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

IMPROVEMENT TO COMMON PROPERTY - An occupier installed a new gas tank, slab, and metal barriers on common property in place of several smaller gas bottles without body corporate approval. Whether:

• the new infrastructure was an improvement to common property requiring body corporate approval
• the new infrastructure is subject to a statutory easement
• the infrastructure should be removed and the common property reinstated to its former condition.

Act, ss 62(2)-(3)(a), 171(2)(b), 184; Commercial Module, ss 42, 134, 140(3); Building Units and Group Titles Act 1980, s 30(3) & (7A); Land Title Act 1994, s 115O.

• remove the gas tank, slab, and barriers (the gas infrastructure) installed on common property to the north of lot 1 in late 2023 and reinstate the common property to its former condition, or
• relocate or alter the gas infrastructure as may be authorised by the body corporate

unless the body corporate resolves that the gas infrastructure may remain as it is, or an adjudicator orders otherwise.

• [1] The respondent is the occupier of lots 1, 2, 4, 5 and 8 at Loganholme Industrial Centre, where it operates a pet crematorium. This application concerns gas bottles, a gas tank, and associated infrastructure installed on common property to the north of lot 1 for the use of the respondent.
• [2] The owner of lot 2 installed 10-12 gas bottles in the area, along the external wall of the building, between 2000 and 2020 when he ran a similar business from lot 2 (which he subsequently sold to the respondent). In mid 2023, the respondent says it installed a further 10 gas bottles nearby along the northern boundary of scheme land. It then removed all these bottles and installed a much larger gas tank on a concrete slab with metal barriers to protect it in November of the same year. The respondent says it had the permission of the owners of lots 1 and 2 to install the tank, and they made submissions in support of the respondent.
• [3] The body corporate says the respondent should not have installed the 10 additional bottles (now removed) or the larger tank with slab and barriers because:
  1. it lacked body corporate approval
  2. it does not have exclusive use of the area, and
  3. the area is subject to a drainage easement that prohibits "any obstruction, interruption, impeding, hampering or interference with, diversion, scouring, change or alteration in or to the flow of stormwater drainage at any time".
• [4] The body corporate seeks orders in the following terms:

a. remove the large gas tank on common property to the north of Lot 1;

b. not reinstall the gas tanks along the northern boundary of scheme land;

c. remove the concrete stand and barrier and restore the common property to its original condition, taking into account the requirements of the stormwater easement on common property.

• [5] The respondent says the application should be dismissed because:
  1. lot 1 has exclusive use of the area to the north of lot 1 and successive occupiers have used the area for various purposes without controversy
  2. the replacement of the old bottles with the new tank was maintenance the respondent was obliged to carry out, rather than an improvement requiring body corporate approval
  3. the tank benefits from a statutory easement for utility infrastructure reasonably necessary to provide a utility service to the lot, and
  4. the tank does not interfere with the drainage easement as it is entirely above ground, while the easement relates to subsurface drainage.
• [6] If I conclude that the tank does require some form of body corporate approval, the respondent says it would be more just and equitable to give it the opportunity to seek that approval retrospectively rather than insist upon immediate removal.

• [7] No orders are necessary with respect to the gas bottles. They have been removed and there is no evident intention to reinstate them.
• [8] The gas tank appears to require body corporate approval on several grounds. It is an improvement to common property,[1] its installation likely involved marking or driving nails, screws or other objects into common property (by-law 9), and it involves storing a flammable substance on the common property (by-law 14).
• [9] I will not focus on the by-law aspects as they were not argued by the applicant and there is no indication the applicant has issued the respondent with a contravention notice, which is a prerequisite to lodging a by-law enforcement application under the Act.[2]
• [10] Schedule 6 of the Act says "improvement" includes:

(c) a non-structural change, including, for example, the installation of air conditioning.

Change includes addition - see the Acts Interpretation Act 1954, schedule 1, definition change.

• [11] The former Commercial and Consumer Tribunal held that an improvement should generally be some positive addition to the common property that adds to its quality or usefulness.[3]
• [12] The respondent claims the installation of the tank was maintenance rather than an improvement because:

... the primary purpose of the replacement of the older Small Tanks (including the Original Tanks in place for in excess of 25 years) with the Large Tank, was to replace ageing infrastructure with more modern infrastructure

• but which otherwise continued to serve the exact same fundamental purpose of gas supply.

