Rakaia Pty Ltd v Body Corporate for
[2012] QCATA 43
•30 January 2012
| CITATION: | Rakaia Pty Ltd v Body Corporate for “Inn Cairns” CTS 1610 [2012] QCATA 43 |
| PARTIES: | Rakaia Pty Ltd (Appellant) |
| v | |
| Body Corporate for “Inn Cairns” CTS 1610 (Respondent) |
| APPLICATION NUMBER: | APL123-11 |
| MATTER TYPE: | Appeals |
| HEARING DATE: | On the papers |
| HEARD AT: | Brisbane |
| DECISION OF: | Justice Alan Wilson, President Kenneth Barlow SC, Member |
| DELIVERED ON: | 30 January 2012 |
| DELIVERED AT: | Brisbane |
| ORDERS MADE: | Appeal dismissed. |
| CATCHWORDS: | BODY CORPORATE AND COMMUNITY MANAGEMENT – SCOPE OF BODY CORPORATE COMMITTEE DECISION-MAKING POWER – VALIDITY OF DECISION – Application by lot owner for material change of use – Whether committee had power to decide to give consent of body corporate to application – Whether committee’s decision authorised execution of form of consent Body Corporate and Community Management Act1997, s 100 Crowbray Pty Ltd v Body Corporate for Southbank Chambers [2007] QDC 062, distinguished |
APPEARANCES and REPRESENTATION (if any):
| APPLICANT: | Mahoney Lawyers |
| RESPONDENT: | No appearance |
REASONS FOR DECISION
PRESIDENT
I have had the advantage of reading the Reasons of Mr Barlow SC in draft. I agree with them, and that the appeal in this matter should be dismissed.
MR BARLOW SC – MEMBER
Introduction
This is an appeal, pursuant to s 290 of the Body Corporate and Community Management Act1997, from the decision of an adjudicator in respect of an application made to the Commissioner by the appellant.
Rakaia Pty Ltd is the owner of a number of lots in the Community Titles Scheme known as “Inn Cairns”, for which the Respondent is the body corporate.
On 6 October 2010, the committee of the body corporate made the following decision:
“That the committee approves Lot 36 to make an application to the Cairns Regional Council for material change of use to Lot 36 converting from holiday accommodation to a multiple dwelling unit (i.e. to enable the lot to be used for permanent residence as well as holiday accommodation) insofar as it relates to the exclusive use car park because that car park is on common property.
There will be no change in the use of the car park. It will still be used as a car park and it will still only be used in connection with the occupation of lot 36.”
The decision was made by the circulation to members of the committee of a written motion, which was then approved in writing by a majority of the members of the committee who voted. Therefore, it was made outside a meeting of the committee, pursuant to section 54 of the Body Corporate and Community Management (Accommodation Module) Regulation 2008.
Following the decision of the committee, the seal of the body corporate was applied to a form (known as “IDAS form 1”) indicating the consent of the body corporate to the application for material change of use being made by the owner of lot 36. That application had previously been lodged by the owner with the Council, seeking approval of a change of use of lot 36 from holiday accommodation to a multiple dwelling unit. The effect of such a change of use would be to enable permanent occupation of lot 36 by the owner or by a tenant, rather than merely temporary accommodation for holiday makers.
On 7 October 2010, one member of the committee apparently placed the seal of the body corporate on the IDAS form 1 and signed the form on behalf of the body corporate.
Rakaia contends that those steps were unauthorised because:
a)the decision was beyond the power of the committee because it changes rights, privileges or obligations of the owners of lots included in the community titles scheme and is therefore a restricted issue for the committee pursuant to section 42 of the Body Corporate and Community Management (Accommodation Module) Regulation 2008; and, therefore, because of section 100(2) of the Body Corporate and Community Management Act1997, the committee’s decision is not a decision of the body corporate and only the body corporate in a general meeting could have validly made it;
b)alternatively, even if the decision was valid, it did not authorise the execution of, and the application of the body corporate’s seal to, the form consenting to the application for material change of use.
