Douglas v Pegasus Equity Pty Ltd as Trustee [2015] QCATA 184

CITATION: Douglas v Pegasus Equity Pty Ltd as Trustee [2015] QCATA 184 PARTIES: Alex & Gail Douglas as Trustee for Kingfisher Super Fund (Appellant) V Pegasus Equity Pty Ltd as Trustee for Pegasus Property Trust (Respondent) APPLICATION NUMBER: APL166-15 MATTER TYPE: Appeals HEARING DATE: 4 November 2015 HEARD AT: Brisbane DECISION OF: Senior Member Stilgoe OAM Member Hughes DELIVERED ON: 16 November 2015 DELIVERED AT: Brisbane ORDERS MADE: 1. The appeal is dismissed. 2. Alex & Gail Douglas will file submissions on costs by 30 November 2015; and 3. The Tribunal will determine the issue of costs on the basis of the material filed and without an oral hearing not before 1 December 2015. CATCHWORDS: APPEAL – BODY CORPORATE AND COMMUNITY MANAGEMENT – STANDING - NATURAL JUSTICE - whether standing to appeal – whether appellant ‘aggrieved by the order’ – whether appellant as individual lot owner affected over and beyond other lot owners - where appellant’s lot not adjacent to nor affected by awnings – whether body corporate had obligation to maintain common property – whether improvements made by lot owner - where findings open on evidence - whether orders ‘just and equitable’ – where orders went further than those sought and do -- 1 of 9 -- 2 not reflect conclusion from evidence – where Tribunal unable to change orders because appellant did not have standing - whether reasons adequate – where reasons set out grounds for findings - whether requirements of natural justice met – where matter of statutory construction – where Adjudicator allowed Appellant to make submissions consistent with objects of Act and nature and demands of low cost jurisdiction Body Corporate and Community Management Act 1997 (Qld), ss 4, 36, 269, 271, 289 Body Corporate and Community Management (Accommodation Module) Regulation 2008 (Qld), ss 157, 162 Queensland Civil and Administrative Tribunal Act 2009 (Qld), s 28 Australian Broadcasting Tribunal v Bond (1990) 170 CLR 321 Brisbane City Council v Valuer General of Queensland (1978) 140 CLR 41 Drew v Bundaberg Regional Council [2011] QCA 359 Edwards (Inspector of Taxes) v Bairstow & Anor [1955] 3 All ER 48 Fox v Percy (2003) 214 CLR 118 Hurley & Anor v Body Corporate for Chelsea Coolum Beach [2011] QCATA 067 Kioa v West (1985) 62 ALR 321 QUYD Pty Ltd v Marvass Pty Ltd [2009] 1 QdR 41 Slater v Wilkes [2012] QCATA 12 Soulemezis v Dudley (Holdings) Pty Ltd (1987) 10 NSWLR 247 Surace v Rita Commisso Enterprises Pty Ltd & Anor [2011] QCATA 271 Waterford v The Commonwealth (1987) 163 CLR 54 APPEARANCES: APPELLANT: Mr Alex Douglas appeared in person RESPONDENT: Ms Rachel De Luchi of Robinson Locke Litigation Lawyers appeared for Pegasus Equity Pty Ltd as Trustee for Pegasus Property Trust -- 2 of 9 -- 3 REASONS FOR DECISION What is this appeal about? [1] On 27 February 2015, an Adjudicator ordered the Body Corporate of Stanley Point CTS 32639 to engage a contractor to cover exterior awnings to protect lot 4 from weather and prevent the ingress of rainwater into the lot. The learned Adjudicator also ordered the Body Corporate to engage an engineer to certify the awnings upon completion. [2] Neither the Body Corporate nor the owner of lot 4 has appealed this decision. Mr Alex Douglas and Mr Gail Douglas, as owners of lot 10, have appealed the decision. Do Mr and Mrs Douglas have standing to appeal? [3] Section 289 of the Body Corporate and Community Management Act 1997 (Qld) (‘the Act’) provides the right to appeal. The section applies if an ‘aggrieved person’ is ‘aggrieved by the order’.1 [4] An ‘aggrieved person’ relevantly includes an applicant, a respondent, the body corporate, a person who on invitation by the Commissioner of Body Corporate and Community Management or adjudicator made a submission about the application, or a person against whom the order is made.2 Mr and Mrs Douglas were invited to make submissions to the original application and are therefore an ‘aggrieved person’. [5] However, they must also be aggrieved by the order.3 This is an additional requirement. Being a lot owner alone is not sufficient to show that Mr and Mrs Douglas are ‘aggrieved by the order’. This is because the Act provides that the Body Corporate may sue and be sued for rights and liabilities related to common property and also for which an entity other than the Body Corporate is occupier.4 [6] The Act therefore expressly contemplates the Body Corporate as representative of the interests of lot owners when dealing with issues that relate to common property. Allowing a lot owner to appeal by virtue of lot ownership alone would defeat the statutorily prescribed role of the Body Corporate. To be ‘aggrieved by the order’, a lot owner must therefore demonstrate that they are affected by the order over and beyond every other lot owner. 