Strathpine Village Stage D [2003] QBCCMCmr 348 (24 January 2003)

Last Updated: 7 September 2007

C G YOUNGREFERENCE: 0011-2003

ORDER OF AN ADJUDICATOR

MADE UNDER PART 10 OF CHAPTER 6

BODY CORPORATE AND COMMUNITY MANAGEMENT ACT 1997

Number of Scheme:	20031
Name of Scheme:	Strathpine Village Stage D
Address of Scheme:	26-38 Mecklem Street STRATHPINE QLD 4500

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

Sidney Carford HILL, as a co-owner of Lot 44,



C G YOUNGI hereby order that the committee resolutions notified to owners dated 20 December 2002 approving the engagement of GHR Concrete Service for the purposes of concrete repairs, pressure cleaning, painting and sealing of various areas of common property, are invalid and of no effect.

I further order that, at the discretion of the body corporate, it may, on the authority of this order, have the matter properly re-determined by means of a "flying minute" voting paper to all owners rather than in general meeting. 2n
STATEMENT OF ADJUDICATOR’S REASONS FOR DECISION - REF 0011-2003

"Strathpine Village Stage D" CTS 20031

The applicant. Sidney Hill of Lot 44, has sought the following order of an adjudicator under the Body Corporate and Community Management Act 1997 ("the Act") –

"That the committee be restrained from carrying out the intent of the motions relatinf to the maintenance, repair of ropads and parking bays, date 20.12.2002. The project should be referred to the decision of all owners for resolution."

JURISDICTION:

This is a dispute between an owner (the applicant Sidney Hill of Lot 44) and the body corporate (the respondent) as to whether the body corporate committee at its meeting held on 17 October 2002 had power to resolve to have various maintenance works to the common property carparks and roadways. This is a matter that comes within the dispute resolution provisions of the legislation (see sections 182, 183 and 223 of the Act).

While 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 warranted because of the nature or urgency of the circumstances, there is nothing in the legislation to prevent an adjudicator, in appropriate circumstances, from making a final determination of the dispute by proceeding directly to a final order. I consider this course is appropriate in this instance because: the facts of the matter are relatively simple and clear; the appropriate parties have had the opportunity to be heard (see Application and Submissions following); sufficient information is available to determine the matter; and a prompt resolution of the dispute is in the interests of all parties. Accordingly, this order will be the only order made in respect of the application – the parties, of course, retain their appeal rights against the order made and my dispensing with the making of an interim order does not diminish those rights.

General powers of an adjudicator in making an order:
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) of the Act). An adjudicator’s order may contain ancillary or consequential provisions the adjudicator considers necessary or appropriate (section 230(1) of the Act).


APPLICATION AND SUBMISSIONS:

In accordance with section 194 of the Act, copies of the application were provided to the body corporate (committee) as the respondent in the dispute, as well as to the Body Corporate Manager, with an invitation to respond to the application. Submissions were received from the Chairperson Kevin Lowe on behalf of the committee (several committee members wrote adopting the submission) and ARBCM Pty Ltd, the Body Corporate Manager for the scheme.

The applicant gives a number of reasons in support of the order sought to have the proposed work halted and the project remitted to a general meeting for decision. His major grounds are that –

• the three separate works, namely concrete repairs, pressure cleaning of roadways, and the pressure cleaning, painting and sealing of the carparks, should be taken to constitute the one project, in which case the total cost exceeds the committee’s statutory expenditure limit.

• the cost was not provided for in the body corporate budget for 2002-03.

I will refer to the balance of the applicant’s grounds submitted under Determination following.

The body corporate considers the three areas of work to be distinct from each other and should not be considered as the one project – the fact that the one service provider has been selected for all three tasks (GHR Concrete Service) is a matter of convenience and economy, and not evidence of one project. It also states that the works are only coincidentally due at the same time.

The body corporate disagrees that provision has not been made in the budgets.


DETERMINATION:
The two major grounds given above represent the applicant’s Grounds (a), (b) and (c). At the outset, I wish to deal with the balance of the grounds put by the applicant.

Ground (d) merely refers to there being a deficit of $8,255 in the Administrative Fund as at the time of the committee meeting (17 October 2002). There is no explanation as to how this bears on the dispute. I can only surmise that the applicant is concerned as to the ability of the body corporate to fund the works. The simple answer is that a body corporate’s funds position can vary widely from one week to the next, depending on when contributions are levied and received, and payments are made – I understand that the low funds position was in consequence of the payment of the insurance premium early in the cycle. There is nothing of substance in this ground.

