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- Unreported Judgment
Dansur v Body Corporate for Cairns Aquarius CTS 1439 QCATA 15
QUEENSLAND CIVIL AND ADMINISTRATIVE TRIBUNAL
Dansur v Body Corporate for Cairns Aquarius CTS 1439 & Anor  QCATA 15
DANSUR PTY LTD
BODY CORPORATE FOR CAIRNS AQUARIUS CTS 1439
CATHERINE ANNE BUGEJA and PAUL SADIAUR MARIA BUGEJA
21 January 2022
11 August 2021
Member Richard Oliver
APPEAL AND NEW TRIAL – APPEAL – GENERAL PRINCIPLES – RIGHT OF APPEAL – WHERE APPEAL LIES – ERROR OF LAW – where appeal from an Adjudicator’s decision only on a question of law – where applicant opposed a motion to permit the second respondent to remove common property – where motion to permit the removal of common property was be passed by simple majority – where the adjudicator found there was no disposal of an interest in common property – where there was no dispute that part of the common property was removed to facilitate the removal of a window and installation of a larger window on the common boundary of the subject lot and the common property – where there was a change to the façade of the building – where there was no compensation or offer of compensation to the lot owners in the scheme for the removal of common property – whether the removal of the material was a disposal of an interest in common property – whether the replacement of part of the existing masonry windowsill with the glass window to the exclusive benefit of the second respondent was a disposal of an interest in common property – whether the change in the appearance of the external façade of the complex to the exclusive benefit of the applicant was considered could be approved by simple majority – whether the resolution for the works to included a removal of common property and required the resolution to be passed without dissent.
Body Corporate and Community Management Act s 154
Land Titles Act ss 4 1A, 41B and 41C
Acts Interpretation Act Sch 1
Body Corporate and Community Management (Standard Module) 2008 s 161
Katsikalis v Body Corporate for The Centre  2 Qld R 320.
Ainsworth v Albrecht (2016) 261 CLR 167
Diane  QBCCMCmr 585
Mr Strangman of Counsel instructed by Stratum Legal Pty Ltd
Mr Ryall instructed by Devenish Law
REASONS FOR DECISION
- Dansur Pty Ltd (“Dansur”) is the owner of a lot in the Cairns Aquarius CTS (“Aquarius”). The Bugejas are the owners of lot 83 in Aquarius. Lot 83 is on the top floor of Aquarius which is made up of 16 floors. There are 86 lots in the scheme. The lot 83 has an uninterrupted view across the Cairns esplanade out onto the Coral Sea.
- The Bugejas wanted to carry out extensive renovation work in their lot and in particular, to enlarge the window in the living room to enhance the aspect to the ocean and improve the amenity of the lot. Plans for the renovation were prepared and were ultimately submitted to an Annual General Meeting of the Scheme on 12 September 2019 for the approval of lot owners eligible to vote at the meeting. Relevantly for this appeal, Motion 10 sought approval to:
….make the improvements to the common property for the benefit of Lot 83 being the improvement more particularly set out in the attached plans (including any minor variations to the attached plans as may be required by the builder, for example, due to the exigencies of the site) including the enlargement of windows and any ancillary or associated works (the “Works”); and …
- It was evident from the construction plans that part of the masonry windowsill on which the window was sitting had to be removed therby lowering the height of the sill for the enlarged window. Part of the removed masonry was common property which was then disposed of. The motion was voted on but was ultimately restricted to the enlargement of the window only. It was passed by a simple majority. Dansur opposed the motion contending that the enlargement of the window was beyond the authority of the body corporate to approve by ordinary resolution with a simple majority. Because there was to be a removal of common property it was necessary for motion 10 to pass without dissent as required by s 161 of the then Standard Module.
- If follows that the body corporate authorised the carrying out of the work on the window, which necessarily resulted in the removal of part of the common property as further described below. The common property is owned by the owners of the lots in the scheme but the body corporate may enforce rights related to the common property as if it was the owner of the common property.
- Dansur sought an adjudication through the office of the Commissioner for Body Corporate & Community Management contending in the adjudication that the resolution to permit the work to be carried out by the Bugeja’s was void because a simple majority did not satisfy the requirements of s 161 of the Standard Module.
- On 24 June 2020 an Adjudicator published reasons for a decision that resolution 10 was not void on the basis that:
While the windows are located in a boundary structure, I do not believe that enlargement of the windows involve the disposition of an interest in the common property. I am therefore of the view that an ordinary resolution was sufficient to authorise the works and a resolution without dissent was not required.
- After receiving the adjudication Dansur filed an application for leave to appeal or appeal in the appeal tribunal. The grounds of appeal are as follows:
The learned Adjudicator erred in law by finding that where a window is located in a boundary structure, between a lot and common property, the enlargement of that window does not involve the disposition of an interest in common property.
