Mark Richard Kaucic as trustee for Melton Investments No 1 Trust (affected person)

Body Corporate and Community Management Act 1997 (Qld) (Act), sections 227(1)(b) and 229(3)(a)

Body Corporate and Community Management (Commercial Module) Regulation 2020 (Commercial Module)

DISPOSITION OF COMMON PROPERTY; BY-LAWS; NUISANCE - where the respondent is using part of the common property for outdoor dining; whether the respondent is unlawfully excluding others from using the area, causing an obstruction of the common property contrary to the by-laws, or causing a nuisance/unreasonable interference contrary to the Act.

Act, ss 35(1)&(4), 62(2)&(3)(a), 94(1)(a), 167; Commercial Module, s 131(2).

1. The respondent must remove its tables and chairs from the area of common property marked on Survey Plan 126519 as a "verandah" and keep them away.
2. The application is otherwise dismissed.

• [1] The respondent operates a restaurant from lot 6, owned by the affected party Mr Kaucic, and uses a nearby area of common property for alfresco dining. The area is enclosed with an awning over a fixed metal frame and has fixed bench seating and moveable tables and chairs. The body corporate says the awning and bench seating were installed in 2014.
• [2] A licence to occupy the area was executed by a member of the body corporate committee and then owner of lot 6, Laila Hachem, on 18 September 2014, but the body corporate says:
  1. the licence was not authorised by resolution without dissent as required, and
  2. Ms Hachem no longer owns lot 6 and the licence could not be assigned to the present owner without the licensor's consent.
• [3] The body corporate also accuses the respondent of placing tables and chairs in a thoroughfare that separates lot 6 and the disputed area of common property, impeding:

... access and pedestrian flow for other shops and facilities within the complex, including the Chinese Restaurant, the beauty salon, the podiatry practice, Chemist Warehouse, and the restrooms.

• [4] The body corporate says the respondent's use of the area is unauthorised, an obstruction of the common property contrary to by-law 3, and a nuisance or unreasonable interference with the use of common property contrary to section 167 of the Act. It seeks orders in the following terms:

1. cease exclusively using, and obstructing others from using, that part of the common property that is the forecourt in front of Lot 6 and used as a dining area; and
2. remove all of its improvements installed to that part of the common property that is the forecourt in front of Lot 6 and used as a dining area, including the bench seating and the awning, repair any damage, and reinstate the area to its original condition; and
3. remove and keep removed all tables and chairs installed or placed on the common property walkway immediately outside Lot 6.

• [5] The lot owners own the common property as tenants in common.[1] They are entitled to use it, though may not exclude their co-tenants from possession unless they have lawfully been granted some exclusive right to it (such as via an exclusive use by-law, licence, lease, sale, or other disposal).[2] Where a lot is let, the occupier enjoys the owner's rights to the common property.[3]
• [6] Mr Kaucic claims to have a licence to use the disputed area of common property, originally executed in 2014 and assigned by each subsequent owner of lot 6 to their successor. But the body corporate can only grant a lease or licence over part of the common property for more than ten years if authorised by resolution without dissent.[4] Mr Kaucic claims a resolution without dissent was passed before the licence was granted to Ms Hachem in 2014, but did not submit a copy of it.
• [7] At my request, the body corporate submitted all minutes for 2013 and 2014. None recorded a resolution without dissent authorising lot 6's licence over the disputed part of common property. There were resolutions to grant a licence and exclusive use to another lot though, suggesting the body corporate made such decisions and recorded them in the minutes at the time. There was not a general failure of administration that might explain why a resolution without dissent would go unrecorded.
• [8] Mr Kaucic then submitted a copy of a licence to occupy the same area of common property executed in 2010, suggesting the relevant resolution without dissent must have been passed before that. But that licence was granted to a former occupier of lot 6 by the body corporate and expired when their lease with the former owner of lot 6 expired. I do not see its relevance to the respondent's right to use the same part of the common property in the present day.
• [9] The body corporate argues that even if the licence granted in 2014 was properly authorised, licences are granted to individuals and cannot unilaterally be assigned by the licensee to someone else. A licence:

... is a personal privilege conferring no interest in the land. It is not transferable, nor can it be granted in perpetuity. It is generally revocable and merely excuses a trespass until it is revoked...[5]

• [10] However, the 2014 deed included the following text, indicating it might pass to future owners of lot 6:

This Deed binds Laila Hachem, any licensee from Laila Hachem, Assignee or successors in title.

