Finisterre Villas [2002] QBCCMCmr 449 (15 July 2002)

DJ ReardonREFERENCE: 0336-2002

INTERIM ORDER OF AN ADJUDICATOR

MADE UNDER PART 10 OF CHAPTER 6

BODY CORPORATE AND COMMUNITY MANAGEMENT ACT 1997

Number of Scheme:	17318
Name of Scheme:	Finisterre Villas
Address of Scheme:	129 Woodward Street EDGE HILL QLD 4870

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

Norman Griffett and Lynn Cropp,

DJ ReardonI hereby order that the application for an interim order that “The accounts for the year ended 31^st March 2002 be adjusted to include either in Note form or by way of an outstanding charge for the shortfall in the sinking fund based on the Quantity Surveyors report dated 18^th January 2000” is dismissed.

I further order that the application for an interim order that “The lot owners who declined to pass the motions covering items eleven and twelve on the agenda for the Annual General Meeting held on Friday 10^th May 2002 be requested to show cause why the motions should not be passed, either individually or collectively” is dismissed.

I further order that the application for an interim order that “The annual sinking fund fee is revised to ensure that the value at 31^st March 2003 is a reflection of the Quantity Survey dated 18^th January 2000” is dismissed.

I further order that the application for an interim order that “An auditor is appointed to improve the independence of the financial reporting of the Body Corporate” is dismissed.

I further order that the Body Corporate must not remove or otherwise interfere with, or engage a person to remove or otherwise interfere with, the garden shed erected on common property by the Owners of Lot 3.

I further order that within 7 days of the date of this order, the Secretary for the Body Corporate must provide a copy of this interim order and the accompanying statement of reasons to the Owners of Lots 1,2 and 4.

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STATEMENT OF ADJUDICATOR’S REASONS FOR DECISION - REF 0336-2002

“Finisterre Villas” CMS 17318

1.	Orders sought

The Applicants, the Owners of Lot 3, have sought a number of orders of an adjudicator under the Body Corporate and Community Management Act 1997 (“the Act”) concerning motions considered by the Body Corporate at an annual general meeting held on 10 May 2002.

In addition, the Applicants have also sought the following interim orders of an adjudicator

“11.1 The accounts for the year ended 31^st March 2002 be adjusted to include either in Note form or by way of an outstanding charge for the shortfall in the sinking fund based on the Quantity Surveyors report dated 18^th January 2000.

11.2 The lot owners who declined to pass the motions covering items eleven and twelve on the agenda for the Annual General Meeting held on Friday 10^th May 2002 be requested to show cause why the motions should not be passed, either individually or collectively. Pending that decision Lot owner 3 be allowed to leave the construction in place pending a result of arbitration.

11.3 The annual sinking fund fee is revised to ensure that the value at 31^st March 2003 is a reflection of the Quantity Survey dated 18^th January 2000

11.4 An auditor is appointed to improve the independence of the financial reporting of the Body Corporate”.

Section 225(1) of the Act provides that an adjudicator may make an interim order if satisfied, on reasonable grounds, that an interim order is necessary because of the nature or urgency of the circumstances to which the application relates. An adjudicator’s order may contain ancillary or consequential provisions the adjudicator considers necessary or appropriate (section 230(1)).

The community management statement for the “Finisterre Villas” community titles scheme indicates that the Body Corporate and Community Management (Standard Module) Regulation 1997 (“the Standard Module”) applies to the scheme.

2.	Interim orders

In this particular decision I am solely concerned with the application for interim orders. In any consideration of an application for an interim order, it is necessary to determine at the outset whether, because of the nature or urgency of the circumstances relating to the application, an interim order is in fact necessary or appropriate. The examples included in the Act under section 225(1) are suggestive of the usual circumstances where an interim order might be made. Both examples are in the nature of injunctive relief. Whilst the range of matters that might be the subject of an interim order is not capable of definition, the applicant does need to establish that the circumstances of the application warrant the making of an interim order.

