Burrell v Body Corporate for Boulevard North CTS 9833
[2010] QDC 352
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- Burrell v Body Corporate for Boulevard North CTS 9833[2010] QDC 352
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Burrell v Body Corporate for Boulevard North CTS 9833[2010] QDC 352
Burrell v Body Corporate for Boulevard North CTS 9833[2010] QDC 352
DISTRICT COURT OF QUEENSLAND
CITATION: | Burrell v Body Corporate for Boulevard North CTS 9833 [2010] QDC 352 |
PARTIES: | CHRISTOPHER THOMAS BURRELL AND MARGARET WELLS BURRELL Appellants AND BODY CORPORATE FOR BOULEVARD NORTH CTS 9833 Respondent |
FILE NO/S: | Appeal 1590/07 |
DIVISION: | |
PROCEEDING: | Appeal |
ORIGINATING COURT: | District Court, Brisbane |
DELIVERED ON: | 17 September 2010 |
DELIVERED AT: | Brisbane |
HEARING DATE: | 3 August 2010 |
JUDGE: | McGill DCJ |
ORDER: | 1. Application to amend notice of appeal refused. 2. Appeal allowed. 3. Decision of the adjudicator of 24 April 2007 set aside. 4. Through the commissioner, refer the order back to an adjudicator, other than the adjudicator who gave the decision of 24 April 2007, with a direction to hear and determine the dispute as to the matters referred to in these reasons according to law. |
CATCHWORDS: | HOME AND COMMERCIAL UNITS – Body Corporate – By laws – exclusive use of common property – car park – space incorrectly allocated – whether correctable by ordinary resolution of general meeting. HOME AND COMMERCIAL UNITS – Management agreements – termination – requirements for – dispute over. HOME AND COMMERCIAL UNITS – Adjudication – obligation to comply with natural justice – adjudicator decided on issue not raised, and on ground not agitated. HOME AND COMMERCIAL UNITS – Adjudication – scope of jurisdiction of adjudicator – whether equitable relief of rectification available, Body Corporate and Community Management Act 1997 ss 62, 269(2)(a), 294(1). Associated Picture Houses Ltd v Wednesbury Corporation [1948] 1 KB 223 – cited. Body Corporate for Palm Springs Residences CTS29467 v J. Patterson Holdings Pty Ltd [2008] QDC 300 – applied. Joscelyne v Nissen [1970] 2 QB 86 – cited. Lillywhite v Chief Executive [2008] QCA 88 – cited. Pukallus v Cameron (1982) 56 ALJR 907 – cited. Rejfek v McElroy (1965) 112 CLR 517 – cited. Turnbull v New South Wales Medical Board [1976] 2 NSWLR 281 – applied. Westland Savings Bank v Hancock [1987] 2 NZLR 21 – cited. |
COUNSEL: | R.I.M. Lilley SC and B.G. Cronin for the appellants D.A. Savage SC and S.L. Moody for the respondent |
SOLICITORS: | Courtice Neilsen for the appellants Adamson Bernays Kyle and Jones for the respondent |
- [1]This is an appeal from a decision of an adjudicator under the Body Corporate and Community Management Act 1997 (“the Act”) made on 24 April 2007 by which she declared that a particular motion in relation to the Community Management Scheme moved at the annual general meeting of 25 February 2006 and supported by a majority of lot holders present and voting, but not passed without dissent, was defeated, and ordered that the owners of a particular lot in the building cease using a particular car parking space, vacate a common property storage space and ensure that any locks and personal items were removed from the storage space, in each case within seven days of the day of the order. By s 289(2) of the Act, a person aggrieved by a decision of an adjudicator may appeal to this court but only on a question of law. The powers of this court on appeal are set out in s 294 of the Act.
- [2]The present appellants were two of the three owners of that lot, and on 5 June 2007 the three owners filed a notice for appeal to this court from that decision. Subsequently one of the three owners died. As a result, leave to take a further step in the proceeding was required by UCPR r 72, which leave I gave on 17 May 2010. When the appeal was called on for hearing, counsel for the appellants filed by leave an application seeking leave to amend the notice of appeal, and leave to put fresh evidence before the court on the hearing of the appeal. Both of those steps were opposed by counsel for the respondent, and at the conclusion of argument of the application I reserved my decision and heard argument in relation to the merits of the appeal.
Background
- [3]The respondent came into existence on 19 November 1982 when Building Units Plan No. 5364 was registered. The lots which came into existence on the registration of the plan were initially held by the developer, Dorotea Pty Ltd, which on 25 November 1982 held the inaugural meeting as the only lot owner within the body corporate. The building contained 58 units, including two units on the top floor, one of which was larger than other units in the building. Originally the building was to comprise 59 units with three units on the top floor, but while the building was under construction the design of the top floor was changed so that two of the units became one larger unit, a penthouse, which was subsequently occupied by one of the directors of Dorotea Pty Ltd. At the inaugural general meeting, which no doubt occurred simply by the representative of Dorotea Pty Ltd executing a series of documents, the by-laws then contained in the third schedule of the Act were “added to so that the whole of the by‑laws” were as set out in a document executed by the body corporate under its common seal and by Dorotea Pty Ltd under its common seal and countersigned by two of its directors. By‑law 44 provided:
“The proprietor for the time being of each unit in the building shall be entitled to the exclusive use for himself and his licensees of the car space or spaces as are identified on the plan attached hereto and being numbered the same number as his unit.”