Rakaia sought declarations that the decision was unlawful, void and of no effect; that it did not authorise the committee or any member of it to execute the IDAS form 1; and, that the execution of that form was ultra vires, void and of no effect. That application was dismissed by the adjudicator.
Rakaia now seeks orders that the adjudicator’s decision be set aside and that those declarations be made by the Tribunal.
Neither the body corporate nor any other person made any submissions in this appeal.
Was the decision within the committee’s power?
Whether the committee’s decision was valid depends on whether it changes rights, privileges or obligations of the owners of lots in the scheme.
Rakaia relied on three authorities in support of its contention that an application for a material change of use that concerns or affects common property is a restricted issue for committees and requires the consent of the lot owners in general meeting.
The first authority relied upon was Surfers International[1]. In that case the applicant sought orders, in effect, requiring the body corporate to consent to his application for material change of use, which involved common property as well as his own units. In dismissing the application, the adjudicator said:
“This consent can only be given by the body corporate in general meeting by ordinary resolution. The giving of consent would be a restricted issue for the committee as it would affect the rights, privileges and obligations of owners.”
[1] [2005] QBCCMCmr 561.
It is not clear from the reasons for the decision how the application would affect the areas of the common property that were for the applicant’s exclusive use. So the basis for the adjudicator’s comment that consent to the application would affect the rights, privileges and obligations of the owners of lots is not apparent and may have depended on the particular facts of the case. In any event, for reasons which I express below, I do not consider that, in this case, any rights, privileges or obligations of owners are affected by the decision.
The second authority relied upon by Rakaia was Waterfront Place – Noosa[2]. The adjudicator in that case dismissed an application for a declaration that a decision of the body corporate in general meeting approving an application for material change of use was invalid because it was an ordinary resolution rather than a resolution without dissent. The applicants contended that, because the occupier of each of the lots in question had exclusive use of an area of common property, the application for material change of use of the lots concerned those areas. The adjudicator decided that that would only be the case if any conditions imposed by the Council concerned the exclusive use areas, rather than the areas of the lots themselves. The decision does not appear to me to be relevant to the facts of this case.
[2] [2006] QBCCMCmr 176.
The third authority was Southbank Chambers[3], affirmed on appeal in Crowbray Pty Ltd v Body Corporate for Southbank Chambers[4]. In that case, the body corporate had, by ordinary resolution, decided to consent to an application for material change of use of one lot which also involved a change of use of the exclusive use area of common property attached to that lot. The applicants contended that the decision had to be made by a resolution without dissent because the consent of all the owners of the common property must be given.
[3] [2006] QBCCMCmr 732.
[4] [2007] QDC 062.
The adjudicator dismissed the application, and Judge Ryrie dismissed the appeal. Her Honour said, at [30]:
“At first blush, the argument proposed by the appellants has some attraction in support of the argument that the body corporate simply cannot pass a resolution (by majority) giving its’ [sic] consent to the use of Lot 1 as a bar and premises. To adopt the position contended for by the appellants however would, in my view, have the effect of leading to a situation that a lot owner in a scheme will rarely, if ever, be able to make a development application (with the necessary consent) with respect to his own lot and its’ [sic] exclusive use area (involving common property) unless he obtains the consent of the body corporate through a resolution without dissent. That in my view would have the effect of allowing one lot owner of the scheme to withhold his or her consent in respect of any other lot owners’ proposed development application involving common property even notwithstanding the majority of the other lot owners in the scheme may well have been in favour of the development going ahead, as indicated by the vote taken at a meeting which had been held by the body corporate for the purpose.”
While I do not, with respect, consider that the reason given by her Honour is sufficient to reach the conclusion she did, the decision does not appear to me to be relevant to this case. In that case, the lot owner was seeking a change of use of the exclusive use area. No such change in the use of the car park for lot 36 is proposed in this case.
It is necessary to keep in mind what the decision actually was, namely, it was to approve the owner of lot 36 making an application to the Council for the Council’s approval of a material change of use of lot 36. Lot 36 is the residential apartment within the scheme. The committee’s decision did not approve a change of use of the lot or of the car park – that was a decision for the Council to make.
