Maria Creek Estate [2002] QBCCMCmr 357 (4 June 2002)

P J HANLYREFERENCE: 0119-2002

ORDER OF AN ADJUDICATOR

MADE UNDER PART 10 OF CHAPTER 6

BODY CORPORATE AND COMMUNITY MANAGEMENT ACT 1997

Number of Scheme:	25253
Name of Scheme:	Maria Creek Estate
Address of Scheme:	51 Rebecca Jane Parade KURIMINE BEACH

TAKE NOTICE that pursuant to an application made under the abovementioned Act by Michael John Taifalos and Shirley Matthews, the co-owners of lot 1; Melivan Pty Ltd, the owner of lot 4; and Claude Humphrey Marsh and Shirley Joy Marsh, the co-owners of lot 5;

I hereby order that the wall, which has been erected on the common property between lots 3 and 4, shall be removed by the owners of lot 3, Peter Alfred George Hablethwaite and Marcia Heather Hablethwaite, within 3 months of the date of this order, unless within that same period, and upon application by the owners of lot 3, the body corporate resolves by special resolution to authorise the erection of the wall.

I further order that all costs associated with the erection and/or the removal of the wall shall be borne by the owners of lot 3, Peter Alfred George Hablethwaite and Marcia Heather Hablethwaite.

I further order that the annual general meeting purportedly held on 8 March 2002 was at all times void.

STATEMENT OF ADJUDICATOR’S REASONS FOR DECISION - REF 0119-2002

“Maria Creek Estate” CTS 25253

The applicants, Michael John Taifalos and Shirley Matthews, the co-owners of lot 1; Melivan Pty Ltd, the owner of lot 4; and Claude Humphrey Marsh and Shirley Joy Marsh, the co-owners of lot 5; have sought an order of an adjudicator under the Body Corporate and Community Management Act 1997 (the Act), in respect of the wall, which has been partly constructed by the owners of lot 3, Peter Alfred George Hablethwaite and Marcia Heather Hablethwaite, on common property separating lot 3 from lot 4. The applicants have also sought an order declaring the annual general meeting held on 8 March 2002 void.

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 applicants state that they believe that if the Hablethwaites wish to construct a wall it should be constructed on their lot and at their expense. The applicants also express the view that the wall will degrade the appearance of the estate. They also point out that the wall has not been approved by special resolution of the body corporate. In addition, the applicants complain of the secretary’s failure to send nomination papers for the committee prior to the annual general meeting, which was held on 8 March 2002.

Submissions were sought from Mr and Mrs Hablethwaite prior to determination of the interim order application. In that submission, the Hablethwaites essentially stated that Mr Hablethwaite was merely carrying out his role as a committeeman by implementing the resolutions of the body corporate, carried at meetings held on 10 January 2002 and 15 February 2002. The Hablethwaites also stated that the body corporate resolved at the annual general meeting held on 25 May 2000 to adopt a particular course of action in relation to the calling and holding of meetings.

After the interim order was made on 13 March 2002, the body corporate and the Hablethwaites were invited to respond to the application in relation to final orders. A further submission was received from the Hablethwaites, in which copies of various minutes of meetings were enclosed, as well as a sketch of the location of the subject wall.

The applicants replied to the material lodged by the Hablethwaites. In addition, the applicants provided a copy of a notice of meeting dated 14 May 2002 calling an extraordinary general meeting for 7 June 2002. Mr Hablethwaite also provided this office with a copy of the notice of meeting.

The Hablethwaites state that the wall constructed on the common property between lots 3 and 4 was approved by the body corporate at a general meeting held on 3 January 2002. The motion purporting to approve the fence-wall (as it was described in the minutes) did not refer to the cost of the wall, but stated that the wall was intended to give protection to persons on the common property and/or lot 3 from the noise pollution of the air-conditioner installed in the residence erected on lot 4. On 10 January 2002, at a meeting of the Architectural and Garden Review Committee (A & G R)(which has been noted in an earlier adjudicator’s order as merely a recommendatory body – Application 0719-1999), the Hablethwaites purported to resolve to engage a builder (unnamed) to erect the wall. Once again the cost of the wall was not mentioned. The chairperson, one of the applicants in this application, voted against the motion to engage the builder, stating that he did not consider that the wall would have the desired effect.

On 7 February 2002 Mr Hablethwaite wrote to the chairperson, advising him that the cost of the wall exceeded the amount that had been authorised (which was not disclosed anywhere in the minutes in any event), and stating that the builder had recommended a different type of construction. A further meeting of the A & G R was called for 15 February 2002. At that meeting, the Hablethwaites voted in favour of the new wall, and the chairperson once again voted against the motion. Construction of the wall was subsequently commenced, until it was stopped by my interim order dated 13 March 2002.