- [4]Attached to the document is a plan of the basement area of the building on which there are a number of rectangular spaces numbered 1 to 59.[1] On the face of it, therefore, one of the spaces on the plan was identified by the number 59 and therefore purportedly allocated by By‑law 44 to unit 59. There was no unit 59. There were units 1 to 58, and there was one numbered rectangle on the plan with the same number as each unit.
- [5]The director of Dorotea Pty Ltd who represented that company at the inaugural general meeting of the body corporate wrote to one of the appellants on 2 June 2006. He said in that letter that it was always envisaged that the two car park spaces, which would otherwise have been allocated to the original two units that were combined into the one unit on the top floor, would be allocated to the newly created penthouse unit. In response to a suggestion that car park space number 59 would be left unallocated, he said he did not recall that there was ever any intention to have an unallocated car space. Unfortunately the documentation executed did not reflect that intention. This may have occurred because of concern that people who had signed contracts to purchase units in the building might try to get out of them if there was any difference at all between the by-laws adopted and the by-laws foreshadowed in notices to purchasers under s 49 of the Building Unit and Group Titles Act 1980.[2]
- [6]Subsequently the penthouse unit was transferred by the developer to a particular company. It later came to be owned by others, and in time was purchased by the three individuals who were appellants at the time the appeal was instituted.[3] Their case, and I shall say a little more about the evidence later, is that in fact from the time when the building was first used two of the car parks had been used by the owners of the penthouse, unit 57, namely the car parks in the positions numbered 57 and 59 on the plan attached to the by‑laws adopted on 25 November 1982. At some point, the timing of which does not emerge clearly in the evidence, but prior to the time the appellants acquired the penthouse, the owners of the penthouse agreed with the owner of the other top floor unit that that unit would use the car parking space numbered 59 on that first plan instead of the space numbered 58 on that plan, and the penthouse would use spaces 57 and 58.
- [7]In the year 2000 a new Community Management Statement for the Body Corporate was registered. This followed an extraordinary general meeting of the body corporate held on 10 January 2000, attended by the owners of one unit present in person and 42 units present “by voting paper”. One of the motions put to the meeting was that it be resolved “that under s 55(3)(a) of the Body Corporate and Community Management Act 1997 the Body Corporate consents to the recording of the new Community Management Statement tabled at the meeting with this motion whereby it repeals the existing By‑law 1‑43 and replaces them with new By‑laws 1‑20 but retains the existing By‑law 45 which has been renumbered 21, and existing By‑law 44 which has been renumbered 22 in accordance with the by‑laws set out in Schedules C and E of the new Community Management Statement forwarded to owners with this motion. The Body Corporate will cause the new Community Management Statement to be lodged with the Registrar of Titles for recording in the Department of Natural Resources as soon as practicable.”
- [8]The minutes record that there were 38 votes in favour of this resolution, two against and three abstentions. Subsequently the Body Corporate under its common seal on 10 January 2000 executed the new Community Management Statement which was forwarded for registration. The Community Management Statement was duly registered. That statement includes in Schedule C a new set of by‑laws including relevantly:
“3. Vehicles
An occupier must not park any vehicle upon common property except—
- (a)with the consent in writing of the body corporate committee or
- (b)where authorised by an exclusive-use by‑law.
- Exclusive use – car spaces
The owner for the time being of each lot shall be entitled to the exclusive use for himself and his licensee of the car space or spaces identified in Schedule E and on the attached sketch plan marked ‘A’.”
- [9]Schedule E set out in order lots numbered 1 to 58. Against each was an area identified by reference to one or two letters on what was described as “Sketch A”, a plan prepared by surveyors attached to the document and identified as “plan of exclusive use area for car park and storage allocations on level A for BUP 5364 in Boulevard North CTS 9833.” Despite the surveyor’s attempts in various ways to make it difficult to compare the identification of the spaces in the new plan with the identification of the spaces in the old plan, it seems to me that in respect of each of lots 1 to 58 the area identified in the new plan corresponds to the area identified by the corresponding number in the old plan. There is, however, still no lot 59, and the space corresponding on the new plan to the space numbered 59 on the old plan is identified as space “AL” and not allocated in Schedule E.
- [10]Since the resolution amending the by‑laws was not carried without dissent, the matter presumably proceeded on the basis that the effect of the new Community Management Statement was to preserve the existing entitlements to exclusive use in relation to car parking spaces of all of the lot owners. Despite the fact that on that plan as well lot 57 was allocated only one car parking space, the owners of that lot, not at that time the appellants, continued to use two car parking spaces as they apparently always had.
Storage area
- [11]There was also a space on the plan identified as “AP (storage room) two square metres” which is also unallocated by Schedule E. This is perhaps unsurprising, since By‑law 22 refers to exclusive use of car parking spaces and plainly no car could be parked in the space identified as AP. No other exclusive use by‑law appears among the by‑laws, and in the by‑laws at present on the Community Management Statement there is no explanation for the presence of the identified areas AL and AP on the plan.
