La Sabbia [2001] QBCCMCmr 553 (5 November 2001)

P J HANLYREFERENCE: 0568-2001

ORDER OF AN ADJUDICATOR

MADE UNDER PART 10 OF CHAPTER 6

BODY CORPORATE AND COMMUNITY MANAGEMENT ACT 1997

Number of Scheme:	24687
Name of Scheme:	La Sabbia
Address of Scheme:	74 Old Burleigh Road SURFERS PARADISE QLD 4217

TAKE NOTICE that pursuant to an application made under the abovementioned Act by the Body Corporate for La Sabbia CTS 24687

I hereby order that the application for an order that motions 2, 3 and 4 of the extraordinary general meeting of the body corporate held on 6 August 2001 be carried and that the secretary of the body corporate be authorised to lodge a new community management statement with the Registrar of Titles, is dismissed.


STATEMENT OF ADJUDICATOR’S REASONS FOR DECISION - REF 0568-2001

“La Sabbia” CTS 24687

The applicant, the Body Corporate for La Sabbia CTS 24687, has sought the following order of an adjudicator under the Body Corporate and Community Management Act 1997 (the Act), quote -

Pursuant to section 134 of the Body Corporate and Community Management Act 1997 (the Act), the applicant seeks an order that motions 2, 3 and 4 of the extraordinary general meeting of the body corporate held on 6 August 2001 be carried and that the secretary of the body corporate be authorised to lodge a new community management statement with the Registrar of Titles.

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 stated that the body corporate is desirous of creating a new car-washing bay out of a car space transferred to common property from the owner of lot 25, who presently has the exclusive use of that bay for car parking purposes. The applicant further stated that the owner of lot 25 is to receive another area of exclusive use for car parking purposes, and is also to receive the sum of $3,000.00 by way of compensation for expenses incurred by her in relation to the proposed transfer, although the exact nature of these expenses was not specified. The applicant expressed the view that the opposition of 3 owners to the proposal is unreasonable because the body corporate must administer the common property and body corporate assets for the benefit of owners, and the proposal will provide a more satisfactory car-washing bay for owners. In a letter dated 29 October 2001 from the secretary to this office, it was further stated that the existing car-washing bay has no drainage, thereby allowing water to puddle with constant use, which is a nuisance to everyone in the area. The secretary considered that if the alternate car space cannot be converted to a proper car-washing bay, then it is likely that the current car-washing bay will have to be closed down. In support of this opinion, the secretary enclosed a letter dated 15 October 2001 from the owner of lot 123, in which strong opposition to the current car-washing bay was expressed.

The three owners who voted against motions 2, 3 and 4 were invited to respond to the application. Submissions were received from two of those three owners. One of the owners expressed concern that if the proposed car-washing bay were to be located next to her car space, water might damage goods stored in a storage shed installed in her car space.



The other owner expressed numerous concerns, namely:

• That the body corporate is currently facing substantial costs to rectify serious and on-going faults in the air conditioning system, electrical wiring and ventilation within the garage.

• That a less expensive alternative car-washing bay could be established e.g. in an existing area to the side of the driveway entrance to the building which could be screened from the street by planting

• That during the summer months particularly, excessive water usage and run-off could provide substantial inconvenience to owners adjacent to the proposed bay

• That owners are facing substantial increases in the Administrative Fund

• That owners have been advised that the Sinking Fund balance is insufficient and needs to be reviewed and increased prior to the 2002 AGM

I note from the Chairperson’s Report attached to the owner’s submission that the Administrative Fund is showing a deficit of more than $26,000.00. Furthermore, the chairperson stated that various “unbudgeted costs” were met from the Sinking Fund in the last financial year. The chairperson concluded that levies had to increase by a significant amount.

Section 223(3)(u) of the Act provides that an adjudicator may

if satisfied that a motion (other than a motion for reinstatement,

termination or amalgamation) considered by a general meeting

of the body corporate and requiring a resolution without dissent

was not passed because of opposition that in the circumstances is

unreasonable—make an order giving effect to the motion as

proposed, or a variation of the motion as proposed;

I am not satisfied that the proposed car-washing bay would cause the goods in the storage shed to be damaged by water penetration. The material before me reveals that the car-washing bay was to be enclosed by Perspex walls and provided with appropriate plumbing to accommodate all water flow during its use. If that were the only objection then I would be prepared to make an order giving effect to the motion as proposed. However, I consider the other objections to be reasonable.

In the first instance, the body corporate has obviously not budgeted adequately for its expenses over the past two or three (or perhaps more) years. The Standard Module, by which this scheme is regulated, is quite specific as to the nature and content of the administrative fund and the sinking fund budgets. In addition, it provides that the sinking fund budget must allow for raising a reasonable capital amount both to provide for necessary and reasonable spending from the sinking fund for the financial year and also to reserve an appropriate proportional share of amounts necessary to be accumulated to meet anticipated major expenditure over at least the next 9 years. It also provides that if a liability arises for which no provision, or inadequate provision, has been made the body corporate must fix a special contribution to be levied on owners. As a consequence of the inadequate budgets, owners are now faced with an enormous increase in their levies, a fact which no doubt will not be pleasing to most owners. In such circumstances it is reasonable, in my view, for an owner to suggest that alternative, and less expensive, sites for a car-washing bay should have been proposed for owners’ consideration. It is also reasonable for an owner to oppose the expenditure of monies for which no provision appears to have been made in the budget.

In the second instance, owners have not been advised that the owner of lot 25 is to receive $3,000.00 by way of compensation for relinquishing her car parking space. The sum of $15,000.00 specified in motion 4 was said to cover costs of legal fees, plumbing, drainage, electrical, enclosure of the bay and erection of a storage area. No mention was made of that figure including a payment to the owner of lot 25, who is to receive an alternative, although smaller, car parking space in any event. I also note that the alternative car parking space is adjacent to the second car parking space already allocated to the owner of lot 25, which suggests that perhaps the alternative car parking space may be even more convenient to her than the car parking space, which she is prepared to relinquish.

In my view, owners should have been informed of the complete breakdown of the sum of $15,000.00 before they were invited to vote on the motion, and, if it had not been budgeted, as seems to be the case, a further motion to fix a special contribution should also have been proposed. The amount of $15,000.00 is not “budgeted for in motion 4” as suggested by the body corporate’s solicitors in their letter dated 3 October 2001 to this office.

In all of the circumstances, I do not propose to make the order sought by the applicant in respect of motion 2. It follows that I shall also not make the order sought in respect of motions 3 and 4.