• [11] The High Court has held that a putative licence may in fact be a lease, depending on the nature of the rights it grants.[6] A lease is an interest in land and can be assigned to another person. It should generally grant a right to exclusive possession.
• [12] That is quite difficult to apply in the present case as the 2014 deed did not specify the rights Ms Hachem was to enjoy in relation to the disputed area of common property. It said she was granted an "exclusive licence in perpetuity" without saying what she could do with it.
• [13] Nevertheless, I accept that there was no resolution without dissent to grant the 2014 licence, so the question of whether it was truly a lease that might validly have been assigned to successive owners of lot 6 is moot. A lease of greater than ten years' duration would also have required authorisation by resolution without dissent.
• [14] Mr Kaucic argues that he has an ongoing right to use the disputed area of common property irrespective of whether it was authorised by resolution without dissent because:
  1. the licence remains unrevoked
  2. the body corporate has conducted itself as if bound by the terms of the licence since 2014, and
  3. the licence is a restrictive covenant that runs with the land of the covenantee and may be enforced by a successor in title.
• [15] I do not accept any of these arguments. I do not see why the body corporate must explicitly revoke a licence it never resolved to grant. Acting alone, the committee member who signed the licence deed in 2014 had no power to bind the body corporate.
• [16] It is uncontested that for more than ten years the body corporate permitted lot 6 to use the disputed area of common property without objection and accepted payment of the annual licence fee required by the 2014 deed. But that does not mean the body corporate has acquiesced to the licence and is now estopped from disavowing it. As Justice Wilson said in Orknie Pty Ltd v Body Corporate for Paloma CTS 9524:

As a matter of general principle an estoppel will not ordinarily arise in the face of a statute. A better statement of the principle might be that, as Beldam LJ said in Yaxley v Gotts (2000) Ch 162 at 191, the question whether a party may rely on an estoppel in the face of a statute depends upon the nature of the enactment, the purpose of the provision and the social policy behind it.[7]

• [17] The Act provides that the common property is owned by all lot owners as tenants in common.[8] It does not permit the owners to be divested of it without their agreement. Whether they give up control of the common property via an exclusive use by-law, a lease or licence of greater than ten years' duration, sale, or some other form of disposal, a resolution without dissent is always required.[9]
• [18] The majority of the High Court put it like this:

Other provisions of the BCCM Act which also require a resolution without dissent of a body corporate can be seen to be variations on the theme that the charter of rights and duties established between lot owners in relation to the use and enjoyment of their community title under the community management statement should, generally speaking, not be altered save with the consent of all parties to the compact. Just as parties to a contract cannot, generally speaking, be obliged to give up contractual rights without their consent, so lot owners cannot be required to give up their property rights without consent to another lot owner...[10]

• [19] In a similar vein, Douglas J of the Court of Appeal said in Katsikalis v Body Corporate for "The Centre":

It is important that the rights to common property of bodies corporate are not removed unheedingly or inadvertently and to the detriment of their members. That is why the rules require such resolutions to be passed without dissent.[11]

• [20] The fact that the body corporate committee may have behaved as though the licence had properly been granted does not mean it was. The agreement of all owners was required under statute.
• [21] Leaving aside the important point that a licence was never properly granted, it is not a restrictive covenant in any event. A restrictive covenant limits the use of land in some way. A licence is a positive permission allowing someone to use land. Or:

A licence is an agreement in which the grantor confers on the licensee permission to enter the land for specific purposes which would otherwise be unlawful or constitute a trespass.[12]