An interim order will not be made, or will be refused, in circumstances where the only urgency relates to the applicant’s desire to resolve or expedite the matters in dispute, or where the nature of the circumstances are such that the matter is not capable of being dealt with in the context of an interim order. Again, it is not possible to define these circumstances.

3.	Matters in dispute

As stated previously, this application concerns a number of motions considered by the Body Corporate at an annual general meeting held on 10 May 2002.

In my view a number of the interim orders sought by the applicant effectively require a final determination of the matters in dispute. In this regard I am particularly referring to the Applicants’ request for interim orders seeking adjustment of the financial statements for the period ending 31 March 2002, the revision of the owners contributions to the sinking fund, and the appointment of an auditor. In my view, it will be necessary to investigate these matters, including allowing affected parties to make written submissions, before a proper determination of the issues can be made. As a further consideration, I do not consider that the Applicants have provided any convincing reasons regarding the urgency of these matters that would warrant the making of interim orders.

The Applicants have also sought an interim order that the owners who voted against motions 11 and 12 at the annual general meeting of 10 May 2002 be requested to “show cause” as to why the motions should not be passed. While I do not intend to order the relevant owners to respond to the application, I do anticipate that all owners of lots included in the scheme will be invited to make a written submission about the application before a final order is made. It is a matter for owners to decide whether to make a written submission, however, I would point out to owners that it is clearly in their interests to submit their opinions and points of view on the mattes before final decisions are made regarding the application.

The Applicants have also sought an interim order that they be allowed to leave a garden shed that has been erected on common property in place pending determination of this application. I understand from the supporting material to the application that the garden shed is approximately 3.1 metres by 2.4 metres, and it appears that the garden shed has been erected on the southwestern aspects of the common property.

While, the Applicant has not demonstrated that the Body Corporate intends to take any action to remove the garden shed from the common property, I note that the minutes of the annual general meeting of 10 May 2002 record the following in respect of motion 12:

“Note: Owner of Lot 3 is required to dismantle the garden shed installed without approval and to restore area to its original condition.”

In the circumstances, and in the interests of clarifying the interim position, I consider that it is reasonable for me to make an interim order that the Body Corporate not take any steps to remove or otherwise interfere with the garden shed, or engage a person to remove or otherwise interfere with the garden shed until this matter is determined by final order. In making this determination, I am of the view that the garden shed remaining on common property for an interim period, will not unreasonably restrict or interfere with owners and occupiers exercising their rights to use and enjoy the common property.

I also wish to point out to the Applicants that they should not make any further alterations to the common property without the approval of the Body Corporate. If it is ultimately determined that in the circumstances the Applicants should remove the garden shed, it is also likely that the Applicants will be ordered to restore the common property to its previous condition.

4.	Conclusion

For the reasons outlined above, while I intend to dismiss the majority of the interim orders sought by the Applicants, I do intend to make an interim order regarding the garden shed erected by the Owners of Lot 3 on the common property. I wish to emphasise to all parties that this decision is purely on the application for interim orders, and does not reflect on the final orders that may be made in relation to the application.

This matter will now be investigated an accordance with the Act, and the normal processes of this office, including allowing affected parties to make a written submission about the application. I anticipate that a final order will be made to the application in due course. All parties should be aware of section 225(2) of the Act, which provides that -

“An interim order -

a)	has effect for a period (not longer than 3 months) stated in the order; and
b)	may be extended, renewed or cancelled by the adjudicator until a final order is made; and
c)	may be cancelled by a later order made by the adjudicator; and
d)	if it does not lapse or is not cancelled earlier - lapses when a final order is made by the adjudicator.”

All parties should be aware of this section and its effect on this interim order. If the final order is delayed for some reason, the applicant may need to request a renewal of the interim order, before a final order is made. The onus of renewing an interim order rests with the applicant. This office will not automatically renew an interim order.2n