Coles v Body Corporate for Evolution Apartments CTS 38033 [2014] QCATA 21

CITATION: Coles v Body Corporate for Evolution Apartments CTS 38033 [2014] QCATA 21 PARTIES: Norman Coles (Applicant) v Body Corporate for Evolution Apartments CTS 38033 (Respondent) APPLICATION NUMBER: APL350-13 MATTER TYPE: Appeals HEARING DATE: On the papers HEARD AT: Brisbane DECISION OF: Hon J B Thomas, Judicial Member DELIVERED ON: 10 February 2014 DELIVERED AT: Brisbane ORDERS MADE: 1. The appeal is dismissed. 2. The decision of the Adjudicator dated 16 July 2013 in Evolution Apartments [2013] QBCCMCmr 288 is confirmed. CATCHWORDS: COMMUNITY TITLES SCHEMES – appeal against adjudicator's decision – levels in building where access to foyers restricted to owner-occupiers and guests – removal and replacement of signs in foyers – whether common property – whether committee had power to authorise replacement of signs – repainting authorised by AGM – need to remove signs – body corporate's right to make improvements to common property – right of committee to incur expenditure up to "basic improvement limit" – whether signs "incorporated into" common property under s 11 of BCCM – whether fixtures – whether original signs "disposed of" by body corporate – Costs – unmeritorious claim – whether "in interests of justice" to order unsuccessful appellant to pay costs -- 1 of 9 -- 2 Body Corporate and Community Management Act 1997 (Qld), s 11, s 100, s 289 Body Corporate and Community Management (Accommodation Module) Regulation 2008 (Qld), s 42, s 159, s 161 Queensland Civil and Administrative Tribunal Act 2009 (Qld), s 100, s 102 McEwen v Barker Buildings Pty Ltd [2010] QCATA 49, cited National Australia Bank Limited v Blacker (2000) 104 FCR 288; [2000] FCA 1458, cited Ralacom Pty Ltd v Body Corporate for Paradise Island Apartments No 2 [2010] QCAT 412, cited Toivanen v Body Corporate for Aspect Caloundra [2013] QCATA 248, cited APPEARANCES and REPRESENTATION (if any): This matter was heard and determined on the papers pursuant to s 32 of the Queensland Civil and Administrative Tribunal Act 2009 (QCAT Act). REASONS FOR DECISION [1] This is an appeal under s 289(2) of the Body Corporate and Community Management Act 1997 (Qld) (‘the BCCM’) against an Adjudicator's decision in a dispute between a unit owner and the Body Corporate. The appellant unit-owner will be referred to as (‘Mr Coles’). [2] An appeal under that section lies only on a question of law. [3] The dispute concerns the removal of wall rugs (‘the signage rugs’) which were formerly hung on walls facing the lifts at various levels of the building. They were replaced in early 2013 with smaller glass signs designating the floor level along with the numbers of the apartments situated on that level. This was arranged by the committee of the Body Corporate in conjunction with the repainting of the foyers in those levels. [4] Mr Coles, inter alia, sought orders to the effect that the committee had acted beyond its authority in accessing the lift foyers and removing the signage rugs and in installing the new glass signage. He also alleged that the committee had unlawfully disposed of the signage rugs and sought orders that the Body Corporate remove the new glass signage and restore the original rug signage. [5] The Adjudicator found against Mr Coles on all points and dismissed his application. [6] This appeal is against that determination. -- 2 of 9 -- 3 Facts [7] Evolution Apartments consists of 179 lots and common property. It is regulated by the BCCM and the Body Corporate and Community Management (Accommodation Module) Regulation 2008 (Qld) ("the Accommodation Module"). [8] On certain levels of the building access to the lift foyers is restricted to the owner-occupiers and their guests. Mr Coles’s unit is on such a level. [9] The Exclusive Use By-law includes the following provisions 12.1 The lots on each floor of the building other than levels BH, AK, AL and AM respectively share the exclusive use of the lift foyer on their level. 12.2 The Body Corporate is responsible for all cleaning and maintenance of the lift foyers and is entitled to access the lift foyers at any time required to carry out its duties and functions. [10] At an annual general meeting in 2012, the repainting of the foyers was duly authorised and $70,000 was budgeted for it. [11] The painting necessitated the removal of the wall rugs. [12] At a committee meeting of 14 August 2012 the following resolution was carried Resolved to approve the removal of the wall rugs and that the proposal from Southern Cross Signs be accepted to supply and install new signage on each floor at a cost of $5,580 after the painting is completed in December and further that Michael Newell be authorised to liaise with the caretaker to determine the design of the signage to be installed. [13] The Adjudicator's findings included the following The committee has expended the amount of $5,890 to replace the old rug signage with new signage. This work was carried out in connection with painting of the foyers which was authorised at an AGM. The amount of $70,000 was budgeted for this work. As the painting necessitated the removal of the wall rugs, the opportunity was taken to update the signage and this was enabled by the fact that the painting