Skygardens Caloundra [2018] QBCCMCmr 377

Brian and Diane Cosgrove, Owners of Lot 20 (applicant)

Body Corporate for Skygardens Caloundra (respondent)

Body Corporate and Community Management Act 1997 (Act),

Body Corporate and Community Management (Accommodation Module) Regulation 2008 (Accommodation Module)

INTERIM ORDER - whether an interim order is warranted in the circumstances.

I hereby order that the application for interim orders is dismissed.

[1] This application relates to an extraordinary general meeting (EGM) of the Body Corporate scheduled for 3 August 2018 and the issue of glass balustrades on balconies.

[2] Since 2013 the Body Corporate has been considering owner requests regarding the enclosure of the rear facing balcony on their lots. Following detailed Committee investigations, the Body Corporate resolved at its annual general meeting (AGM) in November 2015 (Motion 12) to seek approval from the Sunshine Coast Council (Council) for glass balustrades on the rear balconies. The apparent intention was that after Council approval was obtained, owners wishing to install such balustrades could apply to the Committee for final approval.

[3] Council approved the request. In December 2016 the Committee resolved that owners seeking to install the glass balustrades would apply to the Committee for permission, which would be given if it was in accordance with the approved documentation. The applicants say four owners received permission and undertook the work using the same builder. However, it seems the builder did not follow the specifications, the work did not receive certification, and the builder went into liquidation. The applicant says the four lot owners are rectifying the issue to ensure the balustrades comply with the approved specifications and are certified.

[4] At the AGM in December 2017 the Body Corporate purportedly resolved (Motion 12), in part, to rescind Motion 12 from the November 2015 AGM. The applicants claim one vote was miscounted such that the motion did not actually pass. The applicants asked for a further motion to rectify the miscount.

[5] The applicants assert that at a meeting on 11 May 2018 the Committee incorrectly determined that the disputed balustrades were an improvement to common property and so required general meeting approval. The applicants say the balconies are not part of common property but are on the title for the lot. They assert that the boundary between the lot and the common property was (at the time when there was no balustrade installed) the outer edge of the balcony wall and that the glass balustrades have been affixed to the inner block wall. They further assert that the by-laws do not require them to obtain approval for the balustrades.

[6] The Body Corporate has now called the EGM scheduled for 3 August to consider four motions regarding the balustrades. Motion 2 proposes to rescind Motion 12 from the December 2017 AGM, although the applicants say this motion is not in the same terms as they requested. Motion 3 proposes to reconsider Motion 12 from the December 2017 AGM, that being whether to rescind Motion 12 from the November 2015 AGM. The applicants say that the wording of both motions is inaccurate. Motions 4 and 5 propose the approval for the applications from Lots 16 and 18 respectively for the installation of glass balustrades in accordance with attached specifications. The applicants and the other affected owner declined an invitation to submit their own application for approval of the balustrades.

[7] The applicants claim that since the 2017 AGM the chairperson has caused considerable issues for the four affected owners and has instructed the certifier not to speak to the applicants. The applicants say they are concerned that the Committee is going to try and have their balustrade removed even once the defects are rectified.

[8] The applicants seek orders: that the Body Corporate's approval to install glass balustrades is valid and current; that their work to rectify the defects is within the approval originally given and can proceed and be certified unimpeded; and that 2017 AGM Motion 12 be deemed to have been lost. In the interim the applicant wants the EGM for 3 August to be postponed.

[9] The question to decide then is whether interim orders are warranted.

[10] Skygardens Caloundra community titles scheme 36015 (Skygardens Caloundra) consists of 20 lots and common property. The community management statement (CMS) shows the Accommodation Module applies. The scheme is registered as Survey Plan 193046.

[11] This application was lodged on 3 July 2018 seeking the following interim order:

That the proposed EGM, to be held on 3 August 2018, be postponed until the substantive matters are determine by the BCCM.

[12] The applicants then seek the following final orders:

1. The body corporate's approval for owners to install glass balustrades on their rear balconies be ratified and declared valid and current;
2. The work the Applicants are currently undertaking to remedy the defective glass balustrade on their rear balcony is within the approval provided by the body corporate at the 2015 AGM and the subsequent approval by the then secretary of the committee and can therefore proceed without impediment and as such they can continue with this work unimpeded by the body corporate;
3. The Applicants do not need to make a further application to install glass balustrades on their balcony as the work has already been approved by the body corporate;
4. Motion 12 from the 2017 AGM was lost and that the minutes are to be amended within 14 days to reflect the correct tally of votes.