- [12]It does not appear that there was ever any by‑law which purported to give any exclusive rights to the owner of the penthouse in relation to the space identified as AP on the new plan. The appellants say that they and their predecessors in title have had exclusive use of that space, “since time immemorial” as it were, the explanation being that at one time the car parking space now identified as AO, formerly space 57, was marked in the basement as running all the way to the wall behind it, so that access to this area was available only through their car park. In fact on both of the plans[4] there is a strip between the car parking space and the wall giving access to the storage room. Although the appellants sought to defend before the adjudicator an entitlement to continue to have exclusive use of the storage space AP, no serious attempt was made before me to sustain any such entitlement.
- [13]The sketch attached to the old by-laws has no measurements and may not be to scale. On the other hand, the registered plan for Level A of the Building Units Plan No. 5364 has the car park spaces marked on it, though they are not numbered. This plan is to scale, and on it all the parking spaces appear to be the same length, though not the same width. I suspect that it is this plan which defines the dimensions of the car parking spaces, rather than the plan annexed to the new by-laws which is only for allocation purposes, and which was apparently drawn up on the basis of line markings painted on the floor rather than the registered plan. Currently, the car parking space AO is only 4.97 metres long, whereas the other car parking spaces on the plan are between 5.325 metres long and 6 metres long. These are the measurements shown on the new plan, which also indicates that the spaces have an engaging, but I suspect in practice rather inconvenient, range of widths.
Further events
- [14]It appears that the owners of the penthouse were left in quiet enjoyment of two car parking spaces until 2004, when the then manager of the building drew the attention of the body corporate to this anomaly in the car park. Legal advice was obtained, to the effect that the owners of lot 57 were entitled to only one car parking space, and the matter was raised with them. As a result they put before the annual general meeting on 25 February 2006 a resolution said to be under s 62(4)(i) of the Act, consenting to the recording of a Community Management Statement amending Schedule E so that in addition to area AO lot 57 would also receive areas AM and AP, while lot 58 would receive area AL in lieu of area AM. The resolution proposed a machinery provision to enable this to take place. The resolution was put to the vote, with the voting 24 in favour, 13 against and four abstentions.
- [15]A subsequent resolution, that the space marked AL be used for the purpose of storage and a workroom in connection with the holiday rental business,[5] was also defeated, while another resolution referring to the “car park issue” was ruled out of order. Subsequently the body corporate received legal advice to the effect that the 2006 resolution was ineffective to approve a new Community Management Statement which had the effect of giving to the owner of any of the lots additional or different entitlements to the exclusive use of any of the common property, because it had not been passed without dissent. After receiving this advice, the council of the body corporate in effect demanded that the owners of the penthouse stop using the storage area, and stop using the second car parking space. The owners resisted that, and the body corporate lodged with the Director General an application for resolution of the dispute between the body corporate and the owners of lot 57, which led to the matter coming before the adjudicator.
Submissions to the adjudicator
- [16]The respondent’s position before the adjudicator was that there had never been a valid allocation of a second car parking space to lot 57, and the space originally marked 59 in the first sketch, and marked AL in the new plan, had never been validly allocated to the exclusive use of the owner of any lot. The same applied to the storage area. Reference was made to the opinions of some lawyers, and some reference to the views of long-standing residents, although not much: it was said that one resident had some recollection of there being an unloading bay some time ago, though it is not stated which part of the car park was supposed to have been the unloading bay, and when this applied. It was said that some of the residents supported the position of the appellants.
- [17]The appellants put in a statutory declaration which went into the history of the matter and contended that there had been an error in 1982 which had been perpetuated when the Community Management Statement in 2000 had been registered. It was said that there had been an error made by the unit administration company in 1982 in failing to recognise that the enlarged unit 57 was supposed to have two car parking spaces, as confirmed by the director of the developer who had originally occupied that unit. That the penthouse was to have two spaces was supported by the fact that car parks 29 and 30 showed traces of the word “penthouse” having been painted across them. This provides I suppose some confirmation that the penthouse was intended to have two car parking spaces, though these are not the two car parking spaces allocated in 1982.[6]
- [18]The appellants purchased their unit in July 2002. They had previously owned another unit in the building since 1994, and one of them had owned a half interest in the other unit on the top floor since 1993. During this time they had observed that the penthouse unit had enjoyed the use of two car parking spaces and the small storage area which opened off one of them. They submitted a statutory declaration from a previous owner of unit 57 to the effect that that unit had been owned by that person’s family since 1987 and they had always had the use of two car parking spaces and the storage area during that period. The storage area was enclosed for security purposes in about 1989.
- [19]The appellants said that the use of two car parking spaces was fundamental to their decision to purchase the unit in 2002. The appellants also submitted that the truncation of the length of the car parking space for lot 57, which occurred in January 2000, was not authorised, and was not in conformity with the car park markings which had remained unaltered for 25 years. Given that the Community Management Statement in 2000 was not approved by a resolution passed without dissent, it would not have been effective to vary the areas in respect of which exclusive use had been given by the previous by-laws. Presumably it was treated as effective to register a new Community Management Statement because it was regarded as preserving the existing rights under the previous by-laws in relation to car parking spaces. It does not seem to me therefore that it could have been possible for whatever car parking space was in fact allocated by the previous by-law to have been effectively truncated in the year 2000.
