Banyandah Towers [2001] QBCCMCmr 103 (20 February 2001)

P G DanielsREFERENCE: 0674-2000

ORDER OF AN ADJUDICATOR

MADE UNDER PART 10 OF CHAPTER 6

BODY CORPORATE AND COMMUNITY MANAGEMENT ACT 1997

Number of Scheme:	10295
Name of Scheme:	Banyandah Towers
Address of Scheme:	150 Duporth Avenue MAROOCHYDORE QLD 4558

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

James Gerard Callaghan a co-owner of lot 106


P G DanielsI hereby order that the application for an order:

That the chairperson is to provide unit owners copies of minutes to its meetings where the committee made the following decisions:-

1.	To allow the Body Corporate Managers to receive a remuneration of $14,000 per annum prior to the Body Corporate considering the Body Corporate manager’s new contract at the AGM 29.09.00.

2.	To allow the resident manager to claim GST from the Body Corporate prior to the matter being considered at the AGM 29.09.00

3.	Where insurance quotes for the Body Corporate were reviewed and a decision was made to increase the Public Liability insurance from $10 million to $20 million, and to place the insurance with Zurich.

4.	Authorised the installation of the BBQ as per the Invoice 048452 from Timbermark for $1,836.10 (copy attached).

5.	Authorised the Body Corporate manager to seek the legal advise from Deacons Graham & James as per the attached letter dated 17.05.00.

is dismissed.1n
STATEMENT OF ADJUDICATOR’S REASONS FOR DECISION - REF 0674-2000

“Banyandah Towers” CTS 10295

The applicant, James Gerard Callaghan, a co-owner of lot 106, has sought the following order of an adjudicator under the Body Corporate and Community Management Act 1997 (the Act):

That the chairperson is to provide unit owners copies of minutes to its meetings where the committee made the following decisions:-

1.	To allow the Body Corporate Managers to receive a remuneration of $14,000 per annum prior to the Body Corporate considering the Body Corporate manager’s new contract at the AGM 29.09.00.

2.	To allow the resident manager to claim GST from the Body Corporate prior to the matter being considered at the AGM 29.09.00

3.	Where insurance quotes for the Body Corporate were reviewed and a decision was made to increase the Public Liability insurance from $10 million to $20 million, and to place the insurance with Zurich.

4.	Authorised the installation of the BBQ as per the Invoice 048452 from Timbermark for $1,836.10 (copy attached).

5.	Authorised the Body Corporate manager to seek the legal advise from Deacons Graham & James as per the attached letter dated 17.05.00.

Section 223(1) 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)).

The applicant has sought an order for the distribution of minutes of Committee meetings in respect of five distinct matters. I will consider each separately.

The Committee has responded to the application through the body corporate manager, Strata Solutions (the Committee submission).

1.	To allow the Body Corporate Managers to receive a remuneration of $14,000 per annum prior to the Body Corporate considering the Body Corporate manager’s new contract at the AGM 29.09.00.

The Body Corporate held its annual general meeting (AGM) on 29 September 2000. The Body Corporate adopted administrative fund and sinking fund budgets and fixed contributions based on those budgets.

The applicant noted that in the administrative fund budget under the heading “Actual 01/08/00-05/09/00” it is stated the amount of expenditure on Body Corporate Management Fees in $3500. That is one quarter of the fee to be paid to Strata Solutions pursuant to a new agreement that was considered by the Body Corporate at its AGM on 29 September 2000. The new fee was to be $14,000. The previous yearly fee was $12,600.

The Committee submission relevantly states the following about the matter:

“The Committee did not specifically handle this matter at a Committee meeting – rather this is a function delegated to the Body Corporate Manager.

The Body Corporate managers had entered the new proposed budgets for the Body Corporate into their accounting system for the new financial year 01/08/00 to 31/07/01 (these proposed budgets were subsequently approved at the AGM held on 29/9/00). Management fees for the Body Corporate manager were automatically journalled by the system in accordance with the proposed new budgets in the system. Should the budgets have changes at the AGM then the system would have been subsequently updated and any adjustments required would have been made – in any case, the Body Corporate would not have been financially disadvantaged, and the fiduciary responsibility of the Body Corporate manager would have at all times been observed.”

The applicant has replied to the submission by questioning the validity of paying the increased fee prior to the AGM.

2.	To allow the resident manager to claim GST from the Body Corporate prior to the matter being considered at the AGM 29.09.00

The Body Corporate resolved at its annual general meeting on 29 September 2000 to vary the resident managers agreement to provide that GST on the remuneration shall be paid by the Body Corporate except GST on supplies acquired in the performance of the Manager’s duties.

Prior to the resolution, the resident manager was paid $6,024.10 per month. The applicant noted in the proposed administrative fund budget (referred to above) under the heading “Actual 01/08/00-05/09/00” the Resident Manager’s Fees are stated as $6,626.51. The applicant states that this amount is the monthly amount of $6,024.10 plus 10%. Further, the applicant states, “It would appear the resident manager was also paid $6,626.51 for the period 01.07.00 to 31.07.00.”

The applicant notes that the resident manager’s remuneration was increased prior to the Body Corporate’s AGM on 29 September 2000.

