Hurley v Body Corporate for Chelsea Coolum Beach
[2011] QCATA 67
•4 April 2011
| CITATION: | Hurley and Anor v Body Corporate for Chelsea Coolum Beach [2011] QCATA 067 |
| PARTIES: | Glen Hurley and Sharon Hurley (Applicants/Appellants) |
| v | |
| Body Corporate for Chelsea Coolum Beach CTS 16544 (Respondent) |
| APPEAL NUMBER: | APL195-10 |
| MATTER TYPE: | Appeals |
| HEARING DATE: | On the papers |
| HEARD AT: | Brisbane |
| DECISION OF: | Justice Alan Wilson, President Kenneth Barlow SC, Member |
| DELIVERED ON: | 4 April 2011 |
| DELIVERED AT: | Brisbane |
ORDERS MADE: | (1) That the second and third declarations and the first and second orders made by the Adjudicator on 28 June 2010 be set aside. |
| (2) That, unless the body corporate resolves otherwise by ordinary resolution in a general meeting, it take steps, as soon as practical, to engage a contractor to install awnings over the entrances to lots 3 and 4 in accordance with the specifications and diagrams referred to in the resolution on motion 10 made at the annual general meeting of the body corporate on 23 February 2010, subject to such amendments to the quotations as might be made by the contractors referred to having regard to the effluxion of time since the date of that resolution. |
| (3) Declare that the body corporate is responsible for maintaining in good condition all of the awnings installed, or to be installed, on the common property outside each lot. |
| CATCHWORDS: | BODY CORPORATE AND COMMUNITY MANAGEMENT – where appeal from order of Adjudicator – where Mr and Mrs Hurley owned Lot 5 in a scheme – where application to Commissioner to resolve a dispute – where Mr and Mrs Hurley are ‘aggrieved’ persons who have a right of appeal from the Adjudicator’s decision – whether committee could validly override decision of body corporate in general meeting – whether Adjudicator had power to ‘deem’ facts contrary to evidence – whether individual owners or body corporate responsible to maintain structures erected on common property – whether body corporate was properly authorised to expend funds on improvements to the common property Body Corporate and Community Management Act 1997, s 289 |
APPEARANCES and REPRESENTATION (if any):
| This matter was heard on the papers in accordance with s 32 of the Queensland Civil and Administrative Tribunal Act 2009. |
REASONS FOR DECISION
President:
I have had the advantage of reading Mr Barlow’s reasons in draft. I agree with them, and the orders he proposes.
Member Kenneth Barlow SC:
Introduction
This is an appeal, pursuant to s 289 of the Body Corporate and Community Management Act 1997 (the ‘BCCM Act’), from an order of an Adjudicator made under Part 9 of Chapter 6 of the BCCM Act concerning the respondent body corporate.
Mr and Mrs Hurley are the owners of lot 5 in the scheme. The scheme comprises 12 lots, for residential purposes, to which the Body Corporate and Community Management (Standard Module) Regulation 2008 applies. The plan for the scheme was originally a building units plan. It is therefore taken to be a building format plan of subdivision under the Land Title Act 1994, by reason of s 331 of the BCCM Act.
This appeal is from the decision of an Adjudicator made on 28 June 2010. The decision arose from an application to the Commissioner to resolve a dispute, pursuant to s 239. The application was made on 24 April 2009 by the owner of lot 3, Mrs Buth. Mr and Mrs Hurley were not parties to the application although, as interested lot owners, they made a submission supporting Mrs Buth. Their interests have been adversely affected by the Adjudicator’s orders. I am satisfied that they are ‘aggrieved persons’ who have a right of appeal, on a question of law, from the Adjudicator’s decision.
The application before the Adjudicator
The history of the application is unclear, even from the Commissioner’s file. It appears that originally Mrs Buth was seeking an order that an awning be erected by the body corporate, over the area outside her front door. Her application was on the basis that all lots other than lots 3, 4 and 12 had had awnings erected outside their front doors by the body corporate over the previous few years, but the body corporate had declined to erect awnings over lots 3 and 4. She complained that she was being discriminated against by the body corporate.