- [20]There was also a statutory declaration from a surveyor who was a director of the firm who prepared the sketch plan in January 2000 that was used for that Community Management Statement. He expressed the opinion that that sketch plan did not accurately reflect the layout of the car park in the area of the basement, and the surveyor in preparing the plan in January 2000 had truncated the area of car park AO on the sketch plan. He prepared a new plan which was similar to the 2000 plan, which was put before the adjudicator, which does not provide for a walkway between car park space AO and the wall.
- [21]The solicitor who handled the matter for the body corporate, on the instructions of Australian Unit Administration Pty Ltd and the Body Corporate Manager, in 1999 in connection with the registration of the new Community Management Statement wrote to the commissioner pointing out that neither he, the committee at the time, nor the body corporate manager picked up that there had been an error in the allocation of the car parking spaces, and following an inspection of the building, also expressed the view that the storage space adjoining the car park for lot 57 was not accessible other than through the car space. Accordingly he supported the position of the appellants.
- [22]The position of the appellants before the Tribunal was that there had been a mistake and that it was appropriate to correct the original error by registering a new Community Management Statement. In paragraph 21 of a statutory declaration provided by one of the appellants in March 2007, he said that there was nothing new in the material submitted with the application by the committee and continued:
“On the just and equitable ground, I am not aware of any supporting evidence relied on by the committee to assert that it is in the best interests of all unit owners for the car parks including the storage alcove to revert to unallocated common property. It is not a case of the owners of unit 57 acting against the interests of other owners. It is simply an unfortunate error which needs to be rectified.”
- [23]A number of other submissions were received, from the owners of:
- unit 58, the other unit on the top floor, supporting the appellants. She also indicated that she had never heard of any suggestion of there being a drop off space in the basement in the early days, although prior to the sale of all the units there could well have been vacant car parks which could have been used in that way. She supported the position that the Community Management Statement in 2000 contained an error, and in relation to the storage area.
- unit 3, who had owned that unit for 20 years, also said that lot 57 had always had the use of two car parking spaces and the storage space and that that had always been accepted as correct by the unit owners in the building.
- unit 8, that it would be fair and reasonable and good sense and to no-one’s disadvantage to regularise the irregularity.
- unit 12, supporting the appellants.
- an unidentified unit, supporting the appellants, although apparently on the basis that unit 57 occupied the entire top floor.
- another unidentified unit, which simply expressed a belief that there should be one car space per unit, and that their understanding when they purchased the unit was that there was no storage space in the car park allocated to anyone.
Adjudicator’s reasons
- [24]As noted by the adjudicator, the respondent did not avail itself of the opportunity to obtain and respond to the submissions received, including from the appellants. The adjudicator summarised the submissions received and determined that the key issue was whether the appellants were entitled to exclusive use of car park space AM and storage space AP, or whether they are breaching the by-laws by using those spaces. The adjudicator referred to the history of the matter and in paragraph 26 expressed difficulty with the claim that the Community Management Statement registered in 2000 “was seen as simply a restatement of the previous rights and responsibilities to comply with the new legislation and that no changes were allowed.” By‑law 44 was reworded[7] and a redrawn plan was attached, but the plan was before the owners when they consented to it and there was no evidence that the statement changed between the time the owners voted and when it was registered.
- [25]That, with respect, misses the point that the resolution to approve that Community Management Statement was not passed without dissent, and accordingly it could not have been effective to change the rights of exclusive use existing under the previous by-laws. It can have proceeded to registration only on the basis that it did not change the existing rights. Although the wording of the new by-law dealing with exclusive use of car spaces is different from the old by-law, its effect was the same, and the process of identification of car park space with unit carried out by the new schedule and the new plan was the same as that in the plan attached to the previous by-laws. The only aspect that becomes problematic, it seems to me, is the question of whether the dimensions of the exclusive use areas have been in some way changed as a result of the registration of the statement which incorporates a plan which specifies dimensions, but which appears to me not to be in that respect consistent with the plan of the car park in the Building Units Plan. This was a point not decided by the adjudicator, although she was aware of it, and not the subject of submissions before me, and all I say about it is that it does not seem to me that the current adjudication decision has affected that point.
- [26]The adjudicator then considered various aspects of the argument of the appellants. The adjudicator rejected the notion that the failure to allocate spaces AL and AP was evidence of an error, on the basis that the body corporate would not necessarily allocate all identified spaces in a car and storage area. That is so, but it does not deal with the purported allocation in 1982 of a car parking space to lot 59 which did not exist, a point which was not mentioned by the adjudicator. The adjudicator rejected the argument that the inconsistency between the line markings and numberings and the plan was proof of an error in the plan. I agree that ultimately the issue of what exclusive rights exist does not depend on the line markings, but the markings in place are relevant to the question of how the car parking space is actually being used, and what the intention was at the time they were put there. The evidence that in fact two car parks were being used by the owners of lot 57 was dismissed in the same way, on the basis that that usage may have been in error rather than the plans being in error.[8]
- [27]There is then a reference to the letter from the director of the developer, which was said to be “helpful” but not “conclusive proof”. The adjudicator referred to an absence of evidence in the titles record that the director had ever acquired the lot, and noted that he was not the only director of the development company and that it did not follow that all the directors shared his view. The adjudicator said:
“Fundamentally, without a clear documented decision or statement of intention of Dorotea Pty Ltd or the body corporate at the time, I am not satisfied that sufficient evidence exists to displace the presumption that body corporate’s intentions were accurately recorded in By‑law 44.”
