QLD: Uncommon Property

This QLD article is about protecting Queensland apartment buyers.

If a lot owner enlarges one of their windows during renovations, does that require a resolution without dissent? The answer is yes, if part of that window is on the common property and the lot owner does not have pre-existing authority to make the change; for example under an exclusive use by-law.

Cairns Aquarius CTS 1439 is an 86-lot high-rise on the Esplanade in Cairns. In late 2017 the owners of lot 83, one of the three penthouses, requested the Committee of the Body Corporate call a General Meeting to consider approving, amongst other things, extensive renovation works to lot 83 and an associated exclusive use area. A dispute about the renovations arose and after conciliation, the two motions required were put to all lot owners for a vote.

The relevant motions passed but there was a problem – the owners of lot 83 had failed to disclose information about maintenance responsibilities to their fellow lot owners before the vote. In a subsequent adjudication, the Adjudicator found that the owners of lot 83 had misled the fellow lot owners by failing to provide that relevant information. Accordingly, one of the motions was declared void.

The other motion was declared void on the basis that what it purported to do was to authorise the owners of lot 83 to make permanent improvements on the common property for the sole use and enjoyment of lot 83, without the grant of some right to use and occupy those affected areas of the common property i.e., by the grant of exclusive use. This finding by the Adjudicator followed the decision of the Queensland Court of Appeal in Katsikalis v Body Corporate for ‘The Centre’ [2009] QCA77.

Following the adjudication, the owners of lot 83 nevertheless decided to proceed with renovation works they considered to be ‘non-controversial’. That is, works that did not require approval of the Body Corporate in General Meeting, and which could be approved by the Committee. The ‘non-controversial’ works were some internal works and enlarging a window at the front of their lot (facing the ocean).

The owners of lot 83 submitted motions to the Committee for approval. After further discussions and disagreement, it was agreed to take the motions to the 2019 AGM to be voted on by all lot owners.

After receiving an AGM meeting notice, containing lot 83’s new renovation motion (Motion 10), the owner of another lot in the scheme, Danseur Pty Ltd, wrote to all the lot owners to put them on notice that Motion 10 would be void if passed. Despite that clear warning, the motion was allowed to be voted on and was passed by ordinary resolution. Danseur commenced an adjudication application seeking a declaration that resolution 10 was void.

On 24 June 2020, Adjudicator Miskinis determined that resolution 10 was valid but did not approve any structural work beyond the enlargement of the window. With the greatest respect, the Adjudicator’s reasoning was mystifying.

After acknowledging that the principle in Katsikalis was settled law and identifying that the windows were located in a boundary structure between lot 83 and the common property, the Adjudicator nonetheless determined that:

“I do not believe that the enlargement of the windows involves disposition of an interest in common property. I am therefore of the view that the resolution was sufficient to authorise the work and that a resolution without dissent was not required”

Danseur appealed the decision to QCAT. In Danseur v the Body Corporate for Cairns Aquarius CTS 1439 & ANOR [2022] QCATA Member Oliver allowed the appeal, set aside the Adjudicator’s decision, and set aside resolution 10.

In the appeal, Danseur pointed out to the appeal tribunal that by lot 83’s owners enlarging the window there had been two dispositions of an interest in common property. The first was the physical removal and disposal of the masonry that comprised the wall into which the larger
window was installed. The second disposition was the use of that space by the owners of lot 83 to install a new, larger window for the sole and permanent benefit of lot 83. It is worthwhile to note that a window does not simply comprise the pane of glass; the frame, glazing system, seals and the like are all part of the window. Accordingly, it did not matter whether the panes of glass were on one side of the boundary line or the other – part of the window would be in the common property and part would be in lot 83.

Member Oliver considered a number of previous decisions including the High Court decision in Ainsworth v Albrecht (2016) 261 CLR 167. Ultimately the Member decided that there was in fact a disposition of the masonry, part of which was clearly common property. The disposition was the physical removal and disposal of the masonry.

There was no consideration in the Adjudicator’s reasons as to whether the disposition of the right to use the space where the masonry was to install the new, larger window amounted to a disposition of an interest in the common property for the exclusive benefit of lot 83.

The Member determined that both Ainsworth and Katsikalis make it clear that if there is to be a disposition of common property it must be approved by resolution without dissent. The Adjudicator having not determining whether there was a disposition of an interest in the common property through installing the new window, it was open for the tribunal to do
so; and it did!

It followed that resolution 10 was void, it ought to be set aside, the Adjudicator’s decision was wrong, and the appeal should be allowed.

It is crucial for lot owners and Committees to understand that the common property is held in common by the lot owners as tenants in common, in shares pro-rata their interest schedule lot entitlements. The Body Corporate is entitled to deal with the common property, but only strictly in accordance with the legislation. The High Court in Ainsworth has made it very clear that disposing of an interest in common property is a serious matter and requires a resolution without dissent. Any lot owner can vote ‘no’ to that resolution without dissent and without the risk of their vote being overturned where they have, at the least, subjectively reasonable reasons for voting no.

When considering an owner’s renovation proposal, care should be taken to examine precisely what is being proposed and whether any of the works will extend into the common property. Once all of the works of that type have been identified, the next step is to consider if any of those works may be conducted ‘as of right’ (for example under an exclusive by-law) or after a lower level of approval is given, such as at a Committee meeting (for example in relation to some utility infrastructure installations). Whatever is left over after that process is completed will require some form of special authorisation; for example the grant of exclusive use, an easement, a lease or a licence.

A lot owner who ignores the principle in Katsikalis will likely find themselves having to undo their renovation works.

Stratum Legal acted for Danseur in these disputes, and can help you to properly propose, oppose or assess a renovation proposal.

Michael Kleinschmidt
Bugden Allen Graham Lawyers
E: [email protected]
P: 07 5406 1280

This post appears in Strata News #579.

This article is not intended to be personal advice and you should not rely on it as a substitute for any form of advice.

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