Bayview Shores [2001] QBCCMCmr 329 (18 June 2001)

P G DanielsREFERENCE: 0359-2001

ORDER OF AN ADJUDICATOR

MADE UNDER PART 10 OF CHAPTER 6

BODY CORPORATE AND COMMUNITY MANAGEMENT ACT 1997

Number of Scheme:	4078
Name of Scheme:	Bayview Shores
Address of Scheme:	5 Bayview Street RUNAWAY BAY QLD 4216

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

John William Mitchell a co-owner of lot 39



P G DanielsI hereby order that the application for interim and final orders that prevent the implementation of a Committee decision under section 35 of the Body Corporate and Community Management (Standard Module) Regulation 1997 regarding refurbishment of the Club Lounge and to have the matter considered at a formal meeting of the Committee is dismissed.1n
STATEMENT OF ADJUDICATOR’S REASONS FOR DECISION - REF 0359-2001

“Bayview Shores” CTS 4078

The applicant, John William Mitchell, a co-owner of lot 39, has sought interim and final orders of an adjudicator under the Body Corporate and Community Management Act 1997 (the Act) that prevent the implementation of a Committee decision under section 35 of the Body Corporate and Community Management (Standard Module) Regulation 1997 regarding refurbishment of the Club Lounge and to have the matter considered at a formal meeting of the Committee.1n

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)).

On 8 June 2001, I made an order that restrained the implementation of resolutions relating to the refurbishment of the Club Lounge until after 18 June 2001. With the benefit of submissions I am now in a position to make final determinations of application 359-2001 and a similar application 360-2001. I have decided to make final determinations at this stage given the nature of the disputes. The background to the disputes is as follows.

Background

The Body Corporate resolved at its annual general meeting on 25 March 2001 to refurbish the Bayview Shores Club Lounge (the Club Lounge) for an amount not exceeding $60,000. The following resolution was passed:

“RESOLVED the Owners Bayview Shores CTS 4078 authorises the Committee to review proposals for the refurbishment of the Bayview Shores Club Lounge, and bearing in mind the results of the survey of owners’ preferences in relation to interior designers’ display/swatch boards, be authorised to obtain detailed quotations and proceed with a full refurbishment including floor coverings, furniture, window coverings, painting, etc. for an amount not exceeding $60,000.”

On 2 April 2001, the Committee resolved to employ an interior decorator. The resolution provided as follows:

“That the Committee resolve to employ an interior decorator to organise and supervise the redecoration of the club lounge in accordance with the specific instructions of the Committee and in accordance with the owners survey and the resolution of the Annual General Meeting, with final Committee approval prior to commencement.”

Other resolutions were passed in respect of particular work to be done. For example, “That the existing wall paper be removed and that the walls, ceiling, trims, skirting, doors, frames etc to be repainted.” The following resolution was then passed in respect of the work related resolutions:

“That Lysette Woodman seek appropriate persons and obtain quotations for their services and to provide samples of materials to be used and for Lysette to report back to the Committee at the earliest opportunity.”

On 1 May 2001, the Committee resolved to appoint Interior Collections as the interior design consultant. The Committee also passed three resolutions in respect of particular work, namely, furniture refurbishment, painting and installation of sun blinds. The resolutions provided as follows:

“That the Committee agree to the refurbishment of the Club Lounge furniture with the fabrics as decided by the Committee, with the options of covering the chairs with a plainer fabric and purchasing the final fabric from the new collection afters its release in May for a total cost not exceeding $13800.

That the Committee agree to the painting of the walls, ceilings and bar fronts and to the decorative painting of the pillars in the patterns chosen by the Committee and in colours coordinating with the chosen fabrics for a total cost not exceeding $11000.

That the Committee authorise the fitment of blinds for a cost not exceeding $8000.”

It will be observed that the 1 May 2001 resolutions were more specific than the 2 April 2001 resolutions. The Committee was making progress in the management of the Club Lounge project.

