Cambridge Street Town Houses [2000] QBCCMCmr 391 (1 August 2000)

CG YoungREFERENCE: 0274-2000

ORDER OF AN ADJUDICATOR

MADE UNDER PART 10 OF CHAPTER 6

BODY CORPORATE AND COMMUNITY MANAGEMENT ACT 1997

Number of Scheme:	20471
Name of Scheme:	Cambridge Street Town Houses
Address of Scheme:	40 Cambridge Street RED HILL QLD 4059

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

Eve Frances WICKS, the owner of lot 8



CG YoungI hereby order that the resolution made in respect of Motion 2n8 at the Annual General Meeting held on 24 February 2000, for the approval of contributions for the painting of the building on each lot in the community titles scheme, is invalid.

I further order that within one (1) month of the date of this order, the body corporate reimburse those owners who have paid to the body corporate the contribution levied in consequence of the resolution passed in respect of Motion 8 at the Annual General Meeting of 24 February 2000.
STATEMENT OF ADJUDICATOR’S REASONS FOR DECISION - REF 0274-2000

“Cambridge Street Town Houses” CTS 20471

The applicant, Eve Frances Wicks of lot 8, has sought the following order of an adjudicator under the Body Corporate and Community Management Act 1997 (“the Act”), quote -

That motion 8 be ruled invalid. Motion 8 was passed at the Annual General Meeting held on 24^th February 2000.

Section 223(1) of the Act provides that an adjudicator may make an order that is just and equitable in the circumstances (including a declaratory order) to resolve a dispute, in the context of a community titles scheme, about –

a) a claimed or anticipated contravention of the Act or the community management statement; or

b) the exercise of rights or powers, or the performance of duties, under this Act or the community management statement; or

c) a claimed or anticipated contravention of the terms, or the termination of, or the exercise of rights or powers under the terms of, or the performance of duties under the terms of an engagement contract or an authorisation contract.

An order may require a person to act, or prohibit a person from acting, in a way stated in the order (section 223(2)). An adjudicator’s order may contain ancillary or consequential provisions the adjudicator considers necessary or appropriate (section 230(1)).

In the supporting grounds, the applicant states that motion 8 on the agenda of the Annual General Meeting dated 24 February 2000 should have been ruled out of order and should be declared invalid for the following reasons:

1.	The levies imposed are not proportional to lot entitlements which is not in accordance with section 95(5) of the Body Corporate and Community Management (Standard Module) Regulation 1997 ("the Standard Module").
2.	The body corporate does not have the authority of a by-law to accommodate motion 8.
3.	The body corporate had not obtained the agreement of lot owners in accordance with section 119 of the Standard Module.
4.	Lot owners did not receive sufficient information concerning the projected painting costs.
5.	The proposed formula for attributing painting costs to each lot is inadequate.

Ms Wicks included with her application a copy of the notice of the Annual General Meeting and the minutes of this meeting. Motion 8 on the voting papers for the meeting reads (in part):

“Motion 8 Proposed by the Committee

Ordinary Resolution

That the contributions for the painting of the building (estimated cost after eight (8) years to be $13000.00) be issued based on the formula as prepared by Leary & Partners Pty Ltd, Quantity Surveyors and as set out below”

The minutes of the Annual General Meeting dated 24^th February 2000 indicate that motion 8 was passed with three votes in favour of the motion and one abstention. Ms Wicks has noted on this copy of the minutes that she in fact voted against this motion. A notation above the motion indicates that the body corporate were advised of the requirements of section 119 of the Standard Module. However, there is not a reference in the minutes which shows the body corporate’s response to this advice.

A copy of the application was forwarded to the body corporate secretary for distribution to all owners, excluding the applicant. In their joint response to the application, the current and previous body corporate chairpersons stated that the complex was painted in 1999, and monies in the sinking fund were used to pay for the painting. They state that the body corporate now understands that painting costs need to be funded separately and not on the basis of lot entitlements.

“Cambridge Street Townhouses” is a group title scheme and therefore each lot building falls completely within the boundaries of the lot. Maintenance of these buildings (which includes painting) is the responsibility of the relevant owner (see section 120(2) of the Standard Module). This is in contrast to a building units plan where the surface of the external wall is common property and the maintenance is the responsibility of the body corporate. Accordingly, the body corporate has no authority under the Act to levy owners in respect of the painting of their lot buildings.

Previously, the body corporate has paid for the painting of lot buildings from the sinking fund. However, the intent of motion 8 is to, by ordinary resolution, require owners to contribute to the painting of the building based on a formula prepared by a quantity surveyor. The copies of the “Notice of Maintenance Contributions” provided by the applicant suggest that the body corporate is firstly, levying lot owners to contribute to the painting of the building on their lot, and secondly, have created another fund (referred to as “Additional Fund 1”) for this purpose.

Section 119 of the Standard Module provides a means for owners to enter into an arrangement with the body corporate whereby the painting is carried out under its auspices for participating owners. That is, the body corporate can arrange a painting contractor to paint the lot buildings of those owners who choose to have it done and recover the full painting cost from those owners. The vital difference between this method and that employed by the body corporate is that there is no compulsion for owners to allow the body corporate paint their building. Section 119 states:

ÿ

Supply of services by body corporate—Act, s 120

119.(1) The body corporate may supply, or engage another person to supply, utility services and other services for the benefit of owners and occupiers of lots, if the services consist of 1 or more of the following—

(a) maintenance services, which may include cleaning, repairing, painting, pest prevention or extermination or mowing;

(b) communication services, which may include the installation and supply of telephone, intercom, computer data or television;

(c) domestic services, which may include electricity, gas, water, garbage removal, airconditioning or heating.

Example—

The body corporate might engage a corporation to supply PABX services for the benefit of the owners and occupiers of lots.

(2) The body corporate may, by agreement with a person for whom services are supplied, charge for the services (including for the installation of, and the maintenance and other operating costs associated with, utility infrastructure for the services), but only to the extent necessary for reimbursing the body corporate for supplying the services.25

(3) In acting under subsections (1) and (2), the body corporate must, to the greatest practicable extent, ensure the total cost to the body corporate (other than body corporate administrative costs) for supplying a service, including the cost of a commercial service, and the cost of purchasing, operating, maintaining and replacing any equipment, is recovered from the users of the service.

A section 119 arrangement is the only means by which owners can have the body corporate carry out the task of painting the private buildings on their respective lots. The body corporate cannot resolve, by ordinary resolution, to fix a contribution on all lot owners for the painting of the building on each lot. The body corporate can only reach agreement with those owners who want to participate in such an arrangement. It is emphasised that there must be no compulsion for owners to participate. Owners may participate in a body corporate arrangement or make private arrangements for the painting of the building on the lot.

For these reasons, I have declared void the resolution passed in respect of Motion 8 at the Annual General Meeting dated 24 February 2000.

The applicant has also made reference to a proposed by-law which would empower the body corporate to supply, or engage another person to supply, painting services for the benefit of owners. In my opinion, a body corporate cannot make a by-law to allow it to carry out the painting of an owner’s lot building, even against the wishes of the owner. The legislation provides its own remedy for a body corporate in instances where an owner does not properly maintain their lot, by allowing the body corporate to carry out the maintenance work itself on the lot and then recover the cost from the owner. However, the body corporate can make a by-law to regulate the colour of lot buildings.2n