1 Body Corporate and Community Management Act 1997 (Qld), s 289(1)(c). 2 Ibid, s 289(1)(d). 3 Surace v Rita Commisso Enterprises Pty Ltd [2011] QCATA 271 at [8]. 4 Body Corporate and Community Management Act 1997 (Qld), s 36. -- 3 of 9 -- 4 [7] Mr and Mrs Douglas have not been able to demonstrate how they would be ‘aggrieved by the order’ over and beyond any other lot owner.5 The learned Adjudicator’s order only requires the Body Corporate to take action. It does not require Mr and Mrs Douglas to do anything. Their lot is not adjacent to, nor affected by, the awnings. [8] At most, Mr and Mrs Douglas may be required to contribute to any expenditure incurred by the Body Corporate to comply with the orders. This does not elevate their interest above any other lot owner, who might also be required to contribute to the costs of complying with the Adjudicator’s order. [9] Mr and Mrs Douglas are therefore not ‘aggrieved by the order’ and therefore do not have standing to appeal the orders of the learned Adjudicator. [10] The appeal can therefore be dismissed for this reason alone. However, if Mr and Mrs Douglas did have standing, we make the following observations. What are the grounds of appeal? [11] The right to appeal is on a question of law only.6 [12] Mr and Mrs Douglas submitted that the learned Adjudicator misinterpreted the Body Corporate’s maintenance obligation, did not make orders that were ‘just and equitable’, did not provide clear reasons and denied them natural justice. Did Pegasus have an obligation to maintain the awnings? [13] Mr and Mrs Douglas submit that the obligation to maintain the awnings lies with Pegasus rather than the Body Corporate because Pegasus made improvements to the awnings in 2006. [14] The Body Corporate has an obligation to maintain common property,7 while a lot owner must maintain its improvements to the common property consented to by the Body Corporate.8 [15] The learned Adjudicator’s reasons note that Pegasus denies making any modifications. He recorded that in 2006, Pegasus merely referred the water problem to the Queensland Building Services Authority, which 5 Unlike Hurley & Anor v Body Corporate for Chelsea Coolum Beach [2011] QCATA 067, where the orders under appeal required the appellant lot owner to maintain awnings deemed an improvement for the individual lot owner’s benefit. 6 Body Corporate and Community Management Act 1997 (Qld), s 289(2). 7 Body Corporate and Community Management (Accommodation Module) Regulation 2008 (Qld), r 157. 8 Ibid, r 162. -- 4 of 9 -- 5 issued the builder with a ‘Direction to Rectify’.9 The builder responded to the direction by covering parts of the awnings and resealing the windows. [16] It is therefore implicit from the Adjudicator’s reasons that he did not accept that Pegasus made improvements to the common property. This is a finding of fact. A finding a fact can only be challenged on the grounds that the true and only reasonable conclusion contradicts the determination: If the case contains anything ex facie which is bad law and which bears on the determination, it is, obviously, erroneous in point of law. But, without any such misconception appearing ex facie, it may be that the facts found are such that no person acting judicially and properly instructed as to the relevant law could have come to the determination under appeal. In those circumstances, too, the court must intervene. It has no option but to assume that there has been some misconception of the law, and that this has been responsible for the determination. So there, too, there has been error in point of law.10 [17] A finding of fact will usually not be disturbed on appeal if the facts inferred by the Tribunal, upon which the finding is based are capable of supporting its conclusions, and there is evidence capable of supporting the underlying inferences.11 No error of law arises in making a wrong finding of fact unless no evidence supports that finding.12 [18] An improvement is something that enhances the value of land.13 Taking steps to fix an existing structure is not an improvement because it does not enhance value beyond what it should have been, had the Body Corporate complied with its obligation to maintain. The learned Adjudicator’s finding was consistent with the building plans, specifications and material from the Queensland Building Services Authority. [19] The learned Adjudicator’s finding was