cost $63,777.55, leaving $6,222.45 for the purposes of replacing the signage which was an integral part of the project.1 [14] it should be noted in passing that there was never any issue about the slightly larger expenditure ($5,890) than the original quotation ($5,580). If it was within the committee's power to authorise the work it was also within its power to agree to a variation, provided that the overall cost did not exceed its relevant limit for expenditure. [15] The Adjudicator further found 1 Adjudicator’s reasons for judgment [10]. -- 3 of 9 -- 4 This dispute involves work undertaken by the body corporate which included patching and painting of foyer areas as well as installation of new signage. The new signage consists of a glass plate about 40 centimetres square, which bears the floor number and the numbers of those apartments located on that floor. This signage replaced the "rug signage" approximately 2 square metres in size which was previously located on that wall. 2 [16] For the present scheme the amount which the committee is entitled to spend without firstly obtaining approval by ordinary resolution was calculated at $50,120.3 [17] After their removal from the walls, the rugs were put into storage by the body corporate, where they now remain. Issues on Appeal [18] Four grounds are raised, namely 1) In relation to my "Outcomes Sought" #3, the Adjudicator erred in not considering Section 139 (2) (a) of the Accommodation Module when deciding to dismiss this outcome sought. The body corporate had certain obligations under this section before it could commit $5,580 for the purchase of new glass signage, obligations that it failed to carry out and which were made evident to the Adjudicator in my original application. 2) In relation to my other outcomes sought, the Adjudicator made an error in law when deciding that the rug type signs were body corporate assets and not part of the common property when these signs were affixed to the common property. Body corporate assets are defined by the BCCM Act in Section 11 and the correct interpretation of this section is critical to the remaining sections of my application. 3) The body corporate has disposed of part of the common property unlawfully (not by resolution without dissent as required by Section 159 of the Accommodation Module Regulation). 4) The Adjudicator has not addressed my outcomes #4 and 5. These relate to the other type of signage which was firmly affixed to the common property (walls) of the scheme by mortar bonding and which was removed from the walls only with considerable effort by two men working in unison with what seemed to me to be a cross- bow saw. I maintained that this signage was also common property but the adjudicator failed to recognize this or comment on this in the decision handed down. \ [19] This is a reassertion of Mr Coles's original claims, with a claim that the Adjudicator did not deal with some of them. Apart from a "further 2 Adjudicator's reasons for judgment [17]. 3 Accommodation Module s 161; Adjudicator's reasons for judgment [8]. -- 4 of 9 -- 5 submission" dated 3 October 2013 which suggests error on the part of the Adjudicator in failing to find that the signage rugs were ‘fixtures’ and in his alleged failure to consider s 139 of the Accommodation Module, it is difficult to find any clear articulation of an error of law that the Adjudicator is said to have committed. [20] The stated grounds for appeal will now be considered. Alleged non-consideration of s 139(2)(a) of the Accommodation Module [21] No submission was offered on this point. It is true that the Adjudicator made no mention of s 139 of the Accommodation Module, but, on the facts as found, no situation arose which required consideration of that section. [22] Section 139(2) applies ‘if a liability arises for which no provision, or inadequate provision, has been made in the budget’. It is common ground that $70,000 was budgeted at the AGM for painting work, and that this was more than adequate to cover all relevant work. It is true that the AGM minutes do not refer to reinstallation of signage, but the committee (on behalf of the body corporate) was in any event entitled under s 161 of the Accommodation Module to make improvements, and it does not need a resolution from a general meeting if the cost of making such improvements is less than the relevant limit. [23] Section 139 of the Accommodation Module has nothing to say about expenditure within budget ($70,000), or about legitimate expenditure by a committee in making improvements within its authorised limit. In this scheme the authorised limit was $50,120, which was more than adequate for the impugned expenditure of $5,890. [24] No error is shown under ground one. Failure to find rugs to be fixtures [25] Mr Coles contends that the rugs were formerly part of the common property, and that under s 11 of the BCCM they were not Body Corporate assets. The question whether the rugs became ‘incorporated into the common property’4 and therefore became part of it was dealt with in the submissions of the parties and ultimately by the adjudicator along the lines of whether or not they became fixtures to the walls which were common property. That is, I think, a convenient test and will often be the