La Sabbia [2002] QBCCMCmr 591 (25 September 2002)

RA MeekREFERENCE: 0371-2002

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:	76 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

RA MeekI hereby order that –

• That within six (6) weeks of the date of this order the body corporate shall post to the owner of lot 32, Monian (QLD) Pty Ltd, at its address for service nominated in the body corporate roll, a cheque for the amount of $1025, being reimbursement for the cost of purchase and installation of two storage sheds installed by the owner on the common property car parking area;

• That within six (6) weeks of the date of this order, the owner of lot 32, Monian (QLD) Pty Ltd shall remove all items currently stored in the storage sheds the subject of this order, and arrange for delivery of the key or keys for the sheds to the building manager;

• Provided it has otherwise complied with the terms of this order, the body corporate is authorised after six (6) weeks from the date of this order (or such earlier date as the key or keys to the storage sheds are delivered to the building manager) to take possession of the storage sheds the subject of this order, and to dismantle and remove the storage sheds from the common property car park.

STATEMENT OF ADJUDICATOR’S REASONS FOR DECISION - REF 0371-2002

“La Sabbia” CTS 24687

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

1. That the adjudicator make a declaratory order that the resolution passed on 15 November 2001 at the AGM of the body corporate, is a valid resolution of the body corporate.

2. That the adjudicator direct that the owner of lot 32 dismantle and remove the storage shed as installed on common property by such owner, from the common property, within 7 days of such order.

Section 223(1) 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)).

I do not intend to restate the applicant’s grounds, nor the submission in reply by the owner of lot 32, Monian (QLD) Pty Ltd (Monian) in any detail. I consider that these are known to the other party by way of both the submission and the reply process. Briefly though, the facts are essentially as follows

• The body corporate committee erred in allowing the resident manager to authorise the placement of storage sheds on common property;

• The committee later obtained legal advice that the same required a special resolution;

• The committee submitted two motions to a recent general meeting, one of which resolved to the effect that owners who had installed storage sheds “in the garage, but not within exclusive use car space areas” immediately remove those storage sheds;

• All but one lot owner (Monian) has apparently complied with this resolution;

• The body corporate have now applied for an order that Monian dismantle and remove the storage shed installed;

• Monian has responded that it be entitled to retain the storage shed installed, or alternatively, that it be compensated for the purchase of and removal of the sheds, as well as for the storage of items removed from the sheds;

• The body corporate has replied that it has acted in good faith, and that all other lot owners affected by the resolution, have complied with it;

• Moreover, the body corporate denies that a basis for compensation exists under section 227(1)(b).

Determination.

Whilst it has not been argued to me, I suggest that the circumstances of this application might give rise to an estoppel under which the body corporate is now denied from requiring the removal of the storage shed. However, as I noted, the issue of estoppel was not argued in the application by either party, except perhaps in an unidentified general way. Secondly, my jurisdiction is to make orders which I consider are just and equitable for the resolution of the dispute. Arguably this would allow me to override an estoppel in any event.

I note that all lot owners affected by the resolution carried by the body corporate have now complied with the terms of that resolution, excepting Monian. I suggest that the body corporate has been fortunate with the extent of compliance, given the circumstances.

I am prepared to order Monian to remove the storage shed, but only on the basis that the body corporate pay reasonable compensation for this. On the question of compensation, I do not accept the body corporate’s defence that it acted in good faith, and that all other owners have complied with the resolution without claiming compensation. On the first point, the fact is the body corporate led Monian to believe that it was authorised to erect the storage shed. On the basis of this belief, Monian acted to its detriment in expending funds for the erection of the storage sheds. On the second point, I consider it irrelevant that all other owners have complied. I further consider that the body corporate has been fortunate in this eventuality. I conclude that Monian is entitled to reasonable compensation.