The Secretary of the Body Corporate, Mr Don Kerr, forwarded a motion to Committee members regarding the Club Lounge project. The motion provided further details in respect of specific work, namely, new carpet, paintwork and furniture refurbishment. Additionally, the motion proposed that authority be given to Mr Kerr to give instructions to Interior Collections. The motion was circulated pursuant to section 35 of the Body Corporate and Community Management (Standard Module) Regulation 1997 (the Regulation) which provides as follows:

Voting outside committee meetings

35.(1) A resolution on a motion before the committee is a valid

resolution of the committee, even though the motion is not passed at a

meeting of the committee called and conducted under division 7, if—

(a) notice of the motion is given to all committee members or, in an

emergency, as many members as it is practicable to contact; and

(b) a majority of all voting members of the committee agrees to the

motion.

(2) The notice must be given in writing, and the members’ agreement to

the motion must be given in writing but, in an emergency, the notice may

be given, and the member’s agreement expressed, orally or by another

appropriate form of communication.

(3) For the operation of sections 34(1) and (2) and 37, the committee, in

dealing with a resolution under this section, is taken to deal with the

resolution at a meeting of the committee.

Section 35 provides for Committee resolutions to be passed in the absence of a formal Committee meeting.

Mr Kerr distributed the motion to Committee members by letter dated 4 June 2001. He makes reference to a discussion group on 4 June 2001 at which the Club Lounge project was raised. He attaches two letters from Interior Collections dated 22 May 2001 and 1 June 2001. I have read both of these letters.

I will set out the motion in full as it is under challenge in this application:

“MOTION

The Committee approves that the following materials and paintwork be purchased to refurbish the Club Lounge in accordance with the broad principles approved at the committee meetings on the 1^st April and 2^nd May 2001.

New Carpet

1. The carpet, selected from the samples provided, to be:

Quest Carpets, Lattice, Colour Cedar, Composition 100% pure new wool laid on premium gold rubber underlay supplied by Andersens Carpets at a cost not exceeding $10,000.

Paintwork

2. The walls and ceilings to be repainted as under for a total cost not exceeding $11,000:

Ceiling: White ceiling paint

Walls: Bristol Cape York half strength lo sheen

Pelmets & Cornice: Bristol Cape York half strength lo sheen

Skirting Boards Bristol Cape York full strength gloss

Doors and Trims: Bristol Cape York full strength gloss

Cabinets: Bristol Quicksand gloss

Pillars: Marble effect using Bristol Cape York as the base.

Furniture Refurbishment

3. The fabrics as follows, including teflon coating, submitted and recommended by Interior Collections on 1^st June 2001, be accepted at a cost not exceeding $7,500:

Dining Room

Chairs (24) Redelman Ringmaster Seabreeze Code 1351

2 metres spare

fabric for future

repairs Redelman Ringmaster Seabreeze Code 1351

2-Seater Sofas (3) Redelman Wild Nights Code 2152

Arm chairs (12)

4 chairs Redelman Wildnights Code 2152

4 chairs Redelman Ringmaster Seabreeze Code 1351

4 chairs Redelman Ringmaster Rouge Code 1349

4. The furniture frames be restored and painted with Bristol Quicksand gloss and upholstery fabric be fitted at a cost not exceeding $9,750.

Action Required

5. The Secretary to give clear and concise instructions to Interior Collections of Paradise Point for the work to be carried out as soon as practicable.”

Once again it will be observed that the resolutions were more specific than previous resolutions in respect of the matters determined.

The motion is supported by at least a majority of the Committee. Four supporters of the motion have made a joint submission in response to the application (the submission). They are Mr Don Kerr, Mr Norman Harper, Ms Elaine Bermingham and Mr Malcolm Huth. I have also read and taken into account the reply of the applicant dated 16 June 2001. Two submissions have been received from non-committee members, A.J. and J.M. Lane and Neville Mason. Whilst those persons were not invited to make submissions I have read their letters in the course of determining this application.