The application was amended on 7 July 2009 to seek, instead, an order overturning motion 10 of the annual general meeting of the body corporate held on 4 February 2009. It appears that that was the annual general meeting at which it was determined that no awnings would be installed over lots 3 and 4, although the minutes of that meeting do not appear to have been provided to the Adjudicator and are not before the Tribunal in this appeal. That is of no consequence because, as events developed, that resolution became irrelevant to the application.
During the course of the application, its nature changed again, as a result of further developments between Mrs Buth and the body corporate. On 23 February 2010, it was resolved by the body corporate in general meeting, by ordinary resolution, that the body corporate engage a contractor to install awnings over the entrances to lots 3 and 4 in accordance with certain specifications, diagrams and quotations. It appears that the awnings referred to were likely to be satisfactory to Mrs Buth. However, on 22 March 2010 the committee of the body corporate purported to resolve that the resolution of the body corporate to install the awnings be overturned, and that some laser light sheeting be installed on an existing pergola structure outside each of lots 3 and 4. Following those events, the application for adjudication appears to have morphed into an application to overturn the committee’s decision and, in effect, to reinstate the decision of the body corporate in general meeting made on 23 February 2010.
In the meantime, on 10 February 2010 the Commissioner wrote to the body corporate on behalf of the Adjudicator, stating that the Adjudicator considered that it may be necessary to make an order regarding whether the body corporate should be required to pay for awnings for lots 3 and 4 given that it had paid for awnings for the remaining lots apart from lot 12. Alternatively, he said, given that lots 3, 4 and 12 had not benefited from the expenditure to date on awnings, the Adjudicator was considering whether it was unreasonable to expect all owners to contribute to the expenditure, whether to make a declaration that the spending of body corporate funds on awnings for individual lots was unreasonable, and whether he should make an order requiring all owners who had benefited from the installation of awnings to reimburse the body corporate for the individual cost of their awnings. He sought information and submissions from all owners upon these matters. He reiterated that request by a letter from the Commissioner of 18 May 2010.
On 11 June 2010, having received some submissions about the matters raised in the earlier letters, the Commissioner wrote again to the body corporate on behalf of the Adjudicator. Relevantly the letter said that the Adjudicator was concerned about a misuse of body corporate funds for the benefit of individual owners in installing awnings outside the front doors of 9 of the 12 lots. The Adjudicator expressed the opinion that the cost of the awnings was obviously excessive, in comparison with the cost of normal door maintenance, and the body corporate had not explained why awnings had been installed only for some doors. He also said that the argument that there was a benefit to all owners by reducing the weathering of doors appeared disingenuous and unreasonable. He commented that reference had been made to increased safety, but no evidence had been provided of reduced insurance premiums from which all owners might benefit. The letter stated that the Adjudicator had a provisional view that each of the awnings was effectively an individual improvement for the benefit of the individual lot in question, rather than an improvement to common property for the benefit of occupiers generally. The letter stated that the Adjudicator was likely to make the orders which ultimately he did make and sought submissions from all lot owners in that respect.
Having received further submissions, the Adjudicator made the following orders (numbers added):
1.I hereby declare that the committee resolution of 22 March 2010 that purported to overturn motion 10 of the annual general meeting of 23 February 2010 and purported to authorise the installation of laser light sheeting rather than awnings adjacent to lots 3 and 4 is, and was at all times, void.
2.I further declare that the owners of lot 3 and 4 are authorised to, at their own cost, install an awning of the type authorised by motion 10 of the annual general meeting of 23 February 2010. This authorisation is subject to the installation not contravening any fire or other regulations. Further, if installed, the owners must maintain their own awning at their own cost.
3.I further declare that each awning already authorised and installed by the body corporate is deemed to be authorised as an improvement to the common property for the benefit of the individual owner’s lots and must be maintained by the owner in question.
4.I further order that, prior to the next annual general meeting, each current owner of a lot with an awning already installed at the body corporate’s cost must reimburse the body corporate for this cost.
5.I further order that the body corporate add all reimbursed amounts to its administrative fund, adopt new budgets that do not allocate funds for maintenance of awnings of individual owners, and reduce its required levies for the next financial year accordingly.
6.I further order that the body corporate remove the laser light sheeting adjacent to lots 3 and 4.