- [28]It seems to me that clearly sets the bar too high. People who make mistakes rarely generate contemporaneous documented declarations of the fact that they have made mistakes. People who make mistakes are ordinarily not aware that they have made mistakes, otherwise they either would not have made the mistake in the first place or would have promptly rectified it. Nor do people generally sign contemporaneous statements of what they intend to achieve by particular documents they sign, unless there is some special reason to do so, since the document itself stands as evidence of their intention. Approaching the matter in that way is close to saying that it will never be possible to prove that there was a mistake. That in my view is unreasonable.
- [29]The ordinary rule in civil matters is that the standard of proof is on the balance of probabilities, although depending on what has to be proved, a tribunal may be cautious about making a finding even by that standard.[9] For example, it has been said that the equitable remedy of rectification requires convincing proof that the document in question does not reflect the intention of the parties.[10] That is different from “conclusive proof”. There is no principle that rectification will be granted only if there is contemporaneous documentary evidence of the true intention of the parties.
- [30]There is also a natural justice point here. The evidence of the former director was disregarded or discounted as a result of the absence of reference to his name in title records. The appellants sought to put before the court on appeal as fresh evidence company records demonstrating that the director concerned was associated with the company which became registered proprietor of lot 57 after Dorotea Pty Ltd. This is not strictly speaking fresh evidence in the appeal, it is something which demonstrates that if the adjudicator had complied with the requirements of natural justice,[11] and raised this point with the appellants before deciding the case against them in part on the basis of it, the appellants could have adequately met the point. That evidence really serves to demonstrate that the failure of the adjudicator in this respect to comply with the requirements of natural justice has had some adverse effect on the appellants in this matter, because it has led the adjudicator to proceed, at least in part, on a misapprehension of the true position. For that reason, the evidence is admissible.
- [31]There is also the point that there is no particular reason to doubt the proposition that the director at the time was stating the views of the directors generally. That would be, in my opinion, the ordinary interpretation of a statement from one of the directors as to the intention that existed at the time. Unanimity among corporate directors is in practice the rule rather than the exception, and in my opinion a more realistic approach would be to assume that the views of a director reflect the views of the company, in the absence of evidence of some difference of opinion. It seems to me that paragraph 34 contains some defective reasoning as well as a failure to comply with the principles of natural justice.
- [32]In paragraph 35 the adjudicator appears to have identified correctly that the current Community Management Statement simply restated the exclusive use entitlements as shown in the previous plan, although she referred to the “amended sketch plan” as though in some way that plan did have the effect of changing those exclusive use entitlements. Ultimately the adjudicator did not consider that the respondents had presented sufficient evidence to substantiate that an error occurred in the original by-law or the Community Management Statement. The adjudicator went on to say, however, that even if there were an error the adjudicator did not consider that the proposed Community Management Statement could be approved by an ordinary resolution. This was because the process of correcting the error would still involve a change to the exclusive use allocations which would change the substance of the Community Management Statement and a resolution without dissent would still be required.
The interpretation of s 62
- [33]On that point, as to the correct interpretation of s 62, I respectfully agree with the adjudicator. There is no provision in subsections (4) or (6), which provide exceptions to the requirement in subsection (2) that the consent be in the form of a resolution without dissent, which in terms applies in circumstances where the amendment is to correct an error. The adjudicator said that some minor errors which did not have the effect of changing the substance of what was recorded in the statement could be corrected under subsection (4)(i), which removed the requirement of a resolution without dissent or special resolution if the new statement differed from the existing statement only to the extent necessary for “reproducing the existing statement without any change of substance”.[12]
- [34]The position seems to me that, despite the intention of the developer at the time, in fact what was done was to allocate only one car parking space to lot 57. That does, on the evidence that I have seen, look like an error at the time, bearing in mind the following:
- (a)Enough car parking spaces were provided on Level A for 59 lots, which was the original intention, though ultimately there were only 58 lots, with two of the planned lots being combined to make one large lot on the top floor, a “penthouse”.
- (b)The original plan purported to allocate one space to a non-existing lot. That was necessarily an error, so there is no doubt that the original allocation was in error in this respect. The only question could be as to the true intention of the true owner of all the lots.
- (c)One would expect a penthouse to have additional car parking space, so the natural thing in those circumstances would be for the “spare” car park to be allocated to the penthouse unit. The fact that \the penthouse was going to be occupied by a director of the developer merely serves to emphasise the probabilities that, if there was a spare car park available, it was highly likely to be dealt with in that way. To my mind, the evidence of the director merely serves to confirm what I would have expected in any case.
- (d)The overwhelming preponderance of evidence is that thereafter the owners of lot 57 in fact used two car parking spaces.
