The Body Corporate for No 9 Port Douglas Road v McEvoy
[2012] QCATA 114
•3 July 2012
| CITATION: | The Body Corporate for No 9 Port Douglas Road v McEvoy and Anor [2012] QCATA 114 |
| PARTIES: | The Body Corporate for No 9 Port Douglas Road (Applicant/Appellant) |
| v | |
| Michael McEvoy (First Respondent) Christine McEvoy (Second Respondent) |
| APPLICATION NUMBER: | APL199-11 |
| MATTER TYPE: | Appeals |
| HEARING DATE: | On the papers |
| HEARD AT: | Brisbane |
| DECISION OF: | J A Jerrard, QC, Member |
| DELIVERED ON: | 3 July 2012 |
DELIVERED AT: Brisbane
ORDERS MADE: | 1. The appeal is allowed; 2. The orders made 22 March 2011 by R Miskinis, Adjudicator under part nine of Chapter 6 of Body Corporate and Community Management Act 1997 are set aside; 3. The application dated 6 August 2010 made by Michael and Christina McEvoy, the owners of Lot 16 on scheme 2438 reference number 0750-2010, is dismissed. |
| CATCHWORDS: | APPEAL – ERROR OF LAW – BODY CORPORATE DISPUTE – where Respondent sought exclusive use of a portion of common property – whether rectification appropriate – need for certainty of missing term Body Corporate and Community Management Act 1997, s 276 Burrell v Body Corporate for Boulevard North [2010] QDC 352 |
APPEARANCES and REPRESENTATION (if any):
This matter was heard and determined on the papers pursuant to s 32 of Queensland Civil and Administrative Tribunal Act 2009 (QCAT Act).
REASONS FOR DECISION
This is an appeal raising a question of law, namely whether an Adjudicator’s decision dated 27 March 2011 contained an error in law. The parties are the appellant Body Corporate for No 9 Port Douglas Road and the respondents are Mr Michael McEvoy and Mrs Christine McEvoy, the proprietor of Lot 16 at No 9. They had filed an application dated 6 August 2010, asking for an adjudication order to be made in their favour under the Body Corporate and Community Management Act 1997 (“the BCCM Act”). What they wanted was an order amending the Community Management Statement for No 9 Port Douglas Road, and giving them exclusive use of an area adjacent to their unit, No 16.
On 28 February 2011, the McEvoys were told by letter that an Adjudicator had been appointed to determine their dispute with the Body Corporate, this being done after the McEvoys and all other Lot owners, and the Committee of the Body Corporate, were invited to make submissions on the dispute. They all did so, and the Adjudicator found for the McEvoys, ordering the Body Corporate to register a New Community Management Statement stating that the proprietor of Lot 16 is entitled,
“to the exclusive use of the sun deck and common property adjacent to Lot 16. This will also involve the attachment of a plan clearly identifying the area of common property to which Lot 16 is entitled to exclusive use”.
A copy of a contract of sale dated 12 May 1998 was put before the Adjudicator, and it contained a number of handwritten entries, inserted on the prepared form approved by the Real Estate Institute Queensland Limited and the Queensland Law Society Incorporated, as being suitable for the sale and purchase of home units and townhouses in Queensland. That pre-typed form was clearly drafted on the assumption that purchasers and vendors would agree on a Lot description of a unit to be purchased, and that the purchaser would obtain exclusive use of a specified car park, as indicated on a plan in annexure “C” to the contract form. In the agreement entered into between Famestock Pty Lid as buyer and Blue Raven Pty Ltd as vendor, the contract provided, by a handwritten addition, not that a nominated car park would be available for the exclusive use of the buyer, but that the buyer would obtain the exclusive use of “adjacent roof area” to Lot 16, rather than, (as suggested by the form), a car park.
The material placed before the Adjudicator did not include a copy of the annexure “C” apparently attached to the contract dated 12 May 1998. What was provided to the Adjudicator was a letter, dated 24 September 1998, written by a Mr Loane, a director of Blue Raven Pty Ltd, and addressed to Complete Body Corporate Services, (the trading name for an entity then managing the building at 9 Port Douglas Road). That letter advised that,
“exclusive use is hereby granted to Famestock Pty Ltd [the proprietor of Lot 16] for the sundeck and common area outside and attached to this unit. We enclose a copy of the plan highlighting the area that is to be made exclusive to this Lot. We would ask that this Exclusive Use be permanent and for you to notify the Body Corporate Records accordingly.”