Grounds of appeal
Under s 289 of the Act, an aggrieved person may appeal to this Tribunal from an order of an Adjudicator, but only on a question of law.
Where an appeal to a tribunal is only permitted on a question of law, the tribunal must be satisfied that the question that is the subject of the appeal is one of law.[1]
[1]Yates Property Corp Pty Ltd (in Liq) v Darling Harbour Authority (1991) 24 NSWLR 156.
In their application, Mr and Mrs Hurley did not expressly state the errors of law which they assert have been made by the Adjudicator. Rather, they tended to address the findings of fact made by the Adjudicator and contended that the order requiring that they repay the body corporate imposed a harsh and unfair penalty on them and transferred to them the responsibility and costs for maintaining the awning outside their lot when it had previously been the responsibility of the body corporate. They also noted that, while they made an initial submission about Mrs Buth’s application in May 2009, at which time they believed that the dispute lodged with the Commissioner was whether the owners of lots 3 and 4 had been discriminated against, they were not aware that the ‘purpose’ of their own awning was an issue. It appears (although they have not expressly stated) that they had not received copies of the Commissioner’s letters setting out the Adjudicator’s views and seeking further submissions during the course of 2010. This is possible, as they live interstate and apparently have at times lived overseas.
Notwithstanding that the application does not expressly set out the errors of law upon which the appeal is based, for reasons which I discuss below I consider that the Adjudicator has made a number of errors of law which infect his decision and the orders which he has made. I consider that the decision of the Adjudicator should be set aside and substituted by a different decision.
Orders necessary to resolve dispute
Section 276 of the BCCM Act relevantly provides that an Adjudicator to whom an application is referred may make an order that is just and equitable in the circumstances (including a declaratory order) to resolve a dispute, in the context of a community title scheme, 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. The orders which an Adjudicator can make are set out in greater detail in schedule 5.
The dispute that was referred to the Adjudicator in this case was a dispute between the owner of lot 3 and the body corporate. As the dispute changed, from the filing of the application with the Commissioner, it became a dispute over the purported resolution of the committee of the body corporate, made on 22 March 2010, to vary or overturn the resolution of the body corporate in its general meeting held on 23 February 2010. That was the limit of the dispute before the Adjudicator.
The first of the Adjudicator’s orders deals with that dispute. In my opinion, he made no error in declaring that the committee’s resolution was invalid. As he pointed out, s 95 of the Standard Module provides that, once a resolution has been passed, it may be amended or revoked only by a resolution of the same type. The committee had no power to overturn the resolution that had been passed by the body corporate in its general meeting.
The effect of the Adjudicator’s first order was to leave the resolution of the body corporate in place. It would then be the duty of the committee to carry out that resolution. The last order made by the Adjudicator is consequential upon the first order and was appropriately made. Out of an abundance of caution, the Adjudicator may also have ordered the body corporate to cause the works referred to in the resolution to be undertaken. Orders to these effects would have resolved the dispute that was before the Adjudicator.
Other orders unnecessary or beyond power
The same cannot be said of the other orders and declarations made by the Adjudicator.
Instead of limiting his orders to those which were just and equitable in the circumstances to resolve the dispute, the Adjudicator has gone further. It was not contended by any person who made submissions to him, nor is it contended in this appeal, that the resolutions of the body corporate made in 2004 and 2006 to have works undertaken to install awnings over each of the lots other than lots 3, 4 and 12, were invalid. Nor was it or is it contended that the awnings are not on and do not form part of the common property of the body corporate.
Notwithstanding that, the Adjudicator has decided that the resolutions were invalid and that money spent by the body corporate in accordance with them was improperly spent. He has then gone even further and, without reference to the relevant sections of the Act or the Standard Module, has purported to deem that work, that was in fact carried out pursuant to a resolution made (and not challenged) by the body corporate, was undertaken by the body corporate at the request, and for the benefit, of individual lot owners and ought be paid for by them.
In my opinion, the Adjudicator did not have power to make the third, fourth and fifth declaration and orders made by him. The second declaration is consequential upon those orders and also should not have been made. In any event, even if the Adjudicator had power to make those declarations and orders, they are wrong in law for the reasons discussed below.