- Because this is an appeal from an adjudication, s.289 of the Body Corporate Community Management Act (“BCCM Act”) provides that:
- (2)The aggrieved person may appeal to the appeal tribunal, but only on a question of law.
- Under s.146 of the Queensland Civil & Administrative Tribunal Act (“QCAT Act”) where there is an appeal on a question of law, the appeal tribunal can confirm or amend the decision; set aside the decision and substitute its own decision; set aside the decision and return the matter for reconsideration with or without a further hearing or make any other orders it considers appropriate.
- Section 161 of the Standard Module replicated what is set out in s 154 of the Body Corporate and Community Management Act (“the BCCM Act”). To assist in determining what is meant by ‘interest in……common property”, it is appropriate to set out the relevant parts of s 154.
Disposal of interest in and leasing or licensing of common property
- (1)This section sets out the way and the extent that the body corporate is authorised—
- to sell or otherwise dispose of common property; and
- to grant or amend a lease or licence over common property.
- (2)The body corporate may—
- if authorised by resolution without dissent—
- sell or otherwise dispose of part of the common property; or
- grant or amend a lease or licence for more than 10 years over part of the common property; and
- if authorised by special resolution—grant or amend a lease or licence for 10 years or less over part of the common property.
- if authorised by resolution without dissent—
- (3)Also, the body corporate may grant or amend a lease or licence over the whole of the common property if the body corporate is authorised to lease or license the land by—
- for a lease or licence for more than 3 years—a resolution without dissent; and
- for a lease or licence of 3 years or less—a special resolution.
- (4)Despite subsections (2) and (3), the body corporate may grant or amend a lease or licence over part or the whole of the common property, without the authority of a resolution without dissent or special resolution, if the community management statement provides for the lease or licence.
- (5)The body corporate must not lease or license common property if—
- the lease or licence would interfere with access to a lot, or to a part of the common property over which exclusive rights have been given under a by-law; or
- the common property leased or licensed is land a person has the right to occupy for the person’s engagement as a service contractor or authorisation as a letting agent.
- (6)An instrument lodged for registration under the Land Title Act 1994 to give effect to a transaction under this section must be accompanied by—
- a certificate under the body corporate’s seal certifying the transaction has been authorised as required by this section; and
- a certificate of the relevant planning body certifying the transaction has been approved or noted as required under the relevant Planning Act; and
- if the transaction is associated with a reduction in the common property—a request to record a new community management statement for the community titles scheme in the place of the existing statement for the scheme.
- The work necessary to install the enlarged window has been carried out. The question of law that arises in this appeal is whether, as a matter of construction, the removal of masonry rubble of the windowsill to make way for the new enlarged window resulted in a disposal of the lot owners’ interest in part of the common property. If so, then the resolution would need to pass without dissent.
- It is not controversial that in the process of enlarging the window a section of the common masonry wall below the window had to be removed to make allowance for the enlarged window. The extent to which the windowsill was to be lowered is shown on the construction floor plan which includes a cross-section of the windowsill. The masonry windowsill was lowered by about 400mm leaving a new windowsill height of 600mm. Also on the floor plan itself there is a notation which states: “lower windowsill and replace window”. By reference to the floor plan the length of the windowsill to be removed seems to be about 6.95 metres. This means that about .278m2 of brick and mortar masonry was removed and then replaced with glass. Obviously, it was necessary to dispose of the masonry, part of which , say 50%, at least was common property.
- The effect of the removal of the masonry and the lowering of the windowsill changed the façade of the building. This is observed in the pictures of Aquarius on the construction drawings prepared by TPG Architects, drawing WD30. It is obvious from the pictures that whereas before the change there is a consistent windowsill level across the top floor, the proposed change to Lot 83 interrupts this consistent line with the lower windowsill. The windowsill line drops down along the length of the window of lot 83. Attachment A is a copy of a before and after image of the façade of Aquarius.
- As part of the masonry windowsill was on the external façade of the building, the delineation of lot 83 and the common property is the mid-point between the external wall and the internal wall, therefore the masonry removed from external wall is common property. As a result Dansur submits that as there has been a disposal of part of the common property.
- Dansur makes a number of submissions in support of the appeal. It relies on the definition of “dispose” in the Butterworths Concise Australian Legal Dictionary, however the fact that here has been a disposal of the existing masonry is not disputed. The question arises that having replaced the masonry with the window glass and the frame what then is the “interest” that is said to have been disposed of. The Bugeja’s contend that the common property remains but in a different form, that is the air space between the glass surface and the notional external building façade line.