This letter was placed before the Adjudicator, as is apparent from the contents of the Adjudicator’s statement of reasons, and from the affidavit from Mr Richard Sheers, the Secretary of the body corporate for No 9 Port Douglas Road, in Exhibit E to his affidavit, that exhibit being a copy of the material provided to the body corporate by the officer of the Commissioner for Body Corporate Community Management.
It does not appear that the Adjudicator was provided with the response made at that time by Complete Body Corporate Services to the letter from Blue Raven Pty Ltd, a copy of which was supplied to this Tribunal on Friday 15 July 2011, by the respondents. That letter, (annexure “F” at page numbered 12 of the respondents’ documents supplied on that date to this Tribunal) referred by date to the letter from Blue Raven Pty Ltd dated 24 September 1998, and continued:
“I advise that exclusive use area allocation must be granted at a properly convened general meeting of the Body Corporate. Therefore the exclusive use area required for Lot 16 cannot be granted at this stage. I will hold this request on file and word a suitable motion and include same at the next general meeting, which should be held no later than December 1998”.
There is no suggestion by any party that the then body corporate manager was in any way inaccurate in its advice that exclusive use area allocation had to be granted at a properly convened general meeting of the body corporate. The documents the respondents submitted to this Tribunal on 15 July 2011 include a copy of a floor plan on which appears in handwriting the words “plan ‘C’”, but the photocopied “plan ‘C’” is difficult to read, and contains no obviously highlighted area.
On 17 April 1998 a document headed “New Community Management Statement” had been filed with the Department of Natural Resources by the body corporate for No 9 Port Douglas Road. The by-laws in Schedule C to that document included by-law 43, which then read:
“The proprietor for the time being of each Lot in the building shall be entitled to the exclusive use of himself and his licensees of the car space as stipulated in Schedule E, as identified on the attached plan marked ‘A’”.
Schedule E contained the unsurprising description that each Lot, as numbered, was entitled to the exclusive use of a correspondingly numbered car park, and that list of Lots 1-18 included Lot 16, entitling the owners of that Lot to the exclusive use of car park numbered 16. On 18 January 1999 a request was made by the body corporate for number 9 Port Douglas Road for a new New Community Statement to be recorded as a Community Management Statement for number 9 Port Douglas Road Community Titles Scheme 24368, and advised that changes has been made to Schedule C, with by-law number 42 being deleted. The proposed New Community Management Statement was placed before the Adjudicator, as demonstrated by the Adjudicator’s reasons and the affidavit of Mr Sheer. In that proposed amended Statement, the Clause originally numbered 42 had been deleted and replaced by the contents of what was previously Clause 43, now renumbered as 42. A new Clause 43 was proposed, which was headed “Exclusive Use-Lot 16”. The body of the clause read:
“The proprietor for the time being shall be entitled to the exclusive use for himself and his licensees of the sundeck and common area outside and attached to his unit, as identified on the attached plan marked ‘C’”.
[10] It appears that no plan marked ‘C’ was placed before the Department of Natural Resources, or if it was, it did not comply with the Department’s requirements. This is demonstrated by a letter (part of exhibit “E” to Mr Sheers’ affidavit) from the Department of Natural Resources to Complete Body Corporate Services Pty Ltd, advising of defects in the documents lodged with the Department by Complete Body Corporate Services Pty Ltd, including that “exclusive use plan marked ‘C’ did not comply with the registrars requirements for plans” and that “unless these items are complied with by the above rejection date, rejection may follow.” The nominated rejection date was 4 March 1999.
[11] On 17 March 1999 the Department wrote to Complete Body Corporate Services Pty Ltd, advising that pursuant to s 157(1) of the Land Title Act 1994, the New Community Management Statement had been rejected because a requisition thereon, on a document on which the above document was dependant for the purposes of registration, had not been complied with within the time specified.