- (e)The car parks were laid out and marked up for two car parking spaces to be allocated to the penthouse. Originally the word “penthouse” was painted across two spaces, and two of the spaces have been identified by the number “57”, at least for a long time.
- [35]The evidence strongly suggests that in 2000 when the new Community Management Statement was approved the intention was simply to reproduce in the format required under the new Act the existing provisions in relation to car parking. Nobody seems to have realised at that time that the effect of doing this was not to give two car parking spaces to lot 57. Ordinarily one would have thought that the solicitor who was responsible for preparing the document would have realised the true situation, but the letter from that solicitor indicates to the contrary and there is no reason to reject what was said in that letter.
- [36]The position under the statute, however, does not depend on the existence of an error. It depends on whether there is any change of substance from the existing management statement. Subsection (4)(i) could be used for correcting some kinds of errors, but only errors which do not change the substance of what was provided. In other words, if despite the existence of any such errors on its true interpretation the previous document would have been interpreted as having the same effect in substance as the new document, the change does not produce a change in substance, but merely removes what might otherwise have been difficulties in the easy interpretation of the document. In that way, errors can be corrected, but only if the correction of the errors does not produce a change of substance.
- [37]A change of substance will be effected if there are changes in the legal rights of the parties as a result of the new Community Management Statement, such as by changing the entitlement to exclusive use of part of the common property, even if the effect of that change is merely to bring those rights into line with the rights that people were intended to have as a result of something that was done previously, or the rights that (if it be the case) everybody thought they had as a result of something which had been done previously. That is a question as to the scope of s 62(4)(i), and I do not consider that there was any error of law on the part of the adjudicator in concluding that this Community Management Statement was not validly approved by the majority at the general meeting in reliance on that provision. It follows that, for this error to be rectified by the body corporate in general meeting, in my opinion a resolution without dissent was required.
The real issue
- [38]The adjudicator then in paragraph 37 said:
“While I have found that the [appellants] have no legal entitlement to the exclusive use of space “AM”, adjudicators are empowered to make an order that is ‘just and equitable in the circumstances’. I have considered whether it would be just and equitable to grant exclusive use of space “AM” to the respondents in recognition of their long-term use of this space, the (albeit inconclusive) indications of an intention to grant use of two spaces to that lot, and the acceptance by the body corporate and other owners of that usage over a long time. On balance, however, I do not consider this outcome would be just and equitable for all owners.
All owners since 1982, including the respondents, were or should have been aware of the by-laws and were able to inform themselves regarding the entitlements of each lot. There is no ambiguity or inherent unreasonableness in the allocations. Without any clear evidence that owners ever intended otherwise, I do not consider that there is any justification to interfere with owners’ decisions regarding the allocation of common property. For a long period of time the respondents have had the benefit of a car space which they were not entitled to and I do not consider it appropriate to legitimise that use because of the time elapsed and the lack of previous body corporate action.”
- [39]It seems to me that the adjudicator here identified what was the real issue for determination in relation to this application. The adjudicator was entitled to make an order for the lodgement of a request for the recording of a new Community Management Statement which would have the effect of correcting the error, at least in relation to the car parking space. If that order were made, no resolution without dissent or special resolution was required: s 62(4)(b). The difficulty is, however, that it is not clear that anybody else had identified that this was the real issue. There was no application by the appellants for any such order, either by filing a separate application in relation to the dispute themselves, or even by clearly seeking such an order in the submissions made by them in response to the respondent’s application.
- [40]There was some question about the jurisdiction of the adjudicator to make such an order. It does not follow that an adjudicator is entitled to make such an order simply because he or she thinks it is a good idea. In Body Corporate for Palm Springs Residences CTS29467 v J. Patterson Holdings Pty Ltd [2008] QDC 300 I held that s 276 of the Act does give an adjudicator the power to grant equitable relief or relief on equitable grounds, but does not give the adjudicator a discretion to set aside a decision taken in accordance with the mechanism established under the Act simply on the basis that he or she disagrees with it. It is not simply a question of whether the particular outcome would be just and equitable in accordance with the subjective view of the adjudicator. It follows that the question is not simply whether an adjudicator thinks that the appellant should get an extra car parking space; it would be necessary to show that there was a proper basis on equitable grounds for such an order being made.
- [41]I accept that rights to exclusive use of the common property, which are the subject of fairly close restriction under the statute, would not readily be varied by adjudicators, but obviously the statute contemplates that such an order can be made. One example is under paragraph 10 in Schedule 5, which could apply to a motion to approve a Community Management Scheme which included a provision for exclusive use. I do not, however, consider that that is the only appropriate example; paragraph 2 refers to an order that the body corporate lodge a request to record a new Community Management Statement regardless of whether the body corporate consents to the recording, and that power, which matches the provision in s 62(4)(c), could also be used in an appropriate case. In any case, none of the orders in Schedule 5 act as limitations on the power otherwise conferred on the adjudicator under s 276: subsection (3).
