Waimana Gardens [2003] QBCCMCmr 169 (15 October 2003)

Last Updated: 17 May 2005

REFERENCE: 0490-2003

ORDER OF AN ADJUDICATOR

MADE UNDER PART 9 OF CHAPTER 6

BODY CORPORATE AND COMMUNITY MANAGEMENT ACT 1997

Number of Scheme:	12195
Name of Scheme:	Waimana Gardens
Address of Scheme:	18 Tomewin Street, CURRUMBIN QLD 4223

TAKE NOTICE that pursuant to an application made under the abovementioned Act by Joan Marion BEVAN, as the owner of Lot 6,

I hereby order that the application for the following order – To stop the building being cement rendered. I wish to seek an order overturning the decision by the Body Corporate, is dismissed as the matter in dispute has been resolved by Order 485-2003 issued on even date in determination of another application I further order that where any owner’s vote at the annual general meeting held on 22 August 2003 was disallowed under section 11(5) of the Body Corporate and Community Management (Standard Module) Regulation 1997 on the grounds that they had not paid any contribution (including any penalty for non-payment) for the rendering and painting of the scheme building, then the body corporate secretary must determine whether the vote of such persons could (whether by voting for or against a motion) alter the declaration of the vote, and if so, then any such motion declared as passed is by this order void, and any such motion that was declared lost but may otherwise have passed shall be included in the agenda for decision at the next general meeting, and the minutes must be altered to reflect these changes which must be promptly notified to owners.

STATEMENT OF ADJUDICATOR’S REASONS FOR DECISION - REF 0490-2003

"Waimana Gardens" CTS 12195

The applicant, Joan Bevan of Lot 6, has sought the following order of an adjudicator under the Body Corporate and Community Management Act 1997 ("the Act") -

"To stop the building being cement rendered. I wish to seek an order overturning the decision by the Body Corporate."

JURISDICTION:
This is a dispute between an owner (the applicant Bevan) and the body corporate (the respondent), concerning a purported resolution of the body corporate in general meeting to render and paint the scheme building, accumulating the funds over 7 years in the amount of $7,015.80 a year. This is a matter falling within the disputes resolution provisions of the legislation (see sections 227, 228, 276 and Schedule 5 of the Act).

General powers of an Adjudicator in making an order:
Section 276(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 contractual matter about –
(i)	the engagement of a person as a body corporate manager or service contractor for a community titles scheme; or
(ii)	the authorisation of a person as a letting agent for a community titles scheme.

An order may require a person to act, or prohibit a person from acting, in a way stated in the order (section 276(2) of the Act). An adjudicator’s order may contain ancillary or consequential provisions the adjudicator considers necessary or appropriate (section 284(1) of the Act).


APPLICATION AND SUBMISSIONS:
Under section 243 of the Act, a copy of the application was provided to the respondent body corporate (committee) and all other owners, with an invitation to each to respond to the matter of dispute raised in the application. The committee made no submission in the matter, and only one owner, Greg and Carole Carter of both Lots 2 and 7, made a submission, opposing the application.

This is one of two applications concerning the proposed rendering of the scheme building, the other being Application Ref. 485-2003 lodged by Julia Gill and Marguerite Buckley of Lot 9. My decision in that other application, Order 485-2003 of even date, also determines this application in consequence of my finding the relevant meeting at which the proposal was purported to have been resolved is void.

The brief facts of the matters as set out in my Reasons to Order 485-2003, which equally apply here, are as follows –

In order to better understand the facts relating to the dispute and the position of the parties, on 13 October 2003 I conducted a teleconference with Marguerite Buckley representing the applicants, and M Purtell of STM representing the body corporate.

The brief facts of the matters are that at an extraordinary general meeting held on 16 April 2003, a motion for the rendering and painting of the scheme building was passed on a vote of 6 votes in favour and 2 votes against. The motion is for a tender by Riley Shelley Qld Pty Ltd for the work at a cost of $7,015.80 a year for 7 years, be accepted.

The applicants state that when they enquired of STM (Purtell) as to the cost for their jointly owned lot and Lot 8 owned by Gill, they were informed that the cost would be around $700 pa for each lot for the 7 years. When they received the accounts, the contribution for their lot was $979.20 and $816 for Lot 8. As their vote in favour of the motion was based on the cost given them upon enquiry, they believe they were mislead and the resolution should be invalidated.