The Hablethwaites rely upon section 113 of the Body Corporate and Community Management (Standard Module) Regulation 1997 as support for the construction of the wall. That section deals with improvements to common property by the body corporate. The wall in question is not an improvement for the benefit of the body corporate. The Hablethwaites have complained of the noise allegedly being emitted by the air-conditioner on lot 4. It is apparent that the wall is intended to be for their benefit. The relevant section, therefore, is section 114, which provides that the body corporate may, if asked by the owner of a lot, authorise that owner to make an improvement to the common property for the benefit of the owner’s lot. The cost of any authorised improvement would have to be borne by the lot owner. The section further provides that the improvement must be authorised by special resolution unless it is a minor improvement (which is defined as being an improvement with an installed value of $200.00 or less). The wall has not been authorised by special resolution. Mr Hablethwaite is incorrect in stating that all motions must be decided by ordinary resolution, unless he decides otherwise (see minutes of extraordinary general meeting held on 15 April 2002). I therefore propose to order that the wall must be removed, unless within 3 months of the date of my order the body corporate authorises its construction by special resolution.

In addition, the cost of the wall ($2,200.00) exceeds the limit for major spending for this scheme (being the number of lots multiplied by $200.00) and therefore section 104 of the module requires that at least two quotations must be given to owners for their consideration. This means that at the general meeting at which the wall is to be further considered, there should be at least two motions proposed, with each motion incorporating a quote for the cost of the wall. Owners will then have the opportunity to properly consider the proposal, as the Act and the regulation module intended.

If, on the other hand, the Hablethwaites wish to construct the wall wholly within their own lot, and at their own expense, then they do not require authorisation of the body corporate in general meeting, but, under by-laws 5 and 9, would only require approval from the A & G R committee (notwithstanding that this committee is only recommendatory, as stated earlier.)

Turning to the purported annual general meeting, held on 8 March 2002, I note that the Hablethwaites rely upon motions 7(g) and 7(h), carried at the annual general meeting held on 25 May 2000, as the authority for their having called the 8 March 2002 meeting in the way in which they did. This view is incorrect. Section 13 of the module provides the mechanism by which nominations are made to the committee. In particular, section 13(3) provides that the notice inviting owners to nominate for the committee must be given at least 3 weeks before, but not earlier than 6 weeks before, the end of the body corporate’s financial year. Section 42 of the module also provides for the notice of general meeting. In particular, section 42(3) provides as follows:

(3) The notice of a proposed general meeting must—

(a) contain an agenda for the meeting; and

(b) be accompanied by—

(i) a proxy form; and

(ii) if the notice is given to the corporate owner of a lot—a form

under which the lot owner may advise the body corporate of

the corporate owner nominee; and

(c) be accompanied by a voting paper—

(i) stating each motion to be considered at the meeting and, if

the motion is not proposed by the committee, stating the

name and lot number of the person proposing the motion;

and

(ii) stating for each motion whether a resolution without dissent,

special resolution or ordinary resolution is required; and

(iii) enabling a person who is a voter for the general meeting to

record a written vote on each motion to be considered at the

meeting; and

(d) contain or be accompanied by explanatory or other materials

required under this regulation to be contained in or to accompany

the notice.10 (emphasis added)

Section 45 of the module also provides for the agenda for a general meeting, as follows:

Agenda for general meeting

45.(1) The committee must prepare an agenda for each general meeting.

(2) The agenda must include—

(a) the substance of the following motions—

(i) motions the committee proposes for consideration at the

meeting;

(ii) if the general meeting is a requested extraordinary general

meeting—the motions proposed in the notice asking for the

meeting;

(iii) a motion submitted under section 41 12 by a member of the

body corporate and required to be included in the agenda;

(iv) if an adjudicator makes an order under the dispute resolution

provisions authorising or requiring the calling of the general

meeting to consider motions stated in the order—the

motions stated in the order;

(v) if there has been a previous general meeting—a motion to

confirm the minutes of the last meeting; and

(b) if the general meeting is the first annual general meeting for the

scheme—the business required to be considered at the first annual

general meeting.

(3) If the general meeting is an annual general meeting (other than the

first annual general meeting), the agenda must also—

(a) provide for the presentation of the accounts for the financial year;

and

(b) provide for the appointment of an auditor of the body corporate’s

accounts for the next financial year or for a special resolution that

the accounts are not to be audited; and

(c) provide for the approval of a budget for the financial year; and

(d) provide for fixing the contributions to be paid by the owners of

lots for the financial year; and

(e) include other things that are, under the Act, required to be

included on the agenda for the annual general meeting.

(4) If the lot owner seeking the inclusion of a motion under

subsection (2)(a)(iii) supplies an explanatory note about the motion, and the

note is not longer than 100 words, the note must accompany the agenda.(emphasis added)

Sections 94 and 95 of the module also provide for budgets and contributions to be levied on owners. Section 100 of the module provides that the body corporate must establish and keep an administrative fund and a sinking fund. None of these sections has been complied with. Overall, the relevant requirements of Parts 4, 5, 7 and 8 of the module have not been met. Owners cannot resolve to ignore or modify these sections of the module.

The annual general meeting purportedly held on 8 March 2002 did not comply with the module in any respect whatsoever. I therefore propose to order that the meeting was at all times invalid. I note that there is a meeting scheduled for 7 June 2002. This meeting purports to remedy earlier defects. It does not do so, however, I have not been asked to make any order in respect of that meeting at this stage.