[13] An adjudicator may make an order that is just and equitable in the circumstances to resolve a dispute about a claimed or anticipated contravention of the Act or the CMS, or the exercise of rights or powers or performance of duties under the Act or the CMS.[1] An order may require a person to act, or prohibit a person from acting, in a way stated. An order may contain ancillary and consequential provisions the adjudicator considers necessary or appropriate.[2]

[14] In particular, an adjudicator may make an interim order if satisfied, on reasonable grounds, that one is necessary because of the nature or urgency of the circumstances.[3]

[15] I am satisfied that this matter falls within the legislative dispute resolution provisions.[4] However I note that an issue arises regarding the time limit for lodging the application in regard to the fourth order sought, which I will comment on below.

[16] In the first instance the Commissioner sought clarification from the applicant on some aspects of the application.[5] The application was subsequently amended.

[17] The Commissioner then referred this application to me to decide whether the nature or urgency of the circumstances warrants an interim order[6]. As provided for by the Act, the Commissioner made this referral notwithstanding that affected persons had not been given notice of the application or afforded an opportunity to make submissions about the application.

[18] There is no statutory requirement to obtain comment from a respondent or affected parties prior to an interim order being decided. However, in the circumstances I provided the Committee with a limited opportunity to comment on the application for interim orders. A submission was made by Mr Robert Chapman for the Committee.

[19] The Committee submission includes the following:

1. The Body Corporate has been consistent in its approach since 2015.

2. The Committee is trying to work with the lot owners to have the balustrades correctly installed as per the original Council approval and the certifier approval.

3. The correct building approvals and certification is required urgently to halt future enforcement action and enable insurance to be obtained.

4. The Body Corporate is working towards the approval of the balustrades for Lots 16 and 18 at the EGM to enable the Body Corporate to arrange an amended building application from the certified.

5. The Body Corporate has been advised that the previous process was incorrect. Any approval granted by the secretary at the time (Mrs Diane Cosgrove) may be challenged as invalid because they could not be approved by any delegated person. Advice received is that an EGM is required to approve the balustrades.

6. Contrary to the applicants' claims, no record has been found in the Body Corporate's records of any application for approval by Lot 20.

7. Following a request to the previous secretary (Mrs Cosgrave), on 17 May they were advised that Lots 12, 15 and 16 made written applications but Lots 18 and 20 made verbal applications. The previous secretary approved expressions of interest with no accompanying documentation, which contravened the agreed process. No record of applications by Lots 12, 16, 18 and 20 have been sighted by the Body Corporate.

8. On 1 March Lots 12, 16, 18 and 20 advised that new applications would be lodged with the Body Corporate. Applications have only been received from Lots 16 and 18.

9. An application is not difficult or time-consuming- an email to seek approval is adequate.

10. It is imperative that the correct procedure is followed as it will impact on future applications for balustrades if and would create a dangerous precedent if it is not.

11. The Body Corporate only became aware of the safety issue and non-compliance of the balustrades in December 2017. Correspondence during 2017 was not provided to the Body Corporate, advised as being 'an unintended oversight'.

12. It is unjust for the approvals for Lot 16 and 18 to be delayed at this late hour. Motions 4 and 5 do not directly affect the applicants.

13. The Body Corporate asks that the EGM be allowed to proceed.

14. Delaying the EGM will impose costs and it is not reasonable for the Body Corporate to incur these costs. The right of owners to decide the outcomes of the motions should not be taken away from them.

15. In regard to 2017 AGM Motion 12, there is a dispute about whether the tally sheet is correct. The body corporate manager believes the votes were recorded correctly. As Lot 6 believes their vote was incorrectly recorded, it is reasonable to resubmit the motion and allow all lot owners to vote on the matter.

[20] The only issue at this time is whether an interim order is warranted. However, to determine whether it is just and equitable to grant interim relief, it is necessary to consider the substantive issues in dispute in the application.

[21] Any order granted must be just and equitable.[7] An interim order will not be granted unless it is necessary due to the nature or urgency of the circumstances.[8] The examples in the Act indicate the usual circumstances where an interim order might be made are in the nature of injunctive relief. While it is not possible to define the range of matters that might be the subject of an interim order, an applicant must establish that the circumstances warrant an interim order. An interim order will not be made if the only urgency is a desire to expedite the dispute.

[22] An adjudicator must be satisfied an application raises serious legal questions and the balance of convenience between the parties justifies injunctive relief. That is, an adjudicator must balance the inconvenience of granting relief now if final orders are ultimately refused against the inconvenience of refusing relief now if final orders are ultimately granted. Of particular relevance is evidence an interim order is necessary to prevent serious or irreparable harm.