therefore open on the evidence and we can find no error of law arising from any misinterpretation of the obligation to maintain common property. Because the learned Adjudicator did not find that Pegasus had made improvements, Pegasus had no obligation to maintain the awnings. [20] Even if the modifications in 2006 are considered improvements, Pegasus’ obligation to maintain would have been limited to those modified parts for as long as they existed. In 2013, the Body Corporate removed the modifications, thereby severing any maintenance obligation by Pegasus and returning the parties to their original position: that the Body Corporate was obliged to maintain the awnings. To put it simply, any obligation by Pegasus to maintain the awning was linked to any improvement it made in 9 Adjudicator Order dated 27 February 2015 at [29]. 10 Edwards (Inspector of Taxes) v Bairstow & Anor [1955] 3 All ER 48 at 57, per Lord Radcliffe. 11 Fox v Percy (2003) 214 CLR 118 at 125-6. 12 Waterford v The Commonwealth (1987) 163 CLR 54 at 77; Australian Broadcasting Tribunal v Bond (1990) 170 CLR 321 at 341. 13 Brisbane City Council v Valuer General of Queensland (1978) 140 CLR 41. -- 5 of 9 -- 6 2006: once the improvement was removed in 2013, Pegasus had no obligation to maintain. [21] The Body Corporate therefore has an obligation to maintain the awnings. [22] This is not an appellable error. Were the orders ‘just and equitable’? [23] Mr and Mrs Douglas contend that the orders are not ‘just and equitable’ because the orders do not reflect the orders sought in the application and will ‘produce unreasonable cost and trouble to enforce’. This is because, they say, it is highly unlikely that an awning will prevent the ingress of rainwater into lot 4. [24] The learned Adjudicator relevantly ordered the body corporate to ensure the awnings are covered to ‘prevent’ the ingress of rainwater into lot 4. However, the application sought an order requiring the body corporate to address water ingress issues by covering the awnings.14 The learned Adjudicator also analysed the evidence to then conclude that ‘there is little doubt that rainwater ingress would be alleviated by the presence of a covered awning over the footpaths adjacent to lot 4’.15 [25] Unfortunately, the final Orders do not reflect the learned Adjudicator’s conclusion and go further than those sought. Because the evidence is not capable of supporting an Order in terms requiring the Body Corporate to ‘prevent’ rainwater ingress, if Mr and Mrs Douglas had standing, we would have allowed the appeal to this limited extent. Were the reasons adequate? [26] Mr and Mrs Douglas submitted that the learned Adjudicator’s reasons are unclear, that it is not possible to accurately identify the reasons for decision and did not mention their submission. [27] The learned Adjudicator had a legal obligation to provide reasons. However, no judicial reasons can ever state all of the pertinent factors, nor can they express every feature of the evidence that causes a decision- maker to prefer one factual conclusion over another.16 An applicant for leave must show an appellable error, resulting in a substantial injustice.17 Preferring one version of facts to another, or attributing more weight to the evidence of one witness over another, if reasons address the basis for that finding, is not such an error.18 14 Adjudicator Order dated 27 February 2015 at [1]. 15 Ibid at [40]. 16 Fox v Percy (2003) 214 CLR 118 at [41]. 17 Slater v Wilkes [2012] QCATA 12 at [6], citing QUYD Pty Ltd v Marvass Pty Ltd [2009] 1 QdR 41; Drew v Bundaberg Regional Council [2011] QCA 359 at [19]. 18 Slater v Wilkes [2012] QCATA 12 at [6]. -- 6 of 9 -- 7 [28] Although the learned Adjudicator does not expressly state whether he rejected the evidence of Mr and Mrs Douglas and why, he does summarise their evidence in his reasons.19 [29] An appellable error is not demonstrated by identifying other possibilities not mentioned or not apparently considered: an Adjudicator may decide a case in a way that does not require the determination of a particular submission and can therefore be simply put aside.20 The Adjudicator may state facts without making findings on all of the issues of fact relevant to the final decision.21 [30] The learned Adjudicator’s reasons adequately set out the grounds for his finding that rainwater ingress would be alleviated by a covered awning: he refers to the original plans, subsequent complaints, and material from the Queensland Building Services Authority including a ‘Direction to Rectify’, and work orders. [31] This is not an appellable error. Have Mr and Mrs Douglas