The applicant forwarded a letter to Mr Kerr stating that he thought the matters raised in the above motion should be determined at a formal committee meeting. Mr Kerr responded by memorandum dated 6 June 2001.

I will now consider the various grounds raised by the applicant.


Grounds

1.	Significant departure from a previous Committee position.

The applicant has provided no specific details of the departure in his application although the matter is discussed in his reply. There is an increase in the expenditure on upholstery fabric. However, that is not significant and within the level of expenditure the Committee is allowed to approve: see sections 103 and 104 of the Regulation and definitions of relevant limit for committee spending and relevant limit for major spending in the Schedule Dictionary. I have examined these provisions more fully in application 360-2001. The motion also provides for $10,000 expenditure on carpet. That specific expenditure had not been approved by the Committee previously. Consequently, it does not involve a departure from a previous Committee position. The submission states the following in respect of the matter, “We have one quote for the carpet for $9660.00. Naturally a further quote will be sought before a final decision on where to buy is made.”

2.	Variation from the Body Corporate wishes as indicated in a survey.

The applicant has not specifically indicated the variation. The applicant mentions in his reply to submissions that the choice of fabric to cover the furniture did not seem to conform to the survey. The survey is also mentioned in the submission from A.J. and J.M. Lane and briefly mentioned in a submission from Ms Elaine Bermingham. However, there are insufficient grounds to address the matter. An owner can bring another application in respect of the matter. However, proper grounds would need to be supplied.

3.	Considerable but unassessed cost

The submission addresses the cost. The submission addresses an original costing for the project and a new costing taking into account the increase in expenditure for the furniture upholstery. It is clear to me that the cost has been assessed and that it is within the $60,000 limit set by the Body Corporate at its general meeting on 25 March 2001.

4.	No assessment of cash position or cash flows

The applicant has provided no evidence in his application to indicate that the Body Corporate will be unable to meet financial obligations flowing from the motion. The applicant expresses concern in his reply to submissions about the cash flow position of the Body Corporate. He notes the increase in expense of the fabric for the chairs. He states that it had been planned for the carpet to be paid in the second stage of the Club Lounge project. There is insufficient evidence before me to rule on the matter. I do not even know when it is intended to implement the resolution regrading the carpet. There will be some time involved given that it is intended to obtain a second quote. I suggest all members of the Committee take the matter into account. The matter can be reconsidered by further application should a problem exist or arise. Of course, evidence of the financial situation of the Body Corporate would need to be produced.

5.	No consideration of alternative suppliers or quotes

As I have indicated in my reasons in application 360-2001, the requirement to obtain two or more quotes only arises where expenditure is above the relevant limit for major spending. That is $20,200 for this scheme. The motion does not provide for expenditure in excess of that amount. The submission does state that one quote has been obtained for the carpet and another quote will be obtained before a final decision is made.

6.	No urgency or emergency that would justify Section 35 treatment, but that the issues involved would be more properly handled through the formal committee process.

It is not necessary for an emergency to exist for the process provided by section 35 of the Regulation to be used.

There is no basis to make the order sought. I dismiss the application. By dismissing the application, my previous interim order dated 8 June 2001 lapsed: section 225(2) of the Act.


Concluding comments

A matter of some considerable concern to me is that two similar applications have been brought by the chairperson and treasurer and they have been opposed by four other members of the Committee.

The two applications suggest that there is a level of conflict within the Committee.
The matter concerns me as it will be necessary for this Committee to continue to work together for a substantial period in respect of important matters, including the Club Lounge project.

I encourage all members of the Committee to try and work together harmoniously in the interests of the Body Corporate. I am sure all members of the Committee will agree that the interests of the Body Corporate are better served by a Committee that works together and resolves conflict in a respectful and positive manner.