[12] The next step in the chronology appeared to have happened on 7 May 2001, when the then chairman of the body corporate for number 9 Port Douglas Road wrote to the respondents, then trading as Metro Inns, about a number of matters, and writing:
“Your comment in relation to the roof area as exclusive use is a matter that should have been addressed by Complete Body Corporate Services Pty Ltd/Blue Raven and yourselves. Apparently documents were lodged with the Department of Natural Resources and requisitioned by them because of incorrect documentation lodged (proper plans should have been done). This was not corrected within the time allowed and therefore lodgement lapsed. I agree that you should have been told at that time which was March 1999, but we are unable to shed any light on why this was not done.”
[13] It appears that by that date the present respondents, who were at all relevant times the Directors of Famestock Pty Ltd, and for some years in control of the management rights to the building, had become the owners of Lot 16 rather than Famestock Pty Ltd. The date and terms of their contract are not in evidence. The respondents’ material, filed with this Tribunal and the Office of the Commissioner for Body Corporate Community Management, do not contain any suggestion that the respondents as purchasers from Famestock Pty Ltd were in any way mislead, when they became the owners of Lot 16, obtained by them from their own company.
[14] Thereafter, nothing seemed to have happened until 3 August 2010, when the respondents applied under the BCCM Act as owners to,
“have the decision to allow unit 16 to have exclusive use which was given by the developer to us, and confirmed at the first AGM of the building, affirmed and recorded in a new CMS.”
[15] The reference to confirmation at the first AGM is apparently a reference to motion number 9, appearing as a special resolution in the minutes of the Annual General Meeting of the owners of “No. 9 Port Douglas Road” CTS 106455, held on 12 January 1999, wherein it recorded there were ten votes in favour and none against a special resolution, which read:
“resolved that by-law 42 as per the attached be deleted, and the owner of Lot 16 be granted exclusive use for himself and his licensees of the sundeck and common area outside and attached to his unit, as identified as attached, and a new Community Management Statement be lodged with the Department of Natural Resources noting the deletion”.
[16] Curiously, those minutes record that a total of eleven Lots were present either in person or by proxy (Lots 2, 3, 4, 5, 6, 8, 9, 10, 11, 12 and 13), but throughout only ten votes were cast in favour of each recorded resolution and nil against, with no abstentions. The adjudicator considered the evidence of those minutes, and compared it with the terms of the voting paper supplied to Lot owners prior to that AGM, by letters from Complete Body Corporate Services Pty Ltd on 18 December 1998, which included as the last proposed motion, motion 9, which read:
“This motion requires a special resolution.
That by-law 42 as per the attached be deleted and a new Community Management Statement be lodged with the Department of Natural Resources noting the deletion.”
The adjudicator concluded that,
“having regard to the wording of the voting paper, I cannot be satisfied that at the AGM held on 12 January 1999, the Body Corporate resolved by way of a resolution passed without dissent, to grant to the owner of Lot 16, exclusive use of common property adjacent to Lot 16.”
[17] That finding is central to the case that the appellant makes in this appeal. The respondents have not challenged it. Instead, their written submission, filed in the tribunal by their solicitor, simply quotes the minutes of the AGM of 12 January 1999, and the resolution recorded therein, without acknowledging the Adjudicator’s finding, or its significance. It might be said that the Adjudicator likewise failed to appreciate the significance of that finding. The Adjudicator had heard submissions received from all owners, pursuant to s 243 of the BCCM Act, and those submissions had directed the Adjudicator to the difference between the terms of the voting paper for the AGM held on 12 January 1999, and the purportedly amended Community Management Statement dated 18 January 1999. Having concluded that it was not possible to be satisfied that the AGM of 12 January 1999 had resolved by way of resolution without dissent to grant to the owner of Lot 16 the exclusive use of the common property adjacent to Lot 16, the Adjudicator went on to find that the circumstances of the case indicated that on a balance of probability, the intention of the original owner was to grant exclusive use over the common property adjacent to Lot 16. The Adjudicator also concluded that:
“Due to errors made at that time, a new Community Management Statement recording the grant of exclusive use was not registered within the prescribed timeframe”.
