Panorama Tower [2002] QBCCMCmr 68 (11 February 2002)

RA MeekREFERENCE: 0555-2001

ORDER OF AN ADJUDICATOR

MADE UNDER PART 10 OF CHAPTER 6

BODY CORPORATE AND COMMUNITY MANAGEMENT ACT 1997

Number of Scheme:	14765
Name of Scheme:	Panorama Tower
Address of Scheme:	30 Watson Esplanade SURFERS PARADISE QLD 4217

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

Barry Thomas Smith & Janice Isabel Smith, the owners of lot 58, and others


RA MeekRA MeekI hereby order that the application by Barry Thomas Smith and Janice Isobel Smith, the owners of lot 58, and others, seeking an order giving effect to motion 2 headed Accept offer of a Seabed Lease from Department of Natural Resources on the condition that there is no cost to other unit owners or the body corporate considered at the general meeting of the body corporate held on 2 June 2001, but not carried, due to the dissenting vote of two owners, is approved.

I further order that the dissenting votes of the owners of lot 9, Rod and Marnie Woodham, and lot 37, Hercules Lemonis, are overturned.

I further order that the body corporate is hereby authorised to implement or give effect to the terms of motion 2, as if it had been carried by resolution without dissent, in particular by the body corporate accepting the offer from the Department of Natural Resources of a Seabed Lease.


STATEMENT OF ADJUDICATOR’S REASONS FOR DECISION - REF 0555-2001

“Panorama Tower” CTS 14765

The applicants, Barry Thomas Smith & Janice Isabel Smith, the owners of lot 58, have sought the following order of an adjudicator under the Body Corporate and Community Management Act 1997 (the Act), quote -

An order giving effect to the Motion No. 2 to accept offer of a Seabed Lease from the Department of Natural Resources on the condition that there is no cost to other unit owners or the Body Corporate, considered by General Meeting of the Body Corporate ... held on Friday 22 June 2001, requiring a resolution without dissent that was not passed because of opposition being 2 dissenting votes that in the circumstances is unreasonable, in accordance with section 223(3)(u) of the Body Corporate and Community Management Act 1997.

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)).

The applicants are the owners of a lot who, together with other owners who choose to sub-lease a berth, will benefit if the body corporate is able to enter Seabed Lease with the State. It is only the body corporate, as the adjoining owner, who can be the holder of the lease (per letter from Department of Natural Resources (DNR) of 12 January 2000 to the body corporate chairperson).

The body corporate has power to acquire a leasehold interest in freehold or non-freehold land for the use and enjoyment of the owners or occupiers of lots included in the scheme (see section 116(2) of the standard module). Where the lease is for more than three years, a resolution without dissent is required (section 116(3)).

On Friday 22 June 2001, the body corporate held an EGM to consider a motion to accept an offer of a Seabed Lease from DNR. That motion was defeated because of the dissenting vote of two owners. Of the 58 lots in the scheme, there were 40 votes in favour of the motion, and 2 abstentions, as well as the two dissenting votes. The two dissenting voters were the owners of lot 9, Rod and Marnie Woodham, and lot 37, Hercules Lemonis.

The applicants have now sought an order of an adjudicator overturning the two dissenting votes, and deeming the motion to have been carried. Section 223(3)(u) of the Act provides that an adjudicator, if satisfied that a motion considered by a general meeting requiring a resolution without dissent was not passed because of opposition that in the circumstances is unreasonable, may make an order giving effect to the motion as proposed, or a variation of the motion as proposed.

Notice inviting submission in respect of the application was sought from the body corporate committee, and the two dissenting owners. The body corporate committee have made a submission in which they “have unanimously voted to support the application lodged by B&J Smith”. The submission further states that the committee considers “the retention of an existing facility a benefit to lifestyle and that the value of land and properties would be enhanced at no cost to unit owners who do not hold a marina berth lease”.

Only one of the two dissenting owners have responded to the notice inviting submissions. No response has been received from Mr Lemonis. I have noted the details in the application regarding the alleged basis for Mr Lemonis’ dissenting vote; namely that the acquisition of the Seabed lease by the body corporate would result in an increase in valuation of the parcel and therefore an increase in rates for individual lots.

