La Porte D'Or [2000] QBCCMCmr 121 (6 March 2000)

P J HANLYREFERENCE: 0079-2000

ORDER OF AN ADJUDICATOR

MADE UNDER PART 10 OF CHAPTER 6

BODY CORPORATE AND COMMUNITY MANAGEMENT ACT 1997

Number of Scheme:	12681
Name of Scheme:	La Porte D'or
Address of Scheme:	3422 Gold Coast Highway SURFERS PARADISE QLD 4217

TAKE NOTICE that pursuant to an application made under the abovementioned Act by

Jeno Czinder and Beverley Czinder, the owners of lot 64



P J HANLYI hereby order that the work currently being undertaken on the building by Building Rectification Services Pty Ltd shall cease forthwith.

I further order that the secretary shall forthwith forward to all owners a voting paper on which shall appear a motion resolving (by ordinary resolution) to accept the quotation from Building Rectification Services Pty Ltd and to strike the appropriate special levy and a motion resolving (by ordinary resolution) to accept the quotation from Opat Consolidated Services Pty Ltd and to strike the appropriate special levy.

I further order that owners shall be allowed 21 days from the date of the letter enclosing the voting paper within which to return the voting paper to the secretary.

I further order that, in the event a clear majority of all possible votes is received for one or other motion in fewer than 21 days, the successful contractor (if any) may forthwith re-commence/commence the work in question.2y

STATEMENT OF ADJUDICATOR’S REASONS FOR DECISION - REF 0079-2000

“La Porte D'or” CMS 12681

The applicants Jeno Czinder and Beverley Czinder, have sought the following order of an adjudicator under the Body Corporate and Community Management Act 1997 (the Act), quote -

That motion 3 is in conflict with section 104 of the Act and be ruled out of order.

The body corporate committee comply with section 104 in that two (2) quotations were obtained and submitted but only one (1) motion was put forward.

All spalling work to be rectified and northern face of building painted only.

The applicants have also sought the following interim order of an adjudicator, quote -

No work on the building to be carried out until a final decision is handed down by the Commissioner.

Section 225(1) of the Act states that an adjudicator may make an interim order if satisfied, on reasonable grounds, that an interim order is necessary because of the nature or urgency of the circumstances to which the application relates. An adjudicator’s order may contain ancillary or consequential provisions the adjudicator considers necessary or appropriate (section 230(1)).

In the supporting grounds, the applicants state that at an Extraordinary General Meeting held on 17 February 2000 a motion was passed in relation to structural repairs and painting. The applicants further state that owners were not given a real choice of contractors as only one motion was considered at the meeting, although two quotes had been obtained. The applicants further state that they only learned at the meeting that the building was to have a change of colour, but no motion as to colour selection was considered at the meeting. The applicants further state that the motion was passed by ordinary resolution, when section 113 requires that the motion be passed by special resolution since the cost of the project was greater than $250 multiplied by the number of lots in the scheme. The applicants further state that over the past five years most of the building has had paint work done, with only the northern face requiring painting this year, together with the repair of the spalling. The applicants express the view that the committee does not need to place hardship on owners unnecessarily.

The committee was invited to respond to the application. A detailed response was received from the chairperson on behalf of the committee, and from the body corporate’s solicitors. Unsolicited responses were also received from a number of owners.

The chairperson provided a detailed history of the scheme, and also attached copies of various reports which the present committee has recently commissioned in respect of the overall maintenance of the building. I do not propose to detail all of this material in these “Reasons”; suffice to say that after perusing the material it appears to me that the committee has approached the maintenance programme for this scheme in a business-like fashion. Reports have been obtained from appropriately qualified professionals, and various motions have been placed before owners for their consideration as to the recommended works to be undertaken. Inevitably, financial constraints dictate the timing of many projects in a body corporate, just as they do in private residential households. Some projects, however, may have to be undertaken because of issues of safety, as in this case, where it appears that the structural integrity of the building may be under threat if the spalling is left untreated.

Notwithstanding that the spalling in this scheme appears to require immediate remedial action, owners are still entitled to expect that the requirements of the Act and the Standard Module will be followed. The committee initially obtained four quotes in respect of the spalling and associated work. The committee decided that, because of the disparity of the quotes, there may have been some question as to the adequacy of the specifications. The committee then decided, quite properly in my view, to engage another firm of engineers specialising in concrete cancer on the Gold Coast, to prepare a further specification. Subsequently two quotes were obtained. Each quote was well in excess of the relevant limit for major spending for this scheme (which is calculated by multiplying the number of lots in the scheme by $200.00).

Section 104 of the Standard Module provides as follows:
ú

Quotes for major spending

104.(1) This section applies if—

(a) a motion to be moved at a general meeting of the body corporate

proposes the carrying out of work or the acquisition of personal

property or services, including the engagement of a body

corporate manager or service contractor, but not including the

engagement of a service contractor who also is, or is to be, a

letting agent; and

(b) the cost of carrying the proposal into effect is more than the

relevant limit for major spending for the scheme.

(2) The lot owners must be given copies of at least 2 quotations for

carrying out the work or supplying the personal property or services.

(3) If the motion is proposed by the committee, the committee must

obtain the quotations.

(4) If the motion is not proposed by the committee, the person proposing

the motion must obtain the quotations and give them to the secretary.