[18] Citing the obiter remarks of McGill DCJ, SC, in Burrell v Body Corporate for Boulevard North[1], and referring to Pukallus v Cameron[2], the Adjudicator concluded it was just and equitable for the Adjudicator to make an order for rectification, requiring the Body Corporate to register a new Community Management Statement, stating that the proprietor of Lot 16 was entitled to exclusive use of the sundeck and common property area adjacent to Lot 16. The Adjudicator continued,
“This will also involve the attachment of a plan clearly identifying the area of common property to which Lot 16 is entitled to exclusive use.”
[1] [2010] QDC 352.
[2] [1982] 56 ALJR 907.
[19] The appellant in this matter makes a number of points about those conclusions of the Adjudicator. First, the evidence before the Adjudicator did not establish that any plan had been submitted at any time to any relevant person, (such as the Body Corporate, or the department administering the BCCM Act), delineating and clearly identifying the area in respect of which Lot 16 was to have exclusive use. Even now, that has not been done. The respondents, in reply to the appellant’s complaint that there was an error in making that order by the Adjudicator, because there were no plans to rely on, only say in their submission to this tribunal that,
“the (appellant) should revert to the building unit plan which are kept with the Body Corporate records otherwise if this to too difficult, the respondents may provide these to the (appellants)”.
[20] The appellant also makes the point that an order for the rectification of a document (Community Management Scheme) in this matter is a curious one, because the respondents and the present appellant were not parties to the original contact of sale between Famestock Pty Ltd and Blue Raven Pty Ltd, and there is no suggestion in the evidence that the contract between those two original contracting parties was in need of rectification. That is, the respondents’ evidence, filed before the Adjudicator and in this tribunal, established that the contract dated 13 May 1998 included the term agreed between the parties, namely that the purchasers of Lot 16 were to get the exclusive use “of adjacent roof area”.
[21] There was no material put before the Adjudicator, or in this appeal, capable of showing that either the parties to the original contract, or the (different) parties to this appeal, had ever agreed on either the size, or the boundaries, of the area of common property, of which the owners of Lot 16 were to have exclusive use. The only reference to the size of the area is in the respondents’ adjudication application, at section nine on page four thereof, where the respondents wrote that Famestock Pty Ltd,
“purchased Unit 16 from the developer in 1998 for $460,000 on the condition that the adjoining 200sq metre area adjoining was granted exclusive use to Unit 16 permanently”.
[22] No plan was attached to that application. However, the respondents did supply, by letter dated 5 November 2010, to the Commissioner, Body Corporate and Community Management, a copy of a thirteen page fax the respondents had received on 27 October 2010 from the Department of Environment and Resource Management. That faxed material included the proposed amended New Community Management Statement, executed “18 January 1999” and a plan marked “Plan ‘C’”. That plan was presumably lodged with the Department of Natural Resources in January 1999, and was to be read with, and explain, the proposed by-law 43, with the reference therein to the proprietor of Lot 16 being entitled,
“to the exclusive use…of the sundeck and common area outside and attached to (his) unit, as identified on the attached plan marked ‘C’”.
[23] The proposed by-law does not describe the size of the area to be exclusively used, and the faxed photocopy had no helpful markings. The respondents stated to the Commissioner, in their letter dated 5 November 2010, that,
“the area marked ‘C’ is the 200sq metres adjoining Lot 16. I am not sure it is correctly “marked” but….this area is the “most probable” area as it is the only area on the plan marked ‘C’…”
[24] That statement reveals two problems for the respondents. First, no marking ‘C’ is evident on the attached plan, and second, the respondents were – as at 5 November 2010 – unsure of the actual location of the area over which they asked for exclusive use.
[25] This uncertainty is crucial to their claim – if made – for an order for rectification. In Pukallus v Cameron[3], the parties had contracted, in September 1975, for the sale – by description – of subdivision 1 of portion 1154, an area containing 1,910 acres. The vendor believed, and told the purchaser, that an area seen on a ride across the subject land, of 27 acres of cultivation and a bore, was within sub-division 1. At that time, the area lay to the north of the boundary fence between subdivision 1 (the northern subdivision) and subdivision 2. Both the vendor and purchaser accepted that the boundary fence was in an incorrect position, and the vendor agreed to erect a boundary fence on the correct boundary line. In fact, a survey done after the conveyance was executed showed that the boundary ran north of the cultivation and the bore.