[23] While the application outlines in detail the history of the balustrade issue and the applicants concerns on the matter, I have found the application to be somewhat confusing as to the legal basis for the particular orders sought. I will comment on the orders sought in turn.

[24] In the first and third orders final sought the applicants seek ratification and validation of the original approval purportedly given to owners to install the glass balustrades on their balconies, and that they do not need to make any further application for approval.

[25] The first question relating to that is whether, having regard to the nature and precise location of the balustrades, Body Corporate approval was required for owners to install the balustrades.

[26] Under a building format plan of subdivision, which this scheme is, the lot boundaries are defined on the survey plan by the structural elements of a building, including the floors, walls and ceilings. Where a lot is separated from another lot or common property by a floor, wall or ceiling, the boundary is the centre of the floor, wall or ceiling.[9] However, in the case of a balustrade or railing, the boundary will be the outer face and in the case of the edge of a floor or concrete base not abutting a wall, the boundary will be the outer edge.[10]

[27] It appears from the survey plan that the balcony in question is part of Lot 20. Accordingly, if the balustrade on Lot 20 was installed on the outer edge of the balcony, the balustrade would be on the boundary between the lot and common property and the installation of the balustrade would arguably constitute an improvement to common property. However, if the balustrade was installed at some point inside the outer edge of the balcony, arguably it would only constitute an improvement to the lot. It may be that it will be necessary to investigate further the location of the balustrades.

[28] A body corporate can authorise an owner to make an improvement (which includes a change[11]) to common property if requested by the owner.[12] Unless the improvement falls within the definition of a minor improvement, the body corporate would need to pass an ordinary resolution to approve an improvement to common property. The approval can be given on conditions that the body corporate considers appropriate. An owner who is authorised to make an improvement must comply with any conditions and must maintain the improvement in good condition, unless excused by the body corporate.

[29] In the case of an improvement to a lot, there is no statutory requirement for approval to be sought. Accordingly, body corporate approval would not be required unless it was required under a by-law. In this case, By-law 8 requires approval for a change to the external appearance of the lot, unless it is minor and does not detract from the amenity of the lot and its surrounds. By-law 14 requires approval for structural alterations. The applicants suggest that these by-laws do not apply to the balustrade and that is a matter that would need to be investigated in respect of the final orders.

[30] If the by-laws do apply, a Committee decision would be sufficient to grant such approval unless the Body Corporate had resolved that the matter was a restricted issue for the Committee. If the Committee was empowered to grant approval to an alteration under By-law 8 and 14, the decision would need to be made by the Committee and could not be delegated to a single committee member.

[31] If Body Corporate approval was required, the next question is whether that approval was actually given. The application is somewhat unclear in this regard and in conflict with the Committee submission. This matter may require further investigation.

[32] I note that while the 2015 AGM resolved to apply to Council for approval for the installation of balustrades on lots that want them, it did not actually approve the installation of any balustrades. Similarly, while a Committee resolved on 9 December 2016 that it would approve any applications received with the approved documentation, the applicants have not included evidence in their application that they made an application with the approved documentation or that the application was actually approved.

[33] If Body Corporate approval was required but not technically given, there may be a further question of whether the Body Corporate could resile from indications that the balconies were approved before they were installed or, acting reasonably[13] in the circumstances, could now refuse to give approval for balustrades that complied with the originally agreed specifications. However, as the Committee is apparently recommending approval of the applications regarding the balustrades in Lots 16 and 18, it is not evident that the Body Corporate actually wants to refuse approval for the balustrades in Lot 20 (or Lot 12).

[34] I would make the observation that even if the applicants were confident that their balustrades had been properly approved, and that further approval is not necessary, it is not clear why they have chosen not to follow the process requested by the Committee to enable the balustrades to be approved at a general meeting. If the general meeting approves the balustrades the status quo (in the applicants' eyes) remains but any dispute over the issue with the Committee is removed and matters can proceed. If the general meeting does not approve the applicants' balustrades, it does not change the situation if the applicants can establish that they have already been approved.

[35] Next the applicants seek an order that they be permitted to proceed with the work to rectify the glass balustrades and that the work be able to be certified without impediment.

[36] The applicants briefly comment on the conduct of the chairperson and express their concern that the Committee may seek the removal of the balustrades. However, the applicants have not explained or provided evidence to substantiate that the Committee is in fact impeding the current rectification works. The applicants indicate that the chairperson is seeking to remove Lots 12 and 20 from the certification process, however that is not immediately clear from the documents provided. Moreover, the applicants have not clearly explained how any such conduct would be contrary to the body corporate legislation such that it would give rise to a dispute under the Act.