(5) Copies of the quotations or, if voluminous, summaries of the

quotations and advice about where the complete documents may be

inspected, must accompany the notice of the meeting at which the motion is

to be considered.

(6) If, for exceptional reasons, it is not practicable to obtain 2 quotations,

a single quotation must be obtained and must accompany the notice of

meeting.

Example—

If goods to be acquired by the body corporate are obtainable from only 1 source, a

quotation for supplying the goods must be obtained from the source and circulated

with the notice of meeting. The fact that goods with the necessary characteristics

are only obtainable from a single source would be an exceptional reason for not

obtaining 2 quotations for the supply of the goods.

(7) Each quotation obtained under this section must be retained as an

attachment to the minutes of the meeting at which the quotation is

considered.

Accordingly, it was necessary for owners to be given the opportunity to decide which of the quotes, if any, should be accepted. It is not sufficient for the committee to select a particular quote, and then put one motion on the agenda of a meeting for owners to consider. The whole purpose of owners being given copies of “at least two quotations” for the work is to provide them with a choice of provider. Such a choice cannot be made by owners if the committee has already made the choice, and incorporated that choice into one motion. I derive further support for the view that at least two motions must be placed on the agenda from the wording of section 104(7) of the Standard Module, which states that:

“Each quotation under this section must be retained as an attachment to the minutes of the meeting at which the quotation is considered.”

(emphasis added)

I do not accept the argument advanced by the body corporate’s solicitors that confusion would be caused in the minds of owners if more than one motion were to be submitted. As the matter currently stands, owners have only had the opportunity to vote in respect of the quote from Building Rectification Services. The body corporate’s solicitors noted “that owners could always reject the proposal if they were not satisfied with the quotations.” This argument overlooks the fact that owners are entitled to consider both quotations, and the only way that they can consider the quotations is if each one is incorporated into a motion. It might well be that owners prefer a particular quote, even though it is higher, because they have heard good reports about that particular contractor’s work.

I accept that the committee has spent a great deal of time and made detailed investigations regarding this issue (and it seems, other issues). Even in such circumstances, the owners were entitled to have a choice of contractor, and they have not been afforded the opportunity to choose between the two contractors on offer. I therefore propose to order that the work currently being undertaken on the building in respect of spalling and associated painting cease forthwith. I further propose to order that the secretary of the body corporate shall forthwith forward to all owners a voting paper on which shall P J HANLYappear a motion resolving (by ordinary resolution) to accept the quotation from Building Rectification Services Pty Ltd and to strike the appropriate special levy and a motion resolving (by ordinary resolution) to accept the quotation from Opat Consolidated Services Pty Ltd and to strike the appropriate special levy. I further propose to order that owners shall be allowed 21 days from the date of the letter from the secretary enclosing the voting paper within which to return the voting paper to the secretary. I further propose to order that, in the event a clear majority of all possible votes is received for one or other motion in fewer than 21 days, the successful contractor (if any) may forthwith re-commence/commence the work in question.2y

I note the objection of the body corporate’s solicitors to the granting of an interim order as sought, on the basis that the body corporate will be put to great expense and potential liability for contractual damages if the order were made. I am not persuaded that owners’ rights should be denied even in these circumstances. However, I am mindful of the argument advanced in relation to the additional sum which will be incurred if the completion of the work goes beyond 30 June 2000, and it is for that reason, as well as to save the cost of holding a further meeting, that I have ordered that owners may vote on this issue by post.

I also note the applicants’ assertion that the motion should be resolved by special resolution because the cost of the work exceeds $250 multiplied by the number of lots in the scheme. The work in question cannot be categorised as an improvement and therefore section 113 of the Standard Module is not applicable. It is clearly maintenance and repairs. The applicants’ argument in this regard has no merit, and I do not propose to order that the motion be by way of special resolution.

I have also noted the applicants’, and other owners’, objections to the painting being undertaken on the whole building, in light of the recent painting of certain walls of the building. There seems to be consensus amongst these owners that only the northern wall should be painted.

On my reading of the material supplied, it is not correct to describe the work simply as painting. The chairperson refers to it as a “special paint cover of all surfaces of the building” in his explanatory note and report to owners in January 2000, prior to the Extraordinary General Meeting. The specification prepared by Laurie Oar & Associates Pty Ltd described the scope of the external painting as requiring the application of an acrylic waterproof membrane to external pre-painted surfaces of the building. In my view the efficacy of such a treatment would clearly be diminished, or even negated, if the entire building were not to be treated. I am therefore satisfied that this complaint from owners is ill-founded, in light of the work which appropriately qualified professionals have deemed to be necessary.

I have also noted the complaint from the applicants that owners have not been given a choice of colour. I support the chairperson’s view that this is a matter which can properly be left to the committee. The committee is the administrative arm of the body corporate, and there are certain matters which, for ease of administration, must be left to the committee. It could be quite unwieldy if owners were to be given a choice of colour; what would the committee do if 182 different colour schemes were to be suggested? In my view, unless the committee intended to depart dramatically from the existing colour scheme, it is a matter which can quite properly be decided by the committee.

In the circumstances, it is not intended to invite further submissions regarding this matter, or to make a further order, since this decision, though an interim one as sought by the applicants, is final in its determination of this matter. If the applicant considers that an appeal of this decision is warranted, then they should appeal the interim order.