Ground (e) suggests that the absence of a signature(s) on the notice of committee resolutions sent to owners, renders the document as being "of doubtful validity". I agree that the document should have been authenticated by the signature against the date shown, and I feel this may have only been an oversight, however its validity could have been easily checked by a telephone call to the Body Corporate Manager or committee member. Like the above ground, this is of no substance.

Ground (f) merely records the applicant’s feelings that there are "dubious reasons" as to why the matter was handled so quickly by the committee rather than with consultation and proper financial planning. The applicant does not expand on this, though I presume he is again asking why the matter was not considered and resolved by a general meeting. Along with the comment above, these allegations of doubtful and dubious matters are subjective comments that bear no relationship to the dispute and should not have been included – they only serve to promote division and ill-will.

Having dealt with the above minor grounds, I will now consider the two grounds summarised earlier which I consider are of substance.

Firstly, concerning the single project argument. Without naming it, the relevant legislative provision the applicant is referring to here is section 103(2) of the Body Corporate and Community Management (Standard Module) Regulations 1997 ("Standard Module") which provides –

103 Spending by committee.

(2) For this section, if a series of proposals forms a single project, the cost of carrying out any 1 of the proposals is taken to be more than the relevant limit for committee spending if the cost of the project, as a whole, is more than the relevant limit.

The costs of the works, which must necessarily include the GST component to reflect the true cost to the body corporate for the purposes of the section, are as follows –

• $660 - concrete repairs.

• $6,600 - pressure cleaning, painting and sealing of carparks.

• $3,080 - pressure cleaning of roadways.

If the works do comprise one project, then the total cost of $10,340 exceeds the statutory expenditure limit of $9,500 (95 lots times $100 per lot) for the committee and therefore beyond jurisdiction.

The determination of whether a number of works comprise the one project is an area of difficulty, because in most instances, even where several tasks are being done at the same time by the same service provider, a reasonable argument can be run that different tasks should be considered separately. Here the works do involve the same provider carrying out three tasks at the same time, and additionally they all relate to the maintenance of the common property roadways and carparks either as repairs, pressure cleaning, painting and sealing. The tasks are both similar and connected. I can appreciate that the tasks do not always fall due at the same time (though the pressure cleaning probably should for uniformity of appearance), and there is a cost saving in having them done at the same time and by the same service provider.

However, it is my view that, on balance, the tasks should properly be regarded as the one project for the purposes of section 103 of the Standard Module. Accordingly, the committee acted beyond its jurisdiction in deciding these matters itself, and they should have been referred to the body corporate in general meeting for owners to decide.

Secondly, with regard to the second major ground concerning budgetting, even if the three tasks could be viewed as separate projects the committee would still need to refer the matter to general meeting because they are not funded.

Leaving aside for the moment whether the tasks should be categorised as being of an administrative or sinking fund nature, and dealing with the project in total, the body corporate states that it has $3,100 in the administrative fund budget and $3,480 in the sinking fund budget, a total of $6,580. That is far short of the $10,340 needed. As well, firstly, using all of the $3,100 leaves nothing for gardens and sundries, and secondly, the $3,480 is only the forecast amount for 2003-2004 and the actual current accumulation in the sinking fund for this purpose would only be $2,320 (2 years @ $1,160), leaving an overall shortfall of around half the project amount.

The committee says that there are some "excess funds" in the sinking fund – presumably these are funds not earmarked for any of the particular purposes set out in the forecast, though how such an excess arose is unknown – it really should be rectified by reducing next year’s contribution. There may even be a small unused amount available in the administrative fund (recognising that estimations, accumulations and budgeted amounts are not rarely exact), however I think it is an inescapable conclusion that a special contribution would need to be resolved and levied, a matter the committee cannot deal with. I’m not sure that this is a result envisaged by the applicant, or one that he will welcome, but he has put the matter in issue with the barest of grounds which has required me to consider all of the relevant issues as against the requirements of the legislation.

In summary, for the above reasons I have ordered that the committee’s resolutions are invalid.

However, given the time lapse since the decisions were made and the likely work and arrangements that have been made concerning the project, I have also specifically provided in my order that if the committee wishes the matter to proceed promptly, then in lieu of the time and cost involved in calling a general meeting for the purpose, it may obtain a decision from owners by a "flying minute". The committee may circulate appropriate motions to owners by a voting paper, with the project work to be determined as an ordinary resolution. This means is not otherwise available under the legislation, but can be used by the body corporate in this instance by the authority of the order.