[37] The submission from the Committee appears to directly contradict the applicants' claims, in that it asserts that the Committee is seeking to progress the rectification and certification as soon as possible. Given that both sides appear to have the same goal, it is not immediately clear to me from the material submitted why the parties are not able to work cooperatively to progress their common goal.

[38] At this stage it is not immediately evident that the applicants have raised a genuine legal issue on this point that would warrant an order. The applicants may wish to address this matter further before the application proceeds.

[39] I note that it may be inappropriate, given the circumstances, if the Committee were to impede rectification works or their certification. If ultimately it was determined that the balustrades did not require approval, had been approved, or should be approved, it would presumably be in the interests of the Body Corporate and all owners for the rectification and certification to proceed as soon as possible. However, even if it was ultimately determined that the balustrades had not been validly approved, should not have been approved, or that approval could and had been rescinded, that would not mean it would be appropriate to impede the rectification or certification. It appears that the owners are funding the cost of the rectification and so they are the ones who incur a loss if the rectification works were completed but that ultimately it was decided that they must vary or remove the balustrades.

[40] The applicants seek an order that Motion 12 from the 2017 AGM was lost and that the minutes be amended.

[41] Although the applicants have not provided me with minutes of the 2017 AGM, it appears from the voting tally sheet provided that the recorded votes resulted in Motion 12 having passed with ten votes in favour and eight against. The vote for Lot 6 is shown on the voting tally sheet as being 'yes' for Motion 12. A statement from the owner of Lot 6 dated 13 December says they voted 'no' for motion 6, and still have their completed voting papers to that effect. The statement of another owner says they sat next to the owner of Lot 6 at the AGM and witnessed that she voted 'no' to Motion 12 by a show of hands. If the vote cast for Lot 6 was 'no', Motion 12 would have failed, with nine votes in favour and nine against.

[42] Given the corroborated statement of the lot owner, there does appear to be a question as to whether the votes for Motion 12 were accurately recorded and whether the motion should have been recorded as having failed to pass.

[43] The applicants have sought an interim order to postpone the EGM scheduled for 3 August until the substantive issues in the application can be determined. However, the applicants have not stated in the statement of the final orders sought that they seek orders regarding the validity of the EGM or its motions.

[44] I note that in one part of the applicants' submissions[14] the applicants say they seek a declaration that EGM Motions 2 and 3 are invalid. The omission of this from the statement of orders sought may have been an oversight, noting that there appear to have been multiple amendments to the application and conflicting statements of the orders sought. The applicants may wish to address this matter further before the application proceeds.

[45] To the extent that the applicants do seek an order on this issue, the basis for the order is unclear. The submissions indicate that it arises from the requested declaration that Motion 12 from the 2017 AGM was lost. However, it is not clear why an order that Motion 12 was lost would render EGM Motion 2 or 3 to be invalid (although arguably Motion 2 would be unnecessary if it was considered after an order was made about 2017 AGM Motion 12).

[46] The applicants also refer to the fact that the explanatory note for Motions 2 and 3, which are listed as having been submitted by the Committee, comment that an objection was received from an owner regarding the recording of votes for AGM Motion 12 and that the Committee had agreed to the owner's request to put forward motions to the next general meeting to rescind and reconsider the motion. The applicants say this is incorrect. The terms of the explanatory note may not strictly accord with the nature of the applicants' request on this point, which was that vote count for Motion 12 be amended. However, it is not clear why that of itself would be sufficient to invalidate EGM Motions 2 and 3.

[47] Given that the results of 2017 AGM Motion 12 were presumably declared at the AGM, there is a question as to whether the Body Corporate has the power to subsequently resolve to amend the declared result even if was incorrect. Other than seeking the order of an adjudicator on the issue, arguably the appropriate mechanism for the Body Corporate to deal with an apparent error on this issue would be to rescind the purported resolution and reconsider the motion.

[48] Fundamentally, I am not clear why the applicants are seeking an interim order to have the EGM postponed.

[49] The applicants say they are concerned that if the EGM goes ahead the Body Corporate may decide to take breach action for having their previously approved balustrades reinstalled. However, the applicants have provided no evidence to suggest that any such action is contemplated by the Body Corporate.