been given natural justice? [32] Mr and Mrs Douglas submit that the learned Adjudicator did not provide natural justice because they were denied the opportunity to make further submissions in response to material filed by Pegasus after their submissions. [33] Mr and Mrs Douglas were not parties to the application but, because they held a lot in the scheme, the learned Adjudicator therefore invited them to make submissions as provided for in the Act.22 [34] Pegasus’ further material did not substantially affect the nature of the application or the outcome sought, requiring more submissions. The new material simply sought orders and provided plans and specifications on how to address the water ingress. [35] When investigating an application, an Adjudicator must observe natural justice.23 However, natural justice is a flexible notion that requires considering any particular or special procedural steps that may extend or restrict what is required to afford natural justice in the exercise of a particular statutory power - it is a matter of statutory construction.24 It must therefore be commensurate with the nature and demands of the jurisdiction. 19 Adjudicator Order dated 27 February 2015 at [13], [14] and [20] to [22]. 20 Soulemezis v Dudley (Holdings) Pty Ltd (1987) 10 NSWLR 247 at 269, 270. 21 Ibid, at 272. 22 Body Corporate and Community Management Act 1997 (Qld), s 271(1)(a), (c). 23 Ibid, s 269(3)(a). 24 Kioa v West (1985) 62 ALR 321 at 346, 367-370. -- 7 of 9 -- 8 [36] In body corporate and community management applications, the Adjudicator must also act as quickly, and with as little formality and technicality, as is consistent with a fair and proper consideration of the application.25 It is also an object of the Act to provide an efficient and effective dispute resolution process.26 [37] The Office of Body Corporate and Community Management is designed to provide a low cost dispute resolution service. By allowing Mr and Mrs Douglas to make submissions as provided for in the Act, the learned Adjudicator provided Mr and Mrs Douglas with natural justice consistent with the objects of the Act and within the demands of the jurisdiction. Extending the requirements of natural justice beyond this is inconsistent with the Act and would make the jurisdiction cumbersome. [38] The Tribunal must also observe the rules of natural justice.27 Mr and Mrs Douglas filed no fewer than 40 pages of submissions supporting their appeal. Many of these overlap the submissions they provided to the learned Adjudicator. They have therefore been given an opportunity to present their case, both before the learned Adjudicator and again during this appeal. [39] Mr and Mrs Douglas have therefore been given natural justice. [40] This is not an appellable error. What are the appropriate Orders? [41] In its application before the learned Adjudicator, Pegasus sought an Order requiring the Body Corporate to address water ingress issues by covering the awnings on the exterior of the building. By requiring protection to ‘prevent’ rainwater ingress, the learned Adjudicator’s Orders went further than those sought and do not reflect the learned Adjudicator’s conclusion from the evidence. [42] In our view, the Adjudicator’s Order in Application 1013-2014 dated 27 February 2015 would correctly read: I hereby order that within 90 days of the date of this order, the body corporate is to engage a suitably qualified contractor to ensure that the exterior awnings are covered so as to provide lot 4 with protection from the weather and address the ingress of rainwater into that lot. I further order that after completion of the work, the body corporate is to engage a suitably qualified structural engineer to certify that the exterior awnings are structurally sound. [43] However, regretfully, because Mr and Mrs Douglas do not have standing, the Tribunal is unable to change the learned Adjudicator’s Orders. 25 Body Corporate and Community Management Act 1997 (Qld), s 269(3)(b). 26 Ibid, s 4(i). 27 Queensland Civil and Administrative Tribunal Act 2009 (Qld), s 28(3). -- 8 of 9 -- 9 [44] Pegasus has filed submissions seeking the costs of the appeal, including the Application for Stay pending appeal. We will also allow Mr and Mrs Douglas an opportunity to file submissions on whether the Tribunal should award costs. [45] The appropriate Orders are therefore: a) The appeal is dismissed; b) Alex and Gail Douglas will file submissions on costs by 30 November 2015; and c) The Tribunal will determine the issue of costs on the basis of the material filed and without an oral hearing not before 1 December 2015. -- 9 of 9 --