• [22] But does the respondent's lack of a right to use the disputed area to the exclusion of other owners mean I should make the requested orders?
• [23] I will not order the removal of the awning structure and fixed bench seating because they were not installed by the respondent. The body corporate says they were installed in 2014, while the respondent did not become the occupier of lot 6 until 2021.
• [24] The 2010 licence submitted by Mr Kaucic granted Ambar Pty Ltd, then occupier of lot 6, permission to erect "a vinyl covered roof structure of a putty colour with clear roll down weather protection blinds supported by four 50mm square putty coloured powder coated posts affixed to the ground by 12mm dynabolts". That seems to be the structure that remains there today. I do not see that the respondent is under any obligation to remove improvements made by someone else, seemingly with the permission of the body corporate.
• [25] The body corporate is responsible for the administration of the common property.[13] It could remove the improvements if it chose.
• [26] The respondent is seemingly only responsible for placing moveable tables and chairs upon the common property. Pincus J of the Court of Appeal said in Platt v Ciriello:

As to impermanent placement of articles on the common property, such as tables and chairs, it appears to me that this is prima facie lawful; that is so because it does not amount to what would under the general law be called an ouster - i.e. a taking of part of the common property for exclusive use.[14]

The occupier of a lot must not obstruct the lawful use of the common property by someone else.

• [28] Blocking off this part of common property might constitute an obstruction. The shops at Broadwater Plaza form an L shape around the carpark, with a covered walkway running along the front of them. The disputed area is a paved triangular section protruding into the carpark from the walkway at the elbow of the L. Curiously, it does not appear on the registered plan.[15]
• [29] In the absence of the improvements, pedestrians would likely pass through the disputed area going between the carpark, lot 6, the walkway along the shopfronts, and what looks on the plan to be toilets behind lot 6. While these areas are still accessible with the improvements in situ, pedestrians must navigate around the triangular section jutting into the carpark rather than passing directly through it.
• [30] But the improvements have been blocking passage through this area since well before the respondent started seating customers there. In that context, bearing in mind that the respondent is not responsible for the improvements, I do not see that the moveable tables and chairs have been obstructing the lawful use of the common property contrary to by-law 3. People could not get through anyway. The respondent has been using an enclosed corner of the common property of no obvious use to anyone else to seat customers. As Pincus J said, that is prima facie lawful.
• [31] The body corporate's argument that the respondent's use of the area is causing a nuisance or unreasonable interference contrary to section 167 of the Act fails for the same reason. It relies on the idea that:

The Dining Area has been enclosed in a manner that segregates it from other businesses in the Scheme, creating a perception of exclusive use for the Respondent's patrons, deterring others from using the Dining Area even when the Respondent is not trading. Accordingly, this commercially-driven use monetises the common area, unreasonably denies concurrent use of the Dining Area, prevents the Applicant from converting the Dining Area into a communal space for the use and enjoyment of all, and prevents visitors to the Scheme from using the Dining Area as a thoroughfare.

• [32] As discussed, it is largely improvements made by a previous tenant that are having that effect. If the respondent ceased its use of the area, it would remain blocked to pedestrians. Consequently, I will not make order 1.
• [33] Order 3 concerns tables and chairs placed in the walkway along the shopfronts. Mr Kaucic denied that the respondent places any tables and chairs there, but a photograph submitted by the body corporate shows otherwise. The walkway extends from the front of the shops to just inside the roofline. The photograph at page 47 of the application shows several tables and chairs and two heaters inside that area.
• [34] This area is clearly intended for pedestrians to pass along the front of the shops. There is nowhere else for them to do that without walking in the carpark. The tables, chairs and heaters significantly restrict the space available and are an obstruction of the common property contrary to by-law 3. The respondent must remove them from the area marked "verandah" on the registered plans and keep them away.

[2] Platt v Ciriello [1997] QCA 33.

[5] Wilson J_, R v Toohey; Ex parte Meneling Station Pty Ltd_ [1982] HCA 69 at [17].

[6] Radaich v. Smith [1959] HCA 45.

[7] [2010] QCATA 52 at [22].

[9] Act, s 62(2) & (3)(a); Commercial Module, s 131(2).

[10] Ainsworth v Albrecht [2016] HCA 40 at [59].

[11] [2009] QCA 77 at [32].

[12] Halsbury's Laws of Australia at [245-235]; Winter Garden Theatre (London) Ltd v Millennium Productions Ltd [1948] AC 173 at 188, 193; cited by Douglas J in Katsikalis v Body Corporate for "The Centre" ibid at [29].