- [42]There is, however, a well-recognised equitable doctrine which can be called in aid here, the doctrine of rectification of instruments. It is well established that in many cases where a written formal document embodies a mistake, the document may be rectified by a court of equity.[13] The basis of the doctrine is that the document, which was brought into existence to give effect to the intention of the parties, did not accurately reflect that intention. Commonly the doctrine is applied in relation to written instruments inter partes, usually contracts, and most of the statements in relation to its operation apply in that context.[14] It may be a little more difficult to apply here in relation to what happened in 1982 where all of the units were owned by the same company, Dorotea Pty Ltd, but it seems in principle that all that is required is that there be an intention on the part of that company to produce a particular result which by mistake the written documents did not reflect.
- [43]For reasons that will become apparent in a moment, I do not want to say too much about the operation of the doctrine, but in an analogous situation it may well have been open for the appellants, as successors of Dorotea Pty Ltd in title to unit 57, to call in aid that doctrine for the purpose of rectifying the by-laws. If it is necessary to consider also whether rectification should be applied in the context of what occurred in 2000, it may not be difficult to conclude that the common intention in bringing into existence the new management statement was, in respect of car parking, to reproduce the existing rights under the existing by-laws.[15] In these circumstances, if rectification would have been available had the original by-laws still been in force, it may well be just and equitable to grant rectification in respect of the current by-laws.
- [44]Counsel for the respondent submitted that this issue was not considered by the adjudicator, and that the adjudicator had not heard submissions on it, particularly from the respondent. I have no difficulty with the latter proposition, but it seems to me that the clear meaning of the two paragraphs which I have cited is that the adjudicator not only identified this as the real matter in issue, but decided it and decided it adversely to the appellants. That the respondents were not given the opportunity by the adjudicator to make submissions on it was a breach of natural justice but of no consequence as far as the respondent was concerned since the decision was favourable to the respondent. But it is, I think, of concern to the appellants, particularly because to some extent the decision was based on a rejection or discounting of the evidence of the director of the developer, on the basis of rejecting his statement that he went into occupation of the premises, on a basis of an assumption which could have been shown to be wrong by the appellants if they had been given the opportunity to do so. Essentially, it seems to me that what has happened here is that, apart from that breach of natural justice, there was a more fundamental breach in that the adjudicator, having identified the real issue, then did not give the parties the opportunity to make proper submissions in relation to that real issue before deciding it.
- [45]That in my view is a clear and significant error of law, one which justifies setting aside the decision of the adjudicator. It is not necessary for me to comment further on the reasoning process exposed in the passage which I have quoted, though it will be apparent from what I have said previously that it seems to me that it missed the point. Given that the decision is to be set aside anyway, it is unnecessary to consider whether it was infected with Wednesbury unreasonableness,[16] or whether there was a failure to apply established principles in relation to the equitable remedy of rectification.[17]
- [46]The adjudicator went on to deal with the use of the car space AL by lot 58,[18] and the exclusive use of storage space “AP”. It is I think sufficient to say that there is no error of law demonstrated in relation to the former, and for the reasons that I have given I think there is no basis to interfere with the decision in relation to the latter. The adjudicator then went on to conclude, appropriately on the view adopted by the adjudicator, that there had been breaches of the by-laws by the appellants. The adjudicator did not decide the question of whether space AO had been truncated in 2000, but commented in paragraph 54 that if the space was truncated the appellants had not presented any evidence that this was not done intentionally. I think that missed the point that the resolution approving this statement was not passed without dissent and therefore it was not effective to grant any exclusive use, or deprive a person of any exclusive use which previously existed. It seems to me therefore that the dimensions on the plan which became part of the Community Management Statement in 2000 are of really no consequence, and that the real issue is what was allocated in 1982.
Application to amend
- [47]Given that the decision of the adjudicator is to be set aside anyway, the application to amend the notice of appeal is probably hypothetical, but I should deal with it in any case on a precautionary basis. The function of the amendment was to permit the appellants to advance an argument that the adjudicator had erred in ordering that the motion to record the new Community Management Statement had failed to pass, which involved a breach of the rules of natural justice in that, even if that resolution was insufficient to authorise a consent for the purpose of s 62 of the Act, it nevertheless amounted to a resolution granting the owners of lot 57 the authority of the respondent to park vehicles on that part of the common property which was described as car park space AM. The other ground was a consequential argument also based on the proposition that the effect of the resolution was to authorise that use of that space. That application was opposed on the ground that the arguments had not been advanced before the adjudicator.
- [48]It seems to me, having considered the material put before the adjudicator by the appellants, that it is correct to say that this is not an argument which was advanced before the adjudicator. There is also the difficulty that the motion that was put to the general meeting was specifically and expressly a motion to consent to the recording of a Community Management Statement in a way which would amend Schedule E. It was not carried as a resolution without dissent and was therefore not effective to consent for the purpose of s 62(2) of the Act. It did not purport to be a grant by the body corporate of permission to occupy, presumably on a non-exclusive basis, a particular car parking space.
- [49]In addition, it would have been contrary to By‑law 3, which prohibited parking a vehicle on the common property except with the consent in writing of the body corporate committee or when authorised by an exclusive use by-law. It follows that the resolution, even if it had purported to be a resolution of the body corporate authorising the owners of lot 57 to park on part of the common property, would not have been effective as it was contrary to the by-laws. In those circumstances, an argument based on the proposition that the resolution of 25 February 2006 gave consent to the appellants to park in car park space AM could not have assisted the appellant anyway. There is therefore not point in giving leave to amend the notice of appeal and that application is refused.