- Dansur also relies on what was said in Katsikalis v Body Corporate for The Centre.10 In that case it was held that as the extension of bulkheads of a lot in retail premises over the air space of the common property will be enjoyed exclusively and indefinitely by the lot owner, this resulted in a loss of that space/common property to the lot owners and therefore amounted to a disposition of common property. Douglas J said at :
In this case the approvals given retrospectively show that the extensions to the bulkheads over the common property will be enjoyed exclusively and indefinitely by the lot owner. That, in my view, amounts to a disposition of that property at least by the grant of an exclusive licence to it for some indefinite period. It may also amount to a gift of the property unless it is a mere licence that would normally be revocable.
- With respect to the words “dispose”, “disposition” and “disposal” he went on to say at  that:
… even if one assumes that the transaction here was simply the creation of a mere licence that gave no interest, legal or equitable, in the common property and was revokable, the fact that exclusive possession of that part of the common property had been passed to the owner of lot 5 would, in my view, allow the conclusion that there had been a disposition of the relevant part of the common property.
- It is not contested that to install the enlarged window the Bugejas, necessarily, require exclusive use to that area of the windowsill beyond the common boundary of their lot an the body corporate’s. Prior to the renovation works being carried out the Begujas had no proprietary rights, or interest in, the masonry beyond the common boundary line. After the new window was installed they still don’t as that air space is now common property.
- Looking at the issue from the body corporate’s perspective, as the Bugejas submitted, the window glass before its enlargement constituted the common boundary line, within the boundary wall. After the enlargement, the window still constitutes the boundary line within the boundary wall, which is a common feature of apartment block construction. All that the body corporate has really lost as a result of the disposal of the masonry, is the aesthetic appearance of the building from the outside being a continuous line of windows at a uniform level. Now after the change, and from the pictures referred to above, that line is interrupted by the enlarged window.
- The Bugejas also submit that the body corporate has retained equivalent rights after the enlargement of the window, as it had prior to the installation. That is the legal entitlement to the interest, both legal and beneficial, to the space both within and outside the glass and frame of the enlarged window as this remains the same. The installation of the enlarged window did not move the common boundary and there is no encroachment of window glass or frame beyond the common boundary of the lot onto, or into, the body corporate property. In other words, the interest of the body corporate to that area that was previously taken up with the masonry of the windowsill has not been disposed of but now replaced by window. They contend that any interest to that space, whether it be masonry or glass, remains with the body corporate. This is obviously correct except that the façade is now different because the masonry has gone.
- The change, however must be considered having regard to the rights of all of the lot owners, not just the Bugejas. The community title scheme for Aquarius comprises the individual lots and the common property. The scheme is registered under the Land Titles Act and creates indefeasible title for the common property which is owned by the owners of the lots in shares proportionate to their entitlements in the interest schedule. The owners interest in the land, as defined in the Acts Interpretation Act12 is a legal or equitable estate in the land or other property or relevantly here, the common property.
- The purpose of s 154 is to only permit the disposal of a an interest in the common property, either legal or equitable interest (or both) if the relevant motion to make the disposal is passed without dissent. That is because, obviously, each lot owner is disposing of their individual interest, or part thereof, by way of sale, lease, licence or presumably gift. This is demonstrated by the need for a motion without dissent to dispose of an legal interest by lease or licence, for a fixed term. It is therefore contended by Dansur, that the disposal of the masonry removed from the windowsill for the exclusive benefit of the Bugeja’s, is a disposal of the legal and equitable interest in that material in specie. As already discussed the fact of its removal is not controversial, but does this constitute a disposal of lot owners’ legal or equitable interest in the common property because their interest in the air space remains.
- Dansur relies on a decision of an adjudicator in Diane. The circumstances of that case are similar to what occurred here in that the owners of lot 4 sought the body corporate’s approval to install a new window, the same size and dimensions as the existing window, in the living room of their lot. A resolution was passed with a simple majority in favour of the lot owner to do the work. The decision was referred to adjudication before the work could be carried out. The Adjudicator found that s 154 of the BCCM Act applied. That was because, in reliance of what was said in Katsikalis, the removal of part of the façade to the building was a disposal of an interest in the common property. Also it was for the sole benefit and exclusive and indefinite use of the owners of lot 4. There is no detail in the reasons as to how the removal of the façade impacted the work or precisely what common property was actually lost. Nor was there any discussion about whether the disposal was a disposal of an interest…in common property. In other words whether just replacing part of the wall with glass disposed of part the body corporate’s interest in the common property or whether it was the loss of the façade. If it was the latter, which seems to be the case then, like Katsikalis, and Ainsworth v Albrecht15, there was a loss of the lot owners interest in the common property, which presumably was of some value.