However this entitlement to compensation does not arise under section 227, which provides for the payment of compensation in the event of damage to property. In the circumstances of this application, no damage to property has occurred. The basis of compensation in this instance is my entitlement to make orders which I consider to be just and equitable for the resolution of the dispute. I conclude that it is just and equitable that Monian receive reasonable compensation for being required to remove its storage sheds. I consider reimbursement of the cost of purchase and installation of the storage sheds ($1025) is reasonable compensation. I consider additional compensation for the storage of items removed from the sheds is unreasonable. An owner is responsible for the storage of their possessions, and in my view, even the current circumstances do not warrant a departure from this.

In the circumstances, I intend to order as follows –

• That within six (6) weeks of the date of this order the body corporate shall post to the owner of lot 32, Monian (QLD) Pty Ltd, at its address for service nominated in the body corporate roll, a cheque for the amount of $1025, being reimbursement for the cost of purchase and installation of two storage sheds installed by the owner on the common property car parking area;

• That within six (6) weeks of the date of this order, the owner of lot 32, Monian (QLD) Pty Ltd shall remove all items currently stored in the storage sheds the subject of this order, and arrange for delivery of the key or keys for the sheds to the building manager;

• Provided it has otherwise complied with the terms of this order, the body corporate is authorised after six (6) weeks from the date of this order (or such earlier date as the key or keys to the storage sheds are delivered to the building manager) to take possession of the storage sheds the subject of this order, and to dismantle and remove the storage sheds from the common property car park.

Upon payment by the body corporate of the amount ordered to Monian, the body corporate will become the owner of the storage sheds, and subject to the terms of the orders made, shall be entitled to dismantle and remove them from the common property. The storage sheds will become an asset of the body corporate, which the body corporate will be at liberty to sell.

It will be noted that I have not dealt with the first order as sought by the applicant body corporate; namely that I make a declaratory order that the resolution passed on 15 November 2001 at the AGM of the body corporate, is a valid resolution of the body corporate.

Adjudicators of this office have established a principle regarding applications which seek to validate, rather than invalidate, either a meeting, or certain aspects of a meeting. The basis for this principle was set out in an order to a previous application (No. 0708 of 1998). That order provided in part as follows, quote -

In effect, the applicant seeks a declaration that the meeting has been validly convened. The resources of this office are not such that this office is able to undertake a complete investigation, particularly at an interim stage, of all aspects of the meeting, and declare it to have been validly convened, as the applicant seeks. If this office adopted the course of action sought of it by the applicant, then I consider that this would lead to multiple similar applications, which would be beyond the resources of this office.

Rather, I consider the onus is upon the applicant as the secretary having convened the meeting, to ensure that requirements of the Act and Standard Module were complied with, and provided the applicant has done this, then the meeting will presumably withstand any challenge directed at its validity by others. I consider that it is in this latter scenario that this office should involve itself. That is, if there is a challenge to the validity of the meeting after it having been convened or held, then this office should investigate such challenge, and make such orders as considered appropriate. ...

I acknowledge that the current application seeks only to validate one motion carried at a meeting, and not the meeting per se. Nevertheless, I consider the principle to be equally applicable. If this office were to investigate meetings with the view to declaring them to be procedurally valid, then this approach would invite many applications seeking this declaration, particularly where there are ongoing levels of disputation within schemes (of which there are many).

Investigating such applications would in itself be problematic in that there would be no clear focus of the particular investigation. By necessity, it would need to consider each and every aspect of the procedure for convening and holding the meeting, before any declaration as to the validity of the meeting could be given. In contrast, where an application seeks to invalidate a meeting, then the basis of invalidation is (usually) stated, and it is this particular basis on which the investigation focuses.

To adopt the approach of investigating the validity of meetings, rather than allegations of their invalidity, would exhaust the resources of this office, due both to the number of such applications which might be made, and further, the necessary breadth of such investigations.



If any owner considers the meeting, or any aspect of it, to be invalid or not in compliance with the legislation, they are entitled, subject to the time limits set out in section 193 of the Act, to make application to this office seeking invalidation, either of the meeting or the particular aspect. Until such time as an application is made, and there is an order in respect of that application, I consider a body corporate is entitled to proceed on the assumption that the meeting, or aspect, is valid. If it were otherwise, then bodies corporate would not be able to operate effectively.

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