DNR advice on this aspect states in part that “it would be reasonable, and possibly illegal to do otherwise, to issue separate valuations for the land and seabed ...”. The advice from DNR on this aspect appears to be saying that there would be a rates notice issuing to the body corporate in respect of the Seabed Lease, but that the value of the Seabed Lease would not impact on individual lot valuations. I am satisfied with this explanation.

The owners of lot 9, Roderick and Marnie Woodham have responded to the notice inviting submissions.

They state that the matter in dispute is beyond the authority of the committee. No aspect of the dispute was subject to the authority or approval of the committee. I am therefore not able to ascertain what the Woodham’s intend by this statement.

They next state that “no tenure exists over the existing structures and their existence is unauthorised”. This statement appears to be taken from the terms of a letter from DNR to the Secretary / Treasurer of 16 May 2001. The intent of the statement in the context of the letter was that if the offer of the Seabed Lease was not taken up, then the existing berthing facility would be unauthorised as no tenure would exist over these structures. Woodham’s reference to this aspect is out of context. The statement made by DNR does not prevent the acceptance of the offer of the Seabed Lease. Rather it merely indicates the position if the offer of the lease is not taken up.

The Woodhams next state that “items 1, 2 and 3 in the application have no bearing on the issue”. To my mind, paragraphs 1, 2 and 3 of the applicant’s grounds have a relevance based on historical context. I note that certain owners did formerly enjoy berthing or mooring rights which were subsequently lost to them.

The Woodhams next state that submissions in respect of the application should have been sought from all owners and not simply the two dissenting owners, and the body corporate committee. They state “this is unreasonable and unfair for all owners are entitled to be informed of issues that may affect them”. I consider that all owners have been informed via the process of the general meeting to consider whether the body corporate should accept the Seabed Lease. 40 of the 58 owners (69%) voted in favour of the proposal, and a further 16 (27%) failed to record a vote either for or against the proposal. This left only 2 of 58 owners (3%) who indicated opposition to the proposal. In the circumstances, I consider the decision not to seek submissions from all owners was justified.

The Woodhams next refer to “grave concern about the mooring abutting “Panorama Tower” is shown in a letter ... to (the manager)”. This letter was from the Woodhams to the manager. In the letter, dated 4 July 2000, Rod Woodham states in part –

I believe it imperative for the committee to notify the owners of the moorings of the need to have their mooring structures removed forthwith and alerting them to the liability they may have to other proprietors and their guests, visitors etc and drawing their attention to the risks to the public at large.

It seems reasonably clear to me that the Woodhams, for whatever reason, are simply opposed to the mooring or berthing facilities adjacent to the scheme, and have advocated their removal. Next the Woodhams call for “absolute clarity on all issues for all unit owners”. Mr Woodham had previously listed 10 items on which he sought the relevant “clarity”.

I am satisfied that the Woodham’s dissenting vote to the motion was based on factors which I consider to be unreasonable. I conclude that the Woodhams are simply opposed, for reasons not explained, to the body corporate being involved in the acceptance of the Seabed Lease. The Woodham’s, in the letter of 4 July 2000, expressed a preference for the removal of the berthing or mooring facilities.

The view of the Woodhams to the body corporate involvement with the Seabed Lease might have some reasonable basis if there was an alternative to the body corporate holding the lease, but there is not. As noted from correspondence I have previously referred to, DNR “would not consider tenure to individual unit holders or a company representing a small number of unit owners”. DNR will only issue the lease to the body corporate as the adjoining owner. Given this circumstance, then it is reasonable in my view that the body corporate be authorised to accept the offer of the Seabed Lease on behalf of owners, on the understanding that the owners who elect to take a sublease of a berth from the body corporate will indemnify the body corporate in respect of all costs associated with the Seabed Lease.

I equate the body corporate entering into the Seabed Lease with an agreement to supply services under section 119 of the Standard Module. The body corporate, as holder of the Seabed Lease, is the supplier of a service (namely berthing or mooring facilities). In supplying that service, what the body corporate must do is recover all costs associated with supplying that service from those owners who agree to be supplied with the service, namely those who agree to take a sub-lease of berthing or mooring facilities. I recommend that the body corporate enter into written agreements with all such owners to record the basis on which it agrees to supply the berthing or mooring facility.


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