Coronation Towers [2003] QBCCMCmr 61 (11 August 2003)

Last Updated: 17 May 2005

REFERENCE: 0291-2003A

INTERIM ORDER OF AN ADJUDICATOR

MADE UNDER PART 9 OF CHAPTER 6

BODY CORPORATE AND COMMUNITY MANAGEMENT ACT 1997

Number of Scheme:	10948
Name of Scheme:	Coronation Towers
Address of Scheme:	24 Dunmore Terrace AUCHENFLOWER QLD 4066

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

Ronee Gay STEVENS, as the owner of Lot 76,

I hereby order that, pursuant to the powers given me by section 279(2)(b) of the Act, Interim Order 291-2003 dated 13 May 2003 which restricts the body corporate from implementing or otherwise dealing with the resolutions now passed in respect of Motions 2 to 5 at the extraordinary general meeting held on 14 May 2003, is cancelled. I further order that the application to the extent it has sought the following orders of an adjudicator – 1. That the E.G.M. scheduled for 14th May 2003 be deferred until the Body Corporate has obtained an independent report in terms of Motion 12 of the A.G.M. of 18/12/02. 2. That the voting paper for the E.G.M. scheduled for 14th May 2003 is flawed, in that: (a) Motion 3 should precede Motion 2, as Motion 4 of the E.G.M. of 30/9/02 approving piping on balconies only, has been deferred. (b) That Motion 2 should be divided into 2 separate motions, ie: (i) To approve the airconditioning policy. (ii) To approve applications for installations by individual proprietors. 3. That at the E.G.M. following the furnishing of an independent report covering all nominated criteria, a motion to provide for the cost of upgrading of the electrical mains is to be included, is dismissed.

STATEMENT OF ADJUDICATOR’S REASONS FOR DECISION - REF 0291-2003A

"Coronation Towers" CTS 10948

This is the second interim order issued in respect of an application by Ronee Stevens of Lot 76, who has sought the following interim order of an adjudicator under the Body Corporate and Community Management Act 1997 ("the Act") -

1. "That the E.G.M. scheduled for 14^th May 2003 be deferred until the Body Corporate has obtained an independent report in terms of Motion 12 of the A.