Riverside Noosa [2002] QBCCMCmr 50 (31 January 2002)

C G YOUNGREFERENCE: 0588-2001

ORDER OF AN ADJUDICATOR

MADE UNDER PART 10 OF CHAPTER 6

BODY CORPORATE AND COMMUNITY MANAGEMENT ACT 1997

Number of Scheme:	26987
Name of Scheme:	Riverside Noosa
Address of Scheme:	235 Gympie Terrace NOOSAVILLE QLD 4567

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

Samuel DI ROSA, as a co-owner of Lot 3,



C G YOUNGI hereby order that the application for an order that owners of commercial lots (Lots 1 to 4) not be required to contribute to the maintenance of the common property swimming pool, is dismissed. 2n
STATEMENT OF ADJUDICATOR’S REASONS FOR DECISION - REF 0588-2001

“Riverside Noosa” CTS 26987

This is the final order to an application by Samuel Di Rosa of Lot 3 who has sought the following order of an adjudicator under the Body Corporate and Community Management Act 1997 (“the Act”), quote -

1. “That the annual general meeting of 23^rd Aug 2001 was unconstitutional as it consisted of only one Lot owner present and that another General Meeting needs to be called.

2. That exclusive use areas/costs (eg that of pool maintenance) of Lots 5 – 12 (residential) are being partly paid by non-users (ie Lots 1 – 4 Commercial Lots) and that this needs to be rectified prior to Budget 2001 is approved via a general meeting.”

The applicant also sought an interim order to halt the levying of contributions purported to have been approved at the general meeting of 25 August 2001, and on 5 December 2001 the following Interim Order 588-2001 was issued –

“I hereby order that the annual general meeting held on 23 August 2001 is invalid and all resolutions purported to have been passed at the meeting are invalid and of no effect, except to the extent that moneys already received from owners in payment of administrative fund and sinking fund contributions levied in accordance with the budgets purported to have been passed, may be retained in the relevant funds until the budgets and contributions are properly resolved by valid general meeting.

I further order that within two (2) months of the date of this order, the body corporate is to call and hold a general meeting, to be deemed to be the annual general meeting, at which all of the motions and the committee nominations purported to have been dealt with at the invalid meeting are to be the motions and nominations to be determined at the meeting ordered to be held, and any other motions that are properly before the meeting may also be determined.

I further order that the body corporate secretary must forward a copy of this interim order and the accompanying reasons to all owners with the “Notice Inviting Submission to an Application Lodged with the Commissioner” relating to this application.”

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)).

The core dispute of the applicant was that owners of commercial lots (Lots 1 to 4) should not have to contribute to the maintenance of the swimming pool when it was for the exclusive use of the residential owners (Lots 5 to 12). In my “Statement of Adjudicator’s Reasons for Decision” to the interim order, I commented on the oddness of the maintenance provisions of By-Law 43 which provided this. I also commented on By-law 44 being equally odd in its maintenance provision, and made general comments on the terms in By-laws 45 and 46. I will repeat that part of my reasons that dealt with these by-laws –

“In putting the same budget, I am conscious that this does not meet the order sought by the applicant, namely that the budgets should be altered to take into account changes in the by-laws which will alter the responsibilities, and therefore the expenditure, of the body corporate. In particular, the applicant is seeking an amendment to By-law 43, transferring the maintenance responsibility for the pool from the body corporate to the owners of Lots 5 to 12 (the residential owners), which would then take the maintenance costs out of the budget and change the contributions to be levied on owners.

I have not allowed for this possibility for two reasons, (1) the change of a by-law is not the simple matter that the applicant considers it to be, and (2) if a change does occur, whether by final order to this application or by a resolution in general meeting and subsequent change in the scheme’s community management statement, then it be some weeks, even months, away and the administrative budget/contributions can be adjusted from that date to reflect the relevant changes. Accordingly, in the meantime, assuming the budget is passed at the ordered meeting, the contributions will continue until, and if, there is any change.

I have gone to some length to explain the situation because I have searched the recorded by-laws and the registered plan for the scheme, and must say that I find the by-laws, particularly the exclusive use by-laws, to be a strange mix. Apart from the odd maintenance responsibilities imposed under By-law 43, the imposition of maintenance responsibilities on the body corporate for the exclusive use car spaces of the commercial owners of Lots 1 to 4 under By-law 44, is just as odd. There are also differences in the responsibilities under other by-laws (eg By-law 42 - “keep the area in a clean and tidy condition”) that raise questions, while other by-laws contain uncertain terms that should be resolved (eg By-laws 45 and 46).

These are matters that need to carefully considered so that the rights of owners are balanced against any proposed changes to the by-laws on the basis of the changes being “fair and equitable.”

I propose to invite all owners to make a submission to the application. I do not intend to impose on owners changes to the by-laws that go beyond the scope of this application, however it seems to me, from my preliminary reading of the by-laws, that they likely encompass inequities that will, in my experience, cause early problems in what is a relatively new scheme. To assist in this, I have required that the body corporate secretary send a copy of this order and these reasons with the office Notice Inviting Submission relative to this application. Owners will then better understand the matters in issue.”

I have highlighted the last paragraph of this extract. It refers to my intention to have a copy of the application and my Order and Reasons to be sent to all owners, residential and commercial, with an invitation to make a submission to the application in light of my comments.

I did not receive one submission.

The Body Corporate Manager has confirmed that the copies were forwarded to all owners as instructed. It appears that owners are not concerned over the seeming inequities and uncertainties of the by-laws I mentioned, and show the same apathy in responding to an opportunity to review them as they do in attending body corporate meetings.

An adjudicator does not have the power to alter or revoke a by-law which grants rights of exclusive use over common property to an owner. This is expressly prohibited by section 223(3)(i) of the Act which empowers an adjudicator to revoke a by-law that is oppressive or unreasonable other than an exclusive use by-law. Accordingly, I cannot alter the maintenance provisions of By-law 43 and, as the body corporate is obliged to cast its budget to take account of any maintenance responsibilities specified in its by-laws, the order sought by the applicant for commercial owners not to have to contribute to the swimming pool upkeep, cannot be made. My order is therefore to dismiss the application in this respect.

However, what owners could accomplish for themselves is a discussion on whether they wish the by-laws to change, and in what way, and to put (either immediately or after a “test the waters” motion) a new community management statement incorporating the changed by-laws. Had owners made submissions and given their views on the matter, I would have been in a position to provide some guidance on possible changes. However, the opportunity and task now lies with the owners themselves - as I have said, some of the by-laws are inequitable, and it would be in the interest of owners generally for them to be appropriately altered.