Miami Beach Apartments [2001] QBCCMCmr 40 (30 January 2001)

P G DanielsREFERENCE: 0581-2000

ORDER OF AN ADJUDICATOR

MADE UNDER PART 10 OF CHAPTER 6

BODY CORPORATE AND COMMUNITY MANAGEMENT ACT 1997

Number of Scheme:	3192
Name of Scheme:	Miami Beach Apartments
Address of Scheme:	8-12 Marine Parade MIAMI QLD 4220

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

Ian Stanley Macaulay the owner of lot 3



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

Clarification as to the use of sinking fund monies already paid by unit owners for maintenance and repairs to comply with the 10 year plan can be allocated to pay for the preparation of a town planning proposal that cannot be submitted to the relevant authorities because of a resolution without dissent – Re application of Local Government to redevelop scheme land, which was voted on and lost at the Annual General Meeting of the Body Corporate held on the 16^th July 2000.

is dismissed.1n
STATEMENT OF ADJUDICATOR’S REASONS FOR DECISION - REF 0581-2000

“Miami Beach Apartments” CTS 3192

The applicant, Ian Stanley Macaulay, the owner of lot 3, has sought the following order of an adjudicator under the Body Corporate and Community Management Act 1997 (the Act):

Clarification as to the use of sinking fund monies already paid by unit owners for maintenance and repairs to comply with the 10 year plan can be allocated to pay for the preparation of a town planning proposal that cannot be submitted to the relevant authorities because of a resolution without dissent – Re application of Local Government to redevelop scheme land, which was voted on and lost at the Annual General Meeting of the Body Corporate held on 16^th July 2000.

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)).

I am determining applications 581-2000 and 594-2000 together as they raise similar issues. I will give my reasons in application 581-2000.

The Body Corporate for Miami Beach Apartments is considering redevelopment of the scheme in the context of significant and costly repairs to the common property.

The Body Corporate considered two related motions at its annual general meeting on 25 June 2000. The voting papers stated the motions as follows:

“11. Proposal to prepare Submission for Town Planning Approval

(Ordinary Resolution proposed by the Committee)

That the body corporate resolves to authorise the committee to spend up to a maximum amount of $10,000.00 for the purpose of having a suitably qualified person prepare a submission on behalf of the body corporate for the purpose of obtaining town planning approval to redevelop the scheme land. In making its decision as to who is to prepare the submission, the committee must obtain at least two quotes from suitably qualified persons.

Explanatory Notes:

The purpose of this expenditure is to prepare a professional submission to accompany a development application to the Gold Coast City Council. This is necessary to determine what the redevelopment requirements will be, and to “prove up” the future of the block for discussion with interested buyers or developers.

It is not intended to increase the levy to fund this item. The existing Re-development Fund contains approximately $5,410 from previous budget allocation. The additional funds needed to bring the allocation to $10,000 will be re-directed from the Sinking Fund, by deferring expenditure in this area.

12. Application to Local Government to Redevelop Scheme Land

(Resolution Without Dissent proposed by the Committee)

That subject to the passing of the motion to prepare a submission for town planning approval, the Body Corporate resolves to authorise the Committee to affix the seal of the Body Corporate to the application to the local government for town planning approval to redevelop the scheme land and any other ancillary documentation required to the lodged with the application.

Explanatory Notes:

The purpose of this item is to allow a submission to be made to Council for Material Change of Use, valid for a period of 4 years.

The submission, if successful will not give authority to the Committee to proceed with development or make any further commitment without the approval of the Body Corporate. However, it will provide a tangible asset to the owners and secure a future for the units as a whole, if we wish to proceed further.”

It will be observed that motion 11 related to approval of expenditure of money to prepare a submission to obtain town planning approval. Motion 12 related to authorising the Committee to seal an application and other ancillary documents for town planning approval.

The Body Corporate passed an ordinary resolution in respect of motion 11 but failed to pass a resolution without dissent in respect of motion 12.

The applicant has submitted two grounds in respect of the validity of the ordinary resolution for motion 11. I will consider each ground separately.

The explanatory note to motion 11 provides that the cost of the town planning submission in excess of $5,410 and to a maximum of $10,000 will be paid from the sinking fund. The applicant states that there was no budgetary allocation for the expenditure in the 2000 sinking fund budget. He therefore questions whether the $4,590 can be paid from the sinking fund.

I do not need to resolve this matter due to a development that has occurred. The Body Corporate held an extraordinary general meeting on 26 November 2000 at which the following resolution was passed:

“SPECIAL LEVY

It was resolved that the body corporate resolves to fix a special contribution of $5,350.80 for the purpose of putting into effect motion 11 carried at the annual general meeting on 25 June 2000. The special contribution is determined at the rate of $9.10 per unit of lot entitlement and payable in one instalment on 1 December, 2000.

The chairperson declared the voting results as follows:-

Yes 17 No 4 Abstain 0”

The Body Corporate has now raised a special contribution in respect of the matter.

The second ground of the applicant is that the money should not be expended on the town planning proposal where the Body Corporate failed to pass a resolution without dissent in respect of the substantive application to Council.

Gregory Maiden, the owner of lot 10 and chairperson for the financial year 2000/20001 has addressed that matter in his submission as follows:

“Motion 11: This motion sought funds for the preparation of a redevelopment submission to Council.

The explanatory notes explain that this is a submission to accompany a development application. The preparation of the submission will include the development of a detailed concept plan based upon a viability assessment. The aim of the submission is to give the Body Corporate a tangible proposal for Council to consider, in order to determine what is allowable and to “prove up” the future potential of the property.

The preparation of the submission also includes discussions with Council during the preparation. If the concept plans, viability assessment and Council discussions indicate that the submission is unviable or unacceptable to Council, then the Body Corporate would not proceed with a formal redevelopment application.

...

Motion 11 is necessary to allow the redevelopment investigations to proceed.

Motion 12 seeks authorisation to submit an application to Council for approval for redevelopment.

...

It must be stressed that the preparation of the submission (Motion 11) and the town planning application (Motion 12) are separate items. The reason that Motion 11 was not made dependent on Motion 12, as Mr Macaulay implies should be the case, was that the outcome of the preparation of the redevelopment submission could in fact determine or alter the attitude of the members of the Body Corporate towards the application.

If Motion 11 were made subject to Motion 12, then the necessary studies would never proceed.

Motion 12 was included to confirm who, at present, would be in support of an application to allow the town planning application to proceed.”

I would not invalidate the 26 November 2000 resolution based on the second ground of the applicant. It may be the case that at some time in the future appropriate Body Corporate approval can be obtained for the town planning application. I would not restrain the Body Corporate from progressing work on the matter in the interim.

Sections 87 and 114 of the Act provide that a Body Corporate must administer, manage and control the common property reasonably and for the benefit of all owners. Additionally, section 108 of the Body Corporate and Community Management (Accommodation Module) Regulation 1997 imposes maintenance duties on the Body Corporate in respect of the common property and other parts of buildings. In my view, approval of the expenditure for the submission is within these powers and duties.

I have found that the grounds of the applicant do not justify making an order in respect of the matter. I dismiss the application.