• [13] It quoted the following passage from the UK Court of Appeal's Morcom and Ors v Campbell-Johnson and Ors:

The test so far as one can give any test in these matters, is this: if the work which is done is the provision of something new for the benefit of the occupier, that is, properly speaking, an improvement; but if it is only the replacement of something already there, which has become dilapidated or worn out, then, albeit that it is a replacement by its modern equivalent, it comes within the category of repairs and not improvements.[4]

• [14] And the following from Adjudicator Miskinis in The Presidents Lodge:

[55] Obvious examples of improvements would include installation of new recreational facilities such as a new pool or tennis court, or refurbishment of a foyer. On the other hand, replacement of an existing fence would be classed as repairs or maintenance. Replacement of a safety balustrade with a safer type of balustrade has been held to constitute "maintenance" but the erection of new balustrades on an area where none previously existed would be considered to be an "improvement".

[56] It could be said that any maintenance or repair incorporates "a change" Maintenance work will often involve the replacement of something with a modern equivalent and may also enhance the appearance of something. However this does not mean that the work involves making an improvement for the purposes of section 163 of the Standard Module.[5]

• [15] However, I do not accept that the new gas tank is simply a modern replacement for old and worn out gas bottles. No evidence has been submitted to indicate that the bottles were dilapidated and required repair or replacement. Ten of them were new.
• [16] The owner of lot 2 submitted an email written by the National Operations and Safety Manager of the respondent on 17 January 2024 explaining that two new "state of the art" cremators had been installed in lot 2 that required a higher gas pressure than the old gas bottles could provide, necessitating the larger tank. It seems to me that the new tank was an addition to the common property that enhanced its value and usefulness, delivering a gas pressure that was previously unavailable and allowing the respondent to operate new and better equipment in lot 2. In other words, it was an improvement.
• [17] The respondent claims lot 1 has exclusive use of the area where the tank is now installed. It points out that lot 1 once had exclusive use of two areas to the north of lot 1 for the purposes of installing and operating a grease trap and compressor. The by-law granting those rights was removed in the community management statement (CMS) recorded in 2007, though the minutes of the 2006 annual general meeting attached to that CMS show that the motion to record the CMS was passed by special resolution and without a vote from lot 1. That was irregular, as a change to an exclusive use by-law requires approval by resolution without dissent and the agreement of the affected lot owner.[6]
• [18] Yet the respondent does not claim that the tank is within these areas. I assume it is not, because the respondent goes on to argue:

Sometime between 1996 and 1999, the Body Corporate for the Scheme (Body Corporate), authorised and approved an expansion of the exclusive use of the Area by Lot 1 (i.e. beyond the originally recorded areas associated with the Original Infrastructure), although no formal amendment or recording of exclusive use was registered against the title to the common property for the Scheme.

• [19] That argument would be unnecessary if the tank was in the areas allocated for the exclusive use of lot 1.
• [20] No evidence of the claimed expansion of lot 1's exclusive use area has been tendered. Under the Building Units and Group Titles Act 1980, which regulated Loganholme Industrial Centre in the period specified, by-laws had no effect unless recorded by the registrar of titles.[7] Similarly, allocations of common property under an exclusive use by-law had no effect unless recorded by the registrar.[8] I have consulted the registrar's records and no exclusive use by-laws or allocations over the area to the north of lot 1 have ever been recorded, aside from the two small rectangular areas allocated to lot 1 in 1997 for use as a grease trap and compressor.
• [21] In any event, body corporate approval for the installation of the tank, slab, and barrier were required irrespective of whether it was installed in an exclusive use area. An improvement to an exclusive use area requires body corporate approval by ordinary resolution unless it is permitted by the exclusive use by-law.[9] Exclusive use by-law 24(a) recorded in 1997 (and invalidly omitted in 2007) did not permit the construction of any of these items.
• [22] Alternatively, the body corporate may permit an owner to make an improvement to unallocated common property for the benefit of their lot, with no specific form of authorisation specified.[10] This might be granted by the body corporate committee or the body corporate in general meeting. The owner of lot 2 might prefer to seek approval at a general meeting irrespective of whether it could be granted by the committee, as he believes the present dispute has only arisen because the committee "has a problem" with the respondent.
• [23] The body corporate claims it could not have permitted the installation of the tank even if asked, as there is no exclusive use over the area and the respondent is not entitled to use it to the exclusion of other owners and occupiers. However, the respondent correctly points out that a statutory easement exists:

...in favour of a lot and against other lots and common property for supplying utility services to the lot and establishing and maintaining utility infrastructure reasonably necessary for supplying the utility services.[11]

• [24] At face value, that would entitle the respondent to put the gas infrastructure somewhere on the common property, as otherwise it could not supply the utility service it now requires in lot 2. No exclusive use, lease, licence, or other disposal of the common property in favour of the respondent is necessary, so long as the utility infrastructure is reasonably necessary for the supply of the utility service.
• [25] Approval for the improvement to common property is still required though. That gives the body corporate the opportunity to apply reasonable conditions of approval to ensure that, for instance, the location of the infrastructure is not unnecessarily inconvenient.
• [26] It would also give the body corporate the opportunity to ensure that there is no conflict between the location of the infrastructure and the drainage easement that passes through the common property to the north of lot 1. I make no findings on that question, as insufficient evidence has been submitted. For instance, there is no surveyor's report to determine whether the gas tank and associated infrastructure lie in the path of the easement. If they do, I cannot say whether they might cause any "ponding, storage, retention or deviation of waters through or under the servient tenement" contrary to clause 4(c)(ii) of the Memorandum of Transfer of Easement.

• [27] While the respondent should not have installed the new infrastructure without the owner of lot 2 (or 1 if the infrastructure really is in lot 1's exclusive use area) first seeking the approval of the body corporate, I accept that the best course is to allow the respondent and the relevant owner to seek retrospective approval before requiring that it be removed. As noted, the infrastructure likely benefits from a statutory easement that entitles the respondent to have it somewhere on the common property. The present location might be perfectly suitable given the long history (evident in the respondent's photographs and the submissions of several owners) of the occupant of lot 1 using that area of common property for various purposes. Or it might be possible to relocate or alter only some elements of the installation to address any concerns the body corporate might have. I will permit those avenues to be explored through the body corporate approval process before forcing the respondent to remove the infrastructure altogether. The respondent claims it was a $100,000 investment and is essential for its business. I would not lightly require that it be wasted.
• [28] I will allow time for the relevant owner to seek body corporate approval for the improvement to common property. I have been presented with no evidence that there is any urgency to resolve the situation within the requested 30 days, particularly given the infrastructure has now been there for 18 months. There was reportedly a fire somewhere around the gas tank shortly after it was installed, but no evidence was submitted to indicate that the tank was at fault. I have no reason to suspect that it poses any threat if allowed to remain while the respondent pursues body corporate approval.
• [29] Approval might be sought from the committee or all owners in general meeting. I note that enough owners expressed support for the respondent in their submissions that they could requisition an extraordinary general meeting to decide the matter.[12]
• [30] It would be a good idea to present clear evidence to owners or the committee as to whether there is any conflict between the drainage easement and the infrastructure when seeking approval, as that is likely to be a reasonable basis for opposition.
• [31] I will also allow sufficient time for the respondent or relevant owner to challenge the body corporate's decision if it does not go in their favour and they believe it was made unreasonably or otherwise unlawfully.
• [32] But if body corporate permission ultimately cannot be obtained for the infrastructure to remain where and as it is, the respondent will have to remove it, or relocate or alter it as may be approved by the body corporate.

[1] Commercial Module, ss 134 & 140(3).

[3] O'Neill, J. v Perrins, W. & Body Corporate For Bayview Mansions CTS 9302 [2008] QCCTBCCM 22 at [32]- [33].

[4] [1955] 3 All ER 264.

[5] [2018] QBCCMCmr 226.

[6] Act, ss 62(2)-(3)(a) & 171(2)(b).

[7] S 30(3).

[8] S 30(7D).

[9] Commercial Module, s 140(3).

[10] Commercial Module, s 134.

[11] Land Title Act 1994, s 115O.