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Body Corporate Case Update: Sundeck Case

25 September 2013

The Facts

The lot owners had purchased a unit from the developer in 1998.  The sale contract described the property as including the "exclusive use of adjacent roof area".  The first community management statement made no reference to this exclusive use right. 

In September 1998, the developer advised the body corporate manager by a letter that exclusive use of the sun deck outside the unit was granted and asked for the records to be noted accordingly.  The body corporate manager advised the exclusive use could only be granted at a general meeting.

For the annual general meeting held in January 1999, a voting paper was circulated which included a motion for a by-law relating to letting rights to be deleted and a new community management statement to be lodged accordingly.  There was no reference to the exclusive use for the sun deck.

The minutes from that meeting recorded that a special resolution was passed to the effect that the by-law relating to letting rights be deleted and the sun deck area  be granted to the unit in question as an exclusive use area.  It was resolved for the new community management statement to be lodged.  This was significantly different to the motion proposed which made no reference to the exclusive use area.

A week after the meeting, the request was submitted to the registrar of titles to record the new community management statement incorporating these changes.  However, the dealing was requisitioned because (among other things) the new community management statement did not include a schedule of exclusive use areas or an exclusive use plan that complied with titles office requirements.  These requisitions were never answered and the new community management statement was not recorded.

The unit was sold some years later and the new lot owners asserted in August 2010 that they only recently discovered the community management statement recording the exclusive use area had not been recorded.  They formally requested the body corporate record the document and when the Body Corporate failed to do so, they applied for adjudication.

Adjudicator's Decision

The adjudicator gave orders to the Body Corporate to record the new community management statement on the basis that it was "just and equitable" to rectify the current by-laws under the powers given in section 276 of the Body Corporate and Community Management Act 1997

QCAT Decision

The Body Corporate appealed to QCAT.  Unfortunately, the case was then further complicated by the fact that the Body Corporate's decision to appeal the adjudicator's orders was made by the committee.  Section 312 of the Body Corporate and Community Management Act 1997 permits a body corporate to start proceedings only if it is authorised by a special resolution of the body corporate.  As a result, the decision made by the committee was one on a restricted issue under the relevant Module.

Notwithstanding this, the QCAT member still found in favour of the Body Corporate and set aside the adjudicator's order.  He could not be satisfied that the Body Corporate had resolved to grant the exclusive use right.  There was no evidence that the dimensions or area of the sun deck was ever agreed.  The voting paper setting out the motions for the annual general meeting did not make any reference to the grant of the exclusive use area.  Also, there was unexplained delay in the lot owners taking action.

Supreme Court Decision

The lot owners appealed unsuccessfully to the Supreme Court.  Ultimately, the Court held as follows on the grounds of appeal raised by the lot owners:

  • The Body Corporate was able to retrospectively give the committee authority to bring the QCAT appeal by way of a ratification of the committee's decision;
  • The original developer was unable to allocate the exclusive use to the unit without a by-law authorising it do so;
  • A general meeting could only pass a resolution if it were stated in the voting papers which did not occur in this case;
  • There was no clear identification of the proposed exclusive use area which could have been the subject to the adjudicator's order; and
  • There was no reasonable explanation of the delay in the lot owners taking action (especially given that subsequent lot owners had bought units in the complex on the expectation that the area in question was common property available for use by all members).

Citation : McEvoy & Anor v The Body Corporate for No 9 Port Douglas Road [2013] QCA 168

 

For more information please contact:

Rebecca Castley | Partner
Mullins Lawyers
t +61 7 3224 0211
f +61 7 3224 0333
rcastley@mullinslaw.com.au

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