Maintenance
Section 159 of the Standard Module relevantly provides that a body corporate must maintain common property in good condition. Also, where lots are created under a building format plan (as in this case), the body corporate must maintain in a good and structurally sound condition roofing membranes and roofing structures that are not common property but that provide protection for lots or common property. It is not responsible for maintaining fixtures or fittings installed by an occupier of a lot if they were installed for the occupier’s benefit.
The awnings with which the Adjudicator was concerned are on, and form part of, the common property. They were not installed by the occupiers of the lots. Even if they were not common property, they would appear to be roofing structures, including roofing membranes, that provide protection for lots or common property (or both). In either case, it is the responsibility of the body corporate to maintain them.
Therefore, the Adjudicator has erred in law in concluding that the individual lot owners, and not the body corporate, are responsible for the maintenance of the awnings erected outside their respective lots.
Resolutions to make improvements
Section 163 of the Standard Module relevantly provides that the body corporate may make improvements to the common property if the improvements are authorised by ordinary resolution and the cost of the improvements or, if the improvements together with associated improvements form a single project for improvement of the common property, the cost of the entire project, is within the ordinary resolution improvement range for the scheme. The ordinary resolution improvement range means an amount that is not more than the amount worked out by multiplying $2,000 by the number of lots included in the scheme.
In other words, in this scheme the body corporate may make improvements to the common property if the improvements are authorised by ordinary resolution and the cost of the entire project concerning the improvements is no more than $24,000. If the cost were greater than that sum, then a special resolution would be required to authorise the improvements.
The evidence before the Adjudicator was that, in 2004, there had been discussion about the installation of some sort of protection over the front doors of the lots in the complex. Apparently, the committee at the time was concerned that the front doors of lots in the complex, which the body corporate was liable to maintain, were being adversely affected by weather. The committee also considered that the area of concrete outside the upper lots was a slip hazard.
At a general meeting on 21 March 2006, the body corporate resolved by ordinary resolution that awnings be installed over the front entrances of lots 1, 2, 6, 7 and 8. Those awnings were installed later in 2006.
At a general meeting on 6 July 2007, the body corporate resolved by ordinary resolution that awnings be installed over the front entrances of lots 5, 9, 10 and 11. Those awnings were installed later in 2007.
Neither of those resolutions was challenged in the dispute before the Adjudicator. Nor was there evidence that the cost of the improvements which the body corporate resolved to make on either occasion, or combined, was in excess of $24,000. In those circumstances, there is no evidence that the resolutions were not validly made. In determining otherwise, the Adjudicator has erred in law.
Improvements not by lot owners
The Adjudicator purported to ‘deem’ that the improvements represented by the awnings had been sought by the owners of each individual lot and had been made by those owners with the body corporate’s consent. In doing so, he appears to have been attempting to fit the facts within s 164 of the Standard Module.
Section 164 relevantly provides that the body corporate may, if asked by an owner of a lot, authorise the owner to make an improvement to the common property for the benefit of the owner’s lot. The improvement must be authorised by ordinary resolution and an owner who is given an authority under that section must maintain the improvement in good condition, unless excused by the body corporate.
The Adjudicator’s second and third declarations depend on a particular fact: namely, that the awnings were (or are to be) installed over the individual lots by lot owners pursuant to requests made by them under that section. That ‘fact’ is clearly contrary to the evidence that the awnings were installed by the body corporate as improvements authorised by ordinary resolutions in general meetings. The Adjudicator had no power to ‘deem’ that the awnings were installed other than in accordance with the evidence before him and the undisputed facts. He therefore made an error of law in making the declarations to that effect and the other consequential orders.
Conclusions
In my opinion, the appeal ought be allowed. The second and third declarations, and the first and second orders made by the Adjudicator ought be set aside. An order ought be made that, unless the body corporate resolves otherwise by ordinary resolution in a general meeting, it take steps, as soon as practical, to engage one of the contractors referred to in resolution number 10 made at the annual general meeting of the body corporate held on 23 February 2010, to install awnings over the entrances to lots 3 and 4 in accordance with the specifications, diagrams and quotations referred to in the minutes of that meeting, or in accordance with such new quotations as are obtained (having regard to the period that has passed since the resolution was made).
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