dominant question to consider in approaching the ultimate question of "incorporation" into common property. In determining whether particular items have become fixtures, courts have given much consideration to issues such as the degree and purpose of the annexation, and the adjudicator appears to have founded his decision upon relevant criteria. His findings include the following 4 See BCCM s 11. -- 5 of 9 -- 6 Clearly, the Body Corporate was entitled to access the foyer area for the purpose of patching and painting the walls of the foyer. In order to do so it was necessary to remove the rug signage. I note that the rug was attached to two pieces of plywood which were screwed to the wall and capable of removal without being damaged. I am of the view that the rugs are Body Corporate assets rather than fixtures, and therefore the Body Corporate was entitled to remove these from the wall. [26] It has often been stated that in this area no particular factor has primacy, and that each case depends on its own facts.5 [27] There has been no misdirection by the Adjudicator on this point. Indeed, on the evidence it is difficult to see how any other conclusion could have been reached. Failure to find that Body Corporate contravened s 159 of Accommodation Module by ‘disposing of’ rugs [28] In the end it does not matter whether the rugs are Body Corporate assets or common property, because they have not been disposed of. The question whether the rugs were or were not a fixture is essentially a distraction unless the Body Corporate did something with the rugs that it was prohibited from doing. Mr Coles alleges that the Body Corporate unlawfully disposed of the rugs and thereby contravened s 159 of the Accommodation Module. That however is contrary to the facts. Removing the rugs from the wall and placing them into storage does not mean that they have been "disposed of" with the meaning of the section, or within any natural interpretation of that term. They remain in the custody of the Body Corporate. Indeed, on the findings of the Adjudicator, they are not common property, and are owned by the Body Corporate. No error has been shown in the Adjudicator's determination that they are Body Corporate assets. [29] Mr Coles attached to his submission of 3 October 2013 an email from ‘Peter Park’ and he described as ‘Development Manager, Citimark Properties, the developer of Evolution Apartments’. This, he claimed, supported his position on the question whether the rugs were part of the ‘finishes of the building’ and not a separate Body Corporate asset. Leaving aside any question of weight that could be given to the bare assertion in this short email, it is an attempt to present further evidence on the appeal that was not before the Adjudicator. Appeals of the present kind are strict appeals and must be determined on the material before the Adjudicator. [30] In any event the issue is not one that could affect the result. Adjudicator not addressing ‘outcomes four and five’ [31] These "outcomes" include the allegation that the Body Corporate disposed of common property and contain a request that the Body 5 National Australia Bank Limited v Blacker (2000) 104 FCR 288. -- 6 of 9 -- 7 Corporate be ordered to remove the new glass signage and restore the rugs. [32] With regard to the claim for an order that the new signs be removed and the old reinstated, the Adjudicator found that the Body Corporate had acted appropriately and correctly. On the evidence, the making of an order such as that which Mr Coles seeks would be plainly undesirable. Such an issue, one would think, might more desirably be raised with the unit owners as a whole, in a democratic way, such as by moving a motion at a meeting of the Body Corporate. The clear majority of those who responded to the opportunity to make submissions on the present matter were against Mr Coles on this point. On the available material it would have been wrong for the Adjudicator to make such an order. [33] Insofar as Mr Coles refers to mortar-bonding of signs in other parts of the building, the question whether or not different types of signage in other areas of the building became fixtures has no bearing on the relevant signs or on any other material point in the case. [34] Mr Coles’ objections in this case seem to have been triggered by the view that neither the Body Corporate nor the committee had any right to enter the area and remove the wall rugs ‘unless the proper authority from the respective owners (which requires a vote without dissent) has been obtained’.6 He further maintained that the Body Corporate was responsible ‘only for cleaning and maintenance of the lift foyers and is not empowered to remove or replace any signage in the lift foyers covered by bylaw 12, nor to change the colour (without the specific approval from the affected owners)’. These views, to say the least, seem idiosyncratic, and are at odds with the actual terms of bylaw 12.2. In short, they are erroneous. Summary [35] The case may be summarised as follows. Repainting was clearly authorised at an annual general meeting, and $70,000 budgeted for it. The cost of the painting work was $63,777.55. The signage rugs had to be removed, and the committee took advantage of this opportunity to replace them with what they reasonably considered to be improved signage. To the extent that any further specific authorisation was required in order to proceed, the committee duly authorised that work at its meeting of 14 August 2012. The Body Corporate had power to make improvements to the common property provided the cost is within the "basic improvements limit" (see Accommodation Module s 161). The committee had power to act on behalf of the Body Corporate in this respect (BCCM, s 100). The only relevant limitation on the committee’s power to act on behalf of the Body Corporate in this respect would arise if the decision was ‘a decision on a restricted issue for the committee’ under s 100(2) of the BCCM. The committee’s decision for the installation of the new signs was plainly not a 6 Letter Mr Coles to Body Corporate Manager 18 August 2012; similar submissions made to Adjudicator. -- 7 of 9 -- 8 decision on a restricted issue (Accommodation Module, s 42). The expenditure required for it was comfortably within the basic improvements limit set by s 161 of the Accommodation Module, which the Adjudicator calculated to be $50,120. [36] It does not matter whether the signage rugs, once removed, should be characterised as common property or Body Corporate assets. They have not been disposed of, and the decision to replace them with more modern signage was both reasonable and within the power of the committee to make. [37] In short the evidence shows that the activities have been duly carried out consistently with the requirements of the BCCM and the rules applicable to this scheme. [38] There was evidence to support every finding of fact that was made by the adjudicator, and there was no error of law in the reasoning which lead to the dismissal of Mr Coles’ application. Costs [39] The Body Corporate seeks an order that Mr Coles pay its costs of this appeal on an indemnity basis. [40] This is not the first time Mr Coles has brought unsuccessful proceedings that have caused needless expense to the Body Corporate, and ultimately the other unit owners. [41] A number of the other unit owners, in submissions to the Adjudicator referred to Mr Coles’ claims as ‘vexatious and mischievous and... a total waste of resources';7 ‘frivolous’ and ‘an illogical interpretation of bylaws and legislation taken to an extreme perspective to further a personal agenda that has no benefit to anyone in the building other than the applicant’;8 and 'a distraction to be constantly dealing with frivolous and vexatious petty claims that are seemingly being regularly raised by Mr Coles’.9 [42] As against this, two unit owners supported Mr Coles’ complaint to the Adjudicator, but they offered no submissions that provided substance to any of his claims. [43] The solicitors for the Body Corporate submitted that Mr Coles’ submissions were perverse and patently untenable, pointing out that his submissions on this appeal were very limited in the matter of identifying any error of law on the part of the Adjudicator. They had sought costs from the Adjudicator ‘in the maximum sum permitted of $2,000’, stating that ‘regard should be had to previous applications by this applicant’. The 7 Dr Ramasamy. 8 Ryan Rae. 9 Meredith Kitson. -- 8 of 9 -- 9 Adjudicator however did not specifically deal with that request, and in the event no costs were awarded. [44] I do not have sufficient information concerning previous applications and conduct by Mr Coles to base an order on that ground, although plainly there has been a history that has now exhausted the patience of the Body Corporate and number of unit owners. [45] Costs are rarely awarded in these matters.10 The ultimate question is whether "the interests of justice" displace the statutory recognition in s 100 of the Queensland Civil and Administrative Tribunal Act 2009 that "other than as provided under this Act or and enabling Act each party to a proceeding must bear the party's own costs for the proceeding". The only relevant exception for present purposes is "the interests of justice" under s 102 of the QCAT Act. [46] In the present matter I have come very close to exercising my discretion in favour of making an award of costs. I should think that if Mr Coles were to bring further proceedings needlessly which put the Body Corporate to expense, this Tribunal would be very likely to order him to pay the costs of any such exercise. Of course any future exercise will depend on its own facts and circumstances, but it is worth recording that Mr Coles would now seem to be very close to the end of the line where he can initiate proceedings without liability for the consequential expenses of other persons, and in particular the body corporate. If there is further unmeritorious litigation it may very well be in the interests of justice to require him to pay the costs of such proceedings. [47] In the present instance however I will not make such an order. Order [48] The appeal is without merit and it will be dismissed. 10 See Queensland Civil and Administrative Tribunal Act 2009 (Qld), s 100, s 102; compare Ralacom Pty Ltd v Body Corporate for Paradise Island Apartments No 2 [2010] QCAT 412; McEwen v Barker Buildings Pty Ltd [2010] QCATA 49; Toivanen v Body Corporate for Aspect Caloundra [2013] QCATA 248 at [6] to [15]. -- 9 of 9 --