The Committee submission relevantly states the following about the matter:

“The Committee did not specifically handle this matter at a Committee meeting – rather this is a function delegated to the Body Corporate Manager.

The Body Corporate manager handled the payment to the Resident Manager, and the Body Corporate’s consequential obligations for the paying of the GST, in accordance with their view of the most likely outcome of the AGM. In the event, the motion was carried at the AGM in accordance with that accounting decision made i.e. that the meeting would vote for the Body Corporate and not the resident manager paying the GST. Had the meeting decision gone the other way then payment adjustments would have been made by Strata Solutions corporate accountant. Once again, the Body Corporate manager has a fiduciary duty to the Body Corporate, and the Committee has no complaints with the handling of these issues.”

Once again, the applicant has replied to the submission by questioning the validity of the increased fee prior to the AGM.

3.	Where insurance quotes for the Body Corporate were reviewed and a decision was made to increase the Public Liability insurance from $10 million to $20 million, and to place the insurance with Zurich.

The Body Corporate resolved at its annual general meeting on 29 September 2000 to confirm and renew when due its insurance policy with Zurich Australia. The relevant motion indicates public liability insurance coverage at $10 million.

The Committee submission relevantly states the following about the matter:

“At the Committee’s meeting Friday 25^th August 2000, both the proposed budgets for the forthcoming AGM and the proposed motions, were discussed in detail. Insurance renewal quotes were discussed, as was the quote for insurance submitted as part of a motion by Mr Callighan. The Committee were of the view that there was no question that the preferred option for the Body Corporate was to renew with the current insurer. With regard to the increase in P/L cover from $10M to $20M, this increase for Banyandah was one of a number increased when some policies for larger complexes were reviewed by the Body Corporate manager and the broker – when the broker advised that there would be little or no cost associated with this increased level of cover it was an option immediately taken up. This was not a matter the Body Corporate manager discussed with the Committee at the time, however the policy renewal terms were discussed at the August Committee meeting.

The decision taken was a) one which did not cost the Body Corporate, and b) one which was of course in the Body Corporate’s best interests.”

An attachment to the submission is a facsimile cover sheet from Gordon Wilson & Associates Pty Ltd dated 11 January 2001 which states as follows, “I can confirm the renewal premium negotiated with Zurich Insurance for the 200/2001 policy period would have been unchanged whether the liability limit had been $10,000,000 or $20,000,000.”

The applicant replies to the submission by stating that there is no mention of insurance in the minutes of the Committee meeting on 25 August 2000. I have read the minutes and can find no reference. The applicant attaches a letter from Gordon Wilson & Associates Pty Ltd dated 26 July 2000 that sets out quotes from three insurers and states it also is not referred to in the Committee minutes.

4.	Authorised the installation of the BBQ as per the Invoice 048452 from Timbermark for $1,836.10 (copy attached).

The applicant attaches an invoice from Timbermark in respect of the installation of a BBQ at a cost of $1,836.10.

The Committee submission relevantly states the following about the matter:

“The replacement of the BBQ was both a specific item detailed in the long term maintenance plan (Sinking Fund Analysis) for the complex, and discussed and approved by the Committee – but the resolution for this approval was not minuted. Ratification of this decision and minuting of it will be carried out by the Committee at its next meeting scheduled for 23^rd Feb.”

In the applicant’s reply, he mentions other invoices that have paid in different circumstances. I will not examine those matters as they are not related to the original application which the Committee submission has addressed.

5.	Authorised the Body Corporate manager to seek the legal advise from Deacons Graham & James as per the attached letter dated 17.05.00.

The applicant attached the relevant advice to the application. The advice indicates that it relates to another application 242-2000.

The Committee submission relevantly states the following about the matter:

“The Committee has repeatedly authorised the Body Corporate manager to seek legal advice whenever the Body Corporate manager thought it necessary to do so – and specifically authorised such action when dealing with Mr Callaghan. The most recent such (minuted) authorisation was at the Committee’s meeting on 17^th November 2000 – minutes attached.

To further reinforce this point, the Committee is expected to ratify this procedural matter at its next meeting, scheduled for 23^rd Feb, and it will be minuted.”

The applicant replies by seeking a variety of orders not sought in the original application. I cannot make those orders. The Body Corporate through its Committee has not been given an opportunity to respond to the application for those orders. The applicant also questions whether it was necessary to incur the expenditure.

Orders

The applicant has sought orders for the distribution of minutes.

I cannot make any of the orders that have been sought. In respect of orders 1 and 2, there are no relevant Committee minutes. In respect of orders 4 and 5, the matters will be referred to a future Committee meeting. In respect of order 3, insurance, it is stated that the matter was discussed at a Committee meeting although there is nothing in the minutes.

In the reply to the Committee’s submission, the applicant has raised a number of new matters including application for further orders. When investigating an application an adjudicator must observe natural justice: section 220(3)(a) of the Act. I cannot make orders in respect of the new matters as it would be contrary to natural justice. They were not raised in the original application and the Body Corporate through its Committee was not give the opportunity to respond to them.

I dismiss the application.