The only reason that the body corporate’s approval was required was because lot 36 has a right of exclusive use of lot 36A, which is a car parking spot forming part of the common property. As the lot had such rights attached to it, the Council required the body corporate’s consent to the application for material change of use.
The exclusive use of lot 36 is given by by-law 34 of the scheme, which relevantly provides:
“The proprietor or occupier of each lot in the building will be entitled to the exclusive use for themselves and their licensees of the car park/s numbered the same number as the lot number of which he or she is the proprietor or occupier for the time being as set out in Schedule E ... . Each proprietor or occupier to whom exclusive use of a car park/s is given must use such car park/s for the purpose of car parking only … and must not litter the car park/s or use it to create a nuisance.”
Whether the occupier of a lot is a temporary tenant under a holiday rental, or is the owner residing permanently in it, or is a long-term tenant of the owner, the right to the exclusive use of the car park allocated to that lot does not change. Rather, it is still the right given under by-law 34. Nor do the rights, privileges or obligations of the owners of other lots in the scheme change, whether or not there is a temporary or more long-term occupier of one lot.
Therefore, the decision of the committee to approve the owner of a lot seeking Council’s approval for a material change of use of that lot to allow permanent residence does not affect or change the rights, privileges and obligations of any lot owner. Nor would a decision of the Council authorising a material change of use of lot 36 alter any rights, privileges or obligations of any lot owner associated with the common property.
In the circumstances, the decision was not on a restricted issue, but was a valid decision of the committee.
Did the decision authorise the execution of the IDAS form?
Rakaia’s alternative submission is that, even if the decision was within the committee’s power, it did not authorise a committee member to execute the IDAS form, nor to apply the body corporate’s seal to that form.
Rakaia’s submission on this issue is that the wording of the decision, while “approving” the owner of lot 36 to make an application for material change of use, did not authorise a committee member to sign, and to apply the body corporate’s seal to, the IDAS form, and did not purport to resolve to give consent, as land owner, to the material change of use application.
As to the first of these issues, it is correct to say that the decision did not expressly authorise a committee member to sign an IDAS form, or to apply the body corporate’s seal to such a form. However, it did “approve” the owner of lot 36 making the application, in response to a request from the owner. In that request, the owner informed the committee that, “[f]or the purposes of the application the Council requires that the Body Corporate consent to the making of the application in so far as it relates to the exclusive use carpark because that carpark is on common property”. The owner attached an IDAS form 1 to the request.
In these circumstances, the “approval” of the application clearly encompassed a decision to execute, on behalf of the body corporate, the form required by the Council. To “approve” the application must involve a decision to take the necessary steps to manifest that approval. Otherwise there would no point in making the decision. Indeed, one of the definitions of “approve” in the Macquarie Dictionary is “to confirm or sanction officially”. To do that, it was necessary to execute the form.
It is also necessary to take a common sense, not legalistic, approach to construing the decisions of the committee. The members of the committee may well not be lawyers who might be alert to unintended nuances of the wording of its decisions.
In my opinion, the decision clearly authorised the taking of necessary steps to manifest the committee’s approval, including by executing the IDAS form.
But Rakaia also submits that the adjudicator erred in making the following statement:
“Further, since owners have no rights at all to prevent another owner from making a development application in respect of his or her own lot, then no ‘right of veto’ can suddenly arise in respect of that application by owners exercising any ‘right of veto’ claimed over the area of common property car park.”
Rakaia submits that it this were right,
“it would permit a lot owner to circumvent the need to obtain general meeting approval merely by including in an application for material change of use to their own lot an application to change the use of the common property.”
With respect to both the adjudicator and Rakaia’s solicitors, I do not consider this debate relevant to this case. As I have concluded above, there is to be no change of use to the car park over which the owner of lot 36 has exclusive use. The fact that the Council, for its own purposes (or those of the statute which it is administering), requires that the body corporate give its consent to the lot owner’s application is immaterial.
Conclusion
For these reasons, I consider that:
a)the committee decision was valid; and
b)the decision authorised the execution of the IDAS form.
I therefore consider that the appeal should be dismissed.
0
0
2