[50] Moreover, I am unclear how the consideration of the EGM motions would affect whether or not the Body Corporate sought the removal of the balustrades or to prevent their reinstallation. If in fact the Body Corporate did seek to breach the applicants for the reinstallation of the balustrades, the applicants could take action to restrain that conduct at that time. However, it would not be appropriate at this time to make an interim order based on the apprehension of action when there is no evidence that such action is genuinely contemplated or imminent.

[51] The applicants also assert that if the declaration sought by them regarding Motion 12 from the December 2017 AGM is made, then there would be no need for the motions at the upcoming EGM. It may be the case that the fourth order sought by them would remove any necessity for EGM Motion 2. However, the applicants do not explain what irreparable harm could be occasioned by the Body Corporate proceeding to decide EGM Motion 2 before the order is considered. If the Body Corporate resolved to pass EGM Motion 2, arguably the need for the order sought by the applicants would be resolved.

[52] Furthermore, the fourth order sought by the applicants would not address the issue in EGM Motion 3. If Motion 12 from the December 2017 AGM ceases to have effect - either because it is rescinded by the Body Corporate or deemed to have been lost by an adjudicators order - it makes no difference to the apparent desire of the Committee to reconsider the issue afresh. The applicants have not established why the Body Corporate should not be entitled to do so.

[53] In addition, the applicants do not explain any objection to EGM Motions 4 and 5. The applicants have chosen not to seek further approval for their balustrades, and presumably consider that the owners of Lots 16 and 18 do not need further approval. However, they do not explain why the Body Corporate should not be able to consider whether to approve the balustrades for those other lots. If the motions are passed, it at least removes any uncertainty for those lot owners even if it only has effect of confirming the (alleged) existing approval. If the approval is not necessary, there is no adverse impact on any lot owner if the motions are not passed because it would not change the status quo. I am unclear from the application how the consideration of Motions 4 or 5 could adversely affect the Body Corporate or any owner.

[54] A further issue arises regarding the fourth order sought. Section 242 of the Act provides that an application to invalidate a committee or general meeting, or a resolution of a committee or general meeting, or a committee election, must be lodged within three months of the date of the relevant meeting, including a meeting at which a resolution was purportedly passed. However, the section provides that if the application is lodged outside the time limit the Commissioner must deal with the application as if it were in time. The section goes on to provide that the adjudicator may waive the time limit for 'good reason'.

[55] The courts have found that the consideration of whether there is 'good reason' to waive compliance requires a "...balancing of the length of the delay; the reason for the non-compliance; the effect of delay on others who are affected by the matter in dispute and importantly, whether apart from the question of non-compliance with the time requirement, an applicant will be entitled to the relief sought."[15] An applicant bears the onus of satisfying the adjudicator that the time limit should be waived.

[56] In the fourth order the applicants are challenging the result of Motion 12 which was purportedly resolved at the AGM on 8 December 2017, and seeking a determination that the motion was not passed. The application in regard to that order was not lodged within three months of the meeting. In fact, it was lodged almost seven months after the meeting.

[57] The applicants say they have been trying to resolve the matter directly since the AGM but have not explicitly commented on the time limit or why it should be waived in regard to that aspect of the application. This is a matter that should be considered in the context of the final orders. The applicants may wish to address this matter further before the application proceeds.

[58] There may be an issue to determine as to whether the Body Corporate has already validly approved the installation of the glass balustrades at the building. There may also be a question as to whether the recorded result of Motion 12 at the 2017 AGM was correct. However, the applicants have not satisfied me that the nature of the issues they have raised warrant the making of an interim order to defer the conduct of the EGM scheduled for 3 August 2018. Accordingly, the application for interim orders is dismissed.

[59] This application will now be returned to the Commissioner to progress under the Act. The applicants may wish to review some aspects of the application in light of the discussion above. If the dispute is not otherwise resolved, I anticipate the Commissioner would seek submissions from the respondent and all owners in respect of the final order application. In due course, the application is likely to be referred back to an adjudicator for determination.

[4] See sections 227, 228, 276 and Schedule 5 of the Act

[9] Sections 48C and 49C(4) of the Land Title Act 1994

[10] Registrar of Titles Directions for the Preparation of Plans, Department of Natural Resources and Mines, paragraph 9.6.1.

[11] See the definition of an 'improvement' in Schedule 6 of the Act

[12] Section 162 of the Accommodation Module

[13] Noting sections 94(2) and 100(5) of the Act

[14] Page 6 and 7 of correspondence identified as being dated 12 July and revised 18 July

[15] Weeks v Commissioner for Body Corporate, District Court Appeal 13/99, 20 September 1999, unreported