During the teleconference, STM (Purtell) stated that the chairperson (Carter) had negotiated the contract with Riley Shelley Qld Pty Ltd and there had been little input into the process by STM. In fact it was only recently that STM became aware there was an escalation clause in the contract which increased the yearly contribution. It also appears that it is intended that the work is to be carried out not at the end of the 7 years but relatively soon, with the body corporate paying off the balance over the remainder of the 7 years. It appears then that the service provider is either financing the work itself or arranging it through a finance provider. The truth of the matter as regards the contract terms and the financing arrangement is irrelevant for my determination of this matter otherwise I would have made further enquiry of the parties and requested the relevant documents.

In answer to my query, STM did not have the meeting documentation readily available to establish whether the voting paper showed that the motion was being put as a special resolution. For reasons that will become apparent, I did not require they should later provide the answer.

The main, if not sole, ground relied on by the applicant is that she "is a pensioner with no means of income and nothing in the bank. My only way to pay this is to sell my unit and look for other accommodation."


DETERMINATION:
"Waimana Gardens" was registered as a building unit plan (now termed a building format plan) in 1978, and comprises 9 lots. The scheme is regulated by the Body Corporate and Community Management (Standard Module) Regulation 1997 ("the Standard Module").

In my "Statement of Adjudicator’s Reasons for Decision" to Order 485-2003, I set out comprehensive reasons for my order which invalidates the resolution for the rendering of the scheme building, purported to have been passed at the extraordinary general meeting of 16 February 2003. That order effectively achieves the outcome sought by the applicant (Bevan) here, but for the different reasons given for that order. As I have ordered the secretary to give a copy of my Order 485-2003 to all owners, she will be able to read the reasons for herself.

However, even though this application is redundant as regards the rendering resolution, I need to address the grounds relied on by the applicant.

The legislation makes no specific provision in recognition of an owner being unable to afford to meet their share of the cost of a properly approved work, purchase of an asset, or service. What the legislation does do is to have a tier of resolutions ranging from an ordinary resolution (requiring a simple majority of voters) to a resolution without dissent (which fails with one dissenting vote), and matching a decision with the appropriate type of resolution. For instance, an ordinary resolution is only necessary where the body corporate wants to pass its annual budget, whereas a resolution without dissent is required to give an owner the exclusive use of part of the common property.

If the body corporate passes the required resolution, then owners are required to pay their share of the cost of the decision. The applicant’s plea that she does not have the available funds to pay her share is not a valid reason not to pay. She would have to arrange a loan, mortgage some property or perhaps sell some property, in order to avoid the body corporate seeking payment through the court. Of course she can make a personal appeal to other owners not to pass such a resolution on account of her financial position, but she has no legal ground to refuse or avoid paying a properly passed resolution.

In any case, in this instance she will not have to pay the contribution levied against her, and also the penalty interest of $61.64 levied against her will be removed.

The only other matter that needs attention is information by the applicant that she was refused a vote at the annual general meeting held on 22 August 2003 because of her failure to pay her contribution towards the rendering proposal. As Order 485-2003 has shown that resolution to be at all times void, then the demand by the body corporate for contributions was based on a void resolution and was therefore invalid. Accordingly, neither the applicant nor any other owner could be refused a vote under section 11(5) of the Standard Module on the ground that she had not paid this contribution.

This finding creates a problem with motions that were declared at the meeting as having, (a) passed but which might otherwise have failed on the vote of the applicant and perhaps others improperly denied a vote, or (b) failed to pass but which might otherwise have passed on the vote of those improperly denied a vote. I have made provision for these events by ordering a re-determination of resolutions based on the possibility that the precluded votes could have made a difference whether cast one way or the other. That should be done promptly by the secretary, and if a change in a declaration of the vote on a motion could have otherwise occurred, then revised minutes incorporating any such change will have to be notified to owners, preferably by a distribution of amended minutes. That is, some motions declared passed may now have to be declared lost, and some that failed may have to be reconsidered at the next general meeting.

The alternative to the above order would have been to completely invalidate the annual general meeting. However, that could have had a far reaching effect on the operation of the body corporate as it would invalidate both the sinking fund and administrative fund budgets, amongst other things. That might still be the case, however I have made an order that will narrow the consequential effect of the body corporate’s error as far as is possible.

Because this order may affect every owner, I have also ordered that a copy be provided by the secretary to each owner for their information.