- That then leads to a determination of what was the interest that was disposed of here. Clearly, the masonry which was common property was disposed of but could this amount to a disposal of a legal or equitable interest in the common property. There was a noticeable change to the external appearance of the building caused by the removal of part of the windowsill, although no evidence was provided as to whether this impacted the value of Dansur’s lot or other lots, as was submitted on the Begujas’ behalf. However, it is reasonable to infer that there was a clear benefit to the Begujas
- This was one of the considerations in Ainsworth in determining whether Ainsworth’s (and other’s) dissent to Albrecht’s motion to amalgamate the two decks in Albrecht’s lot. Albrecht’s lot had two separate decks with airspace between therm. It would enhance the utility of the lot if the decks could be joined or amalgamated to make one deck. To achieve this Albrecht required exclusive use of the airspace between the decks which was common property. The issue in the case was whether the dissent of some of the lot owners to Albrecht’s motion was reasonable to carry out the amalgamation. In summary, on adjudication, the adjudicator determined the issue by considering whether the dissent was reasonable on an objective basis whereas on appeal to the appeal tribunal, it was held that the dissent had to be considered from the perspective of the lot owners having regard to the circumstances of the case and whether their objecitons were reasonable. This was reversed in the Court of Appeal and the adjudicators approach was adopted. However, the High Court agreed with the appeal tribunal as to the correct approach to determining the validity of the resolution having regard to the lot owners basis for objection.
- Although Ainsworth was decided on a different point, the High Court gave consideration to some of the matters which are relevant here, that is to the loss of part of the common property. The majority said at :
It is no light thing to conclude that opposition by a lot owner to a resolution is unreasonable where adoption of the resolution will have the effect of: appropriating part of the common property to the exclusive use of the owner of another lot, for no return to the body corporate or the other lot owners; altering the features of the common property which it exhibited at the time an objecting lot owner acquired his or her lot; and potentially creating a risk of interference with the tranquilly or privacy of an objecting lot owner…..
- Although this appeal does not go to the reasonableness or otherwise of the decision at the AGM on 12 September 2019 as was the case in Ainsworth, what the above statement by the High Court does demonstrate is that a lot owner’s interest in the common property will not be taken away lightly without the lot owner’s approval. This is particularly so if it can be demonstrated that there is some demonstrable loss, not just some bricks and mortar, to an objecting lot owner to the obvious benefit of the acquirer of that interest. Also, ultimately the loss may impact a lot owners interest on the interest entitlement schedule although there is no evidence of that here.
- There is some substance to the argument that the removal of the masonry and its replacement with glass did not change the notional boundary line of the Bugeja’s lot and common property and therefore the interest of the lot owners/ body corporate remains intact. However, by doing so and reducing the height of the windowsill, the appearance of the building, its façade, as a whole has changed. This change is to the exclusive benefit of the Bugeja’s.
- Another way to approach the issue is on the basis of what occurred in Ainsworth. That is, adopting the statement of the majority in Ainsworth set out in  above, could it be said that in the circumstances here, Dansur’s dissent to motion 10 was unreasonable. If not, then logically it must follow that the passing the motion would result in a loss of the remaining lot owners’ interest in part of common property to the exclusive benefit of the Bugejas. This is particularly so when there is an obvious change to the façade of the building.
- It is argued that the Adjudicator’s finding that there was no disposition of common property was a finding of fact. Therefore, this appeal tribunal cannot and should not interfere with that finding. The difficulty with that argument is that firstly, there was in fact a disposition of the masonry which was clearly common property; and secondly, this resulted in a discernable change in the façade of the building; and thirdly, there was no consideration in the reasons as to whether that disposition amounted to a disposition of an interest in common property for the exclusive benefit of the Bugejas.
- Ainsworth, and Katsikalis have made it clear that if there is to be a disposition of an interest in common property, it must be approved by the body corporate without dissent. In the absence of a finding by the adjudicator that the disposition was disposition of an interest in the common property to the detriment of the lot owners, it is open for this appeal tribunal to do so for the reasons set out above.
- Therefore, the appeal should be allowed. There will be an order that the Adjudicator’s order of 24 June 2020 is set aside. Instead there be an order that Resolution 10 of the 12 September 2019 Annual General Meeting of the Body Corporate for Cairns Aquarius CTS 1439 is void.
 The extent of the work is set out in the adjudication  which is not relevant to this decision.
 Body Corporate and Community Management (Standard Module) Regulation 2008 repealed on 1 March 2021.
 Body Corporate Community Management Act s 36(1).
 My emphasis.
 Now s 184 under the 2021 Regulation.
 Applicant’s Appeal Book page 205.
 Ibid “detail section 023”.
 Applicant’s Appeal Book page 149.
 Land Title Act, s.49C(4). 10  2 Qld R 320.
 Land Titles Act ss 41A, 41B and 41C. 12 Schedule 1.
 And s 161 of the Standard Module.
  QBCCMCmr 585. 15 261 CLR 167.
- Published Case Name:
Dansur v Body Corporate for Cairns Aquarius CTS 1439 & Anor
- Shortened Case Name:
Dansur v Body Corporate for Cairns Aquarius CTS 1439
 QCATA 15
Member Richard Oliver
21 Jan 2022