer route than the adjudicator. I think that there was some force in the submission on behalf of the appellant that the adjudicator did not address all of the relevant issues, and in particular appears to have overlooked the question of the validity of allocations under the by-law as a result of the commencement of the 1997 Act. But in my opinion when that question is addressed the outcome is that the allocations are valid, or can probably be readily validated, so there is no such pressing necessity to insert a new exclusive use by-law as was put forward as the justification of the relief sought in the application. The appellant cannot show that, but for the failure to address this issue, another order would have been appropriate. In these circumstances, it is unnecessary for me to consider the other issues raised by the first respondent. The appeal should be dismissed. I confirm the order of the adjudicator. I will hear submissions on the question of costs.
Comment
The 1997 Act has recently been the subject of an extensive review, as a result of which a large number of amendments have been made by the Body Corporate and Community Management and Other Legislation Amendment Act 2003 (Act No 6 of 2003). Much of the review appears to have been concentrated on areas other than those involving the exclusive use by-laws, with which I have been concerned in this judgment. There has been a welcome amendment to s 138 to remove the reference to an authorised allocation; making that section apply to an authorised allocation had the potential to produce some very strange results.
Unfortunately however the various other difficulties with these provisions generally have been left untouched. I think it would be helpful if the legislature gave some attention to the following matters:
(a) Whether there should be a statutory right for owners of lots having exclusive use of particular common property to be able to exchange those rights, or rearrange them among themselves, whether or not there is a provision in the by-law permitting this. Sections 134(1)(b)(ii) and 139(2) suggest that such reallocation agreements are favoured by the legislature, but they are still dependent on there being something in the by-laws to permit such a thing to occur. It would be simpler for the statute to give directly a right for such a thing to occur regardless of the by-laws.
(b) Section 134 needs to be tidied up to overcome the difficulties referred to, which it seems to me make the section far too restrictive.
(c) There needs to be some mechanism to encourage the registration of allocations of common property rights under exclusive use by-laws in a way which will not have the effect of depriving people who have such rights, and have possibly had them for a long time or perhaps paid a lot of money for them, of those rights simply because of some failure on the part of the body corporate or somebody else to take some formal step within the appropriate time limit. In addition, any process which merely involves registering existing allocations should not require a resolution passed without dissent.
(d) It is undesirable to enforce time limits on the registration of matters such as changes to allocations by making an allocation which has taken effect cease to have effect simply because of some failure, probably by someone other than the person who has the benefit of the rights allocated, to take some appropriate step. It would be better if the allocation remained effective but some penalty was imposed on the body corporate, or the committee of the body corporate, for failing to take the appropriate step.
(e) Although persons who have the benefits of rights under exclusive use by-laws should not be deprived of them without their consent, there should be some mechanism for the body corporate to be able to “buy back” such rights, with the consent of the holder, without having to go through the rigmarole required by s 134(2)(b) or (3)(b).
Finally may I record the assistance I have been afforded by the detailed written submissions on behalf of both parties, and by the presentation of relevant material in indexed folders, which was most helpful.
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