Cirrus [2001] QBCCMCmr 42 (31 January 2001)

P J HANLYREFERENCE: 0050-2001

ORDER OF AN ADJUDICATOR

MADE UNDER PART 10 OF CHAPTER 6

BODY CORPORATE AND COMMUNITY MANAGEMENT ACT 1997

Number of Scheme:	9831
Name of Scheme:	Cirrus
Address of Scheme:	39 Canberra Drive CALOUNDRA QLD 4551

TAKE NOTICE that pursuant to an application made under the abovementioned Act by the Body Corporate for Cirrus CTS 9831


I hereby order that the application for an order of an adjudicator authorising the committee of the body corporate to spend funds above the relevant limit for committee spending for this scheme for the installation of a new electrical switchboard is refused as the cost of the installation exceeds the limit for major spending for this scheme.



STATEMENT OF ADJUDICATOR’S REASONS FOR DECISION - REF 0050-2001

“Cirrus” CTS 9831

The applicant, the body corporate for Cirrus CTS 9831, has sought an order of an adjudicator under the Body Corporate and Community Management Act 1997 (the Act) that the committee of the body corporate be authorised to spend in excess of its relevant limit for committee spending, on the basis that the spending is required to meet an emergency. Specifically, the order is sought to authorise the committee to spend funds up to a maximum of $4895.00 on the installation of a new electrical switchboard.

Section 103(1) of the Body Corporate and Community Management (Standard Module) Regulation 1997 (the standard module) provides in part as follows -

The committee may only carry out a proposal involving spending above the relevant limit for committee spending for the scheme if ... an adjudicator is satisfied that the spending is required to meet an emergency and authorises it under an order made under the dispute resolution provisions.

The module defines the “relevant limit for committee spending” as an amount worked out by multiplying the number of lots included in the scheme by $100. Given that there are 24 lots in this scheme, then the relevant limit for committee spending is $2,400.00. The applicant seeks authorisation to expend up to a maximum of $4895.00. The module also defines the “relevant limit for major spending” as an amount worked out by multiplying the number of lots in the scheme by $200. The relevant limit for major spending for this scheme, is, therefore, $4,800.00. In these circumstances, section 103(3) of the module provides that section 103 has effect subject to the requirements for spending that is above the limit for major spending. Section 104 of the module provides as follows:

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.

In the application, the applicant states that the electrical switchboard needs replacing. The applicant further states that if the switchboard were to be damaged now, the entire building would be without power, affecting the lifts and the water supply. In addition, the applicant has attached copies of three quotes, and has recommended the acceptance of the middle-priced quote because the contractor is local, and it is therefore considered that after-sales service will be easier.

Regrettably, whilst I am satisfied that the expenditure falls within the category of emergency expenditure, I am unable to make the order sought because of the provisions of section 104 of the module. The body corporate must now call an extraordinary general meeting, at which the available quotes must be incorporated into motions for owners to consider. As there are three quotes, the committee can put three motions on the agenda, each incorporating a quote, although the requirements of the section will be met as long as there are at least two motions incorporating two quotes on the agenda for owners to consider.switchboard refused$4895.00switchboardnmmmquotesnotexceeds major spending limit