Disposition of appeal
- [50]The real matter in issue, whether there should be an order to rectify the Community Management Statement, remains to be decided. The next question is whether it is appropriate for me to decide it myself, or to remit it to an adjudicator to determine. Under s 294, as it existed at the time when the appeal was instituted, in deciding an appeal the District Court may set aside the order and substitute another order[19] or through the commissioner refer the order back to the adjudicator with appropriate directions having regard to the question of law the subject of the appeal. That suggests that either course is available. On the other hand, the appeal to this court is only an appeal on a question of law: s 289(2). There is no general appeal to this court on the merits, and the appeal is not by way of rehearing. In those circumstances, the ordinary result that follows, if the court decides that there is an error of law, is to refer the matter back to the decision maker to hear and determine the matter according to law;[20] it should substitute its own decision for that of the adjudicator only if as a matter of law only one decision was open on the material before the adjudicator.
- [51]Accordingly, in my opinion, the appropriate course is for me to refer the order back to an adjudicator with a direction to hear and determine the question of whether the adjudicator should make an order requiring an amended Community Title Statement to be prepared and lodged which would give the proprietor of lot 57 an exclusive right to use the car park space AL on the basis that this rectified the instrument so as to reflect the intention of the original owner of the lots at the first meeting. All appropriate parties should be given the opportunity to make submissions and put in further material in relation to this issue. It would also I think be appropriate in that investigation to determine whether the current diagram of car parking spaces correctly reflected the entitlements of lot owners to car parking space under the previous by-laws and if not, what effect this had on the validity of the registration of the Community Management Statement in 2000 insofar as it purported to confer rights of exclusive use. In effect, this would determine what has been referred to as the truncation issue. It may be appropriate for a different plan to be substituted for the current plan.
- [52]In Palm Springs Residences (supra) I expressed the view that, notwithstanding the use of the expression “the adjudicator” in s 294(1)(c), the court can order that the matter be heard and determined by a different adjudicator. In all the circumstances, in the light of the deficiencies in the reasoning to which I have referred in these reasons, I think it would be appropriate in this case to make a similar order.
- [53]Accordingly, the orders that I make are as follows:
- Application to amend notice of appeal refused.
- Appeal allowed.
- Decision of the adjudicator of 24 April 2007 set aside.
- Through the commissioner, refer the order back to an adjudicator, other than the adjudicator who gave the decision of 24 April 2007, with a direction to hear and determine the dispute as to the matters referred to in these reasons according to law.
- [54]I suspect that the respondent should pay the appellant’s costs of the appeal to be assessed, and the appellants should pay the respondent’s costs of the application to be assessed; however, I will hear submissions in relation to costs when the reasons for judgment are delivered.
Footnotes
[1] There are also various spaces of other shapes and sizes which are not numbered.
[2] See s 49(4)(b). By the completion of this project, the market for home unit “futures” on the Gold Coast had collapsed: Dorotea Pty Ltd v Christos Doufas Nominees Pty Ltd [1986] 2 Qd R 91 at 93.
[3] It is convenient to refer to them as the appellants.
[4] And on Level A of the Registered Building Unit Plan No. 5364.
[5] This explains why the issue was raised by the manager of the units in the first place: see the submission to the adjudicator from the owner of lot 58.
[6] This word may have been painted on when the line marking was done but before the spaces were allocated and numbered.
[7] The adjudicator described it as “substantially rewritten”; I can detect no difference in substance from the old By‑law 44, although the wording is different.
[8] That was also an error: it was evidence from which an inference could be drawn as to the behaviour of the original owner, which, because it was associated with a director of the developer, was evidence of the intention of the developer: Westland Savings Bank v Hancock [1987] 2 NZLR 21, where something similar was said to be “strong evidence”: p 31, citing older authority.
[9] Rejfek v McElroy (1965) 112 CLR 517 at 521-2.
[10] Joscelyne v Nissen [1970] 2 QB 86 at 98; Pukallus v Cameron (1982) 56 ALJR 907 at 909.
[11] The adjudicator was required to observe natural justice: Act s 269(2)(a).
[12] That, for example, would have covered the change from old By‑law 44 to new By‑law 22.
[13] Meagher, Gummow and Lehane “Equity Documents and Remedies” (3rd edition, 1992) p 671. The doctrine extends to rectification of a deed of settlement, which can be a unilateral act.
[14] See for example the general statement as to the requirements for rectification in Pukallus v Cameron (1982) 56 ALJR 907 at 909.
[15] That seems to have been the view of the adjudicator at para [35].
[16] As the appellants argued, relying on Associated Picture Houses Ltd v Wednesbury Corporation [1948] 1 KB 223. See also Lillywhite v Chief Executive [2008] QCA 88 at [19]-[27].
[17] Compare what I said in Palm Springs Residences v J. Patterson Holdings Pty Ltd [2008] QDC 300 at [98]-[100].
[18] Lot 58 was allocated space “AM” but had been using space “AL” under an arrangement with the owners of lot 57.
[19] Which the adjudicator would have had jurisdiction to make: subsection (2).
[20] Turnbull v New South Wales Medical Board [1976] 2 NSWLR 281 at 297.