[3] [1982] 56 ALJR 907.
[26] The purchaser sought rectification of the contract, and the trial Judge found for the purchaser, finding that both parties had intended that the bore and the 27 acres were to be included in the property sold. The learned trial Judge ordered that the written contract be rectified,
“by omitting from the description of the property the reference to the area and by including in the description all that land south of the boundary between subdivision one and two of portion 1154 which lies north of a line drawn parallel to it across subdivision two passing through the southernmost portion of the 27 acres of agricultural land mentioned in the Statement of Claim”.
[27] That order appeared to do justice, but the vendor succeeded on appeal to the Full Court, and, the High Court upheld the Full Court’s reversal of the trial Judge. Wilson J wrote that two matters had to be established, for rectification to be ordered.[4] The first was that there must be an intention, common to both parties at the time of contract, to include in their bargain a term which by mutual mistake was omitted therefore. The second was a requirement that a plaintiff advance “convincing proof” that the written contract did not embody the final intention of the parties. He wrote that “the omitted ingredient must be capable of such proof in clear and precise terms”.[5]
[4] Pukallus v Cameron [1982] 56 ALJR 907, at 909 per Wilson J.
[5] Ibid.
[28] He held that while a new southern boundary was contemplated by the parties, the purchaser could not prove the precise term agreed between two parties, and to be inserted in the contract.[6]
[6] Ibid.
[29] Gibbs CJ wrote that,
“…the parties had no common intention as to where the boundary line of the land sold should go to ensure that the bore and cultivated land were included within it if it was not the southern boundary line of subdivision 1.”[7]
[7] Ibid, at 907 per Gibbs CJ.
[30] Brennan J wrote,
“…rectification…..to include a parcel of land lying outside subdivision 1 could not be decreed merely on proof that the parties mistakenly believed the bore and cultivation lay within the boundaries of subdivision 1”. He also wrote that “rectification could be decreed only upon proof that the parties intended that a further parcel of land, precisely identified, was to be included in the sale”.[8]
[8] Ibid, at 911 per Brennan J.
[31] Those three judgements identify an error of law in the judgement under appeal. The Adjudicator – and this tribunal – received no evidence identifying either the precise boundaries of, or the actual area, over which Famestock Pty Ltd, or the respondents, were to have exclusive use. No specific place or specific area was agreed between the contracting parties. The appellant was not found to have agreed to do anything.
[32] It follows that the Adjudicator’s orders cannot be substantiated, on the basis on which they were made, namely in reliance on the obiter in Burrell[9] as to the availability of rectification as an equitable remedy in their circumstances. While I agree with the statement by McGill SC, DCJ as to scope of rectification, the clarity of proof as to the missing term, required by the High Court, was not established here.
[9] Burrell v Body Corporate for Boulevard North [2010] QDC 352.
[33] The Adjudicator’s task, under s 276 of the BCCM Act, was to make orders that were just and equitable in the circumstances. The circumstances established in this matter reveal an unexplained delay (since at least 7 May 2001) by the respondents, who are described as the directors (at all relevant times) of Famestock Pty td. The adjudicator’s reasons record that a number of current unit owners who opposed the respondents’ application, had bought their units in the belief that the area – whatever it’s size – asked for by the respondents was in fact the common property of all Lot owners. In those circumstances, for it to be just and equitable to order that exclusive use of a portion of the common property be given to the owner of Lot 16, an explanation had to be given for a decade of delay. None was offered, so for that reason also, the order under appeal cannot be upheld.
[34] The appeal is allowed, and I order as set out in proposed orders 2 and 3 of part D of the appeal filed herein on 7 June 2011, namely:
The orders made 22 March 2011 by R Miskinis, Adjudicator under part nine of Chapter 6 of Body Corporate and Community Management Act 1997 are set aside.
The application dated 6 August 2010 made by Michael and Christina McEvoy, the owners of Lot 16 on scheme 2438 reference number 0750-2010 is dismissed.
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