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Do the by-laws permit a commercial lot owner to make improvements to exclusive use areas? - 9 April 2018

In Ocean Plaza Apartments [2017] QBCCMCmr 188, HopgoodGanim successfully acted for a commercial lot owner in a dispute with the Body Corporate to confirm that the commercial lot owner’s proposed installation of boom gates in their exclusive use car park was in accordance with the by-laws for the Scheme and did not require Body Corporate approval. 

The decision illustrates the importance of carrying out a careful and considered analysis of the proper interpretation of a Scheme’s by-laws in determining whether works within an exclusive use area are permitted by the by-laws. 

The Scheme comprised a large commercial lot (a shopping centre), with a residential tower situated above it. A car park was located on the bottom two basement levels of the Scheme, which consisted of two parts. The first part was a commercial car park over which the commercial lot owner had exclusive use. The second part was a secure car park for the residential lot owners over which they had exclusive use, and could be accessed by an access key. As the residential lot car park was located on the lower basement level, the residential lot owners are required to drive through the commercial car park and down to the lower basement level to access the residential car park.  

As to the commercial lot owner’s rights with respect to the commercial car park, by-law 40 entitled them to “install such machinery by way of security systems and the installation of any other structures or works or plant and equipment to control the flow of traffic into and out of the said designated area and to receive payment of fees for such use. The Owner of Lot 113 shall ensure that for 24 hours every day there shall be unobstructed direct access available to and egress from the residential car parking area…”

In December 2014, with the Body Corporate Committee’s approval, the commercial lot owner installed boom gates at the entrance to the commercial car park and commenced charging patrons for parking. Residential lot owners were given a new swipe card to enable them to proceed through the boom gates and then to the residential car park where they would use their access key as normal. However, it emerged that some residential lot owners were instead parking in the commercial car park for free as the boom gate technology could not determine whether they proceeded to their residential car park or not. 

In order to control the flow of traffic into and out of the commercial car park, the commercial lot owner sought the Body Corporate’s agreement to upgrade the Body Corporate’s access infrastructure at the entrance to the residential car park so that the residential lot owners would use the same swipe card at the entrances to both the commercial car park and the residential car park to prevent residential lot owners from parking in the commercial car park without paying. The Body Corporate did not agree to that request.

The commercial lot owner therefore devised an alternative solution that would not require the Body Corporate’s consent. This involved the installation of an additional boom gate at the entrance to the residential car park, but within the commercial car park, and the use of paper tickets. Under this system, residential lot owners would take a ticket at the entrance to the commercial car park, proceed to the new boom gate and insert that same ticket to exit the commercial car park, and then enter the residential car park using their existing access key. As long as the residential lot owners made their journey from the first boom gate to the second within three hours, they would not be charged for passing through the commercial car park.

The Body Corporate argued that the boom gates previously installed in 2014 and the proposed additional boom gates were contrary to by-law 40 as they did not provide “unobstructed direct access”, and sought orders to remove the existing boom gates as well as restrain the commercial lot owner from installing any further equipment in the commercial car park without the Body Corporate’s consent.

The commercial lot owner argued that the boom gates were permitted by by-law 40, do not present an obstruction to residential lot owners and, therefore, do not require body corporate approval.

The Adjudicator held that as the Body Corporate had not issued a contravention notice with respect to the boom gates installed in 2014, the Body Corporate had failed to comply with Section 184 of the Body Corporate and Community Management Act 1997 which only permits the Body Corporate to make an application for resolution of a dispute relating to an alleged by-law contravention if it has first issued a contravention notice.

The Adjudicator otherwise found that by-law 40 authorised the commercial lot owner to make certain improvements to the commercial car park and that boom gates came within the phrase “any other structures or works or plant and equipment to control the flow of traffic into and out of the said designated area and to receive payment of fees for such use”.

This left the issue of whether boom gates are an obstruction.

The Body Corporate argued that boom gates are an obstruction as they are barriers or impediments that block passage so as to hinder or prevent, make difficult, and slow the passage to the residential car park. However, the commercial lot owner argued that “obstruct” means to prevent or render a road or way impassable, such that a temporary barrier that is easily passed by users does not meet that definition. 

The Adjudicator held that not every object in one’s way will amount to an obstruction, such that it is a question of degree. Further, the requirement that lot owners pass through two boom gates, without paying and with no more delay than the few seconds whilst being required to take or insert a ticket and wait for the gate to rise, does not obstruct their direct access to the residential car park. 

As a result, the Adjudicator decided that by-law 40 authorised the commercial lot owner to make certain improvements, which included the installation of boom gates, and did not require the Body Corporate’s approval to do so. The Body Corporate’s application was therefore dismissed. 

A careful and considered analysis of the proper interpretation of a Scheme’s by-laws must be undertaken in determining whether works within an exclusive use area are permitted by the by-laws and do not require body corporate approval. 

If the works are not permitted by the exclusive use by-laws, then a consideration of the by-laws, the legislation and regulations must also be undertaken to determine whether the works may be permitted with the body corporate’s approval and the extent of the approval required (whether by committee or general meeting approval; and whether by ordinary resolution, special resolution or resolution without dissent). 

Should you require advice with respect to a Scheme’s by-laws, assistance in a dispute with respect to a Scheme’s by-laws or assistance in drafting a motion to put to the Body Corporate in order to undertake works, please contact HopgoodGanim Lawyers’ experts in Body Corporate law - Don Battams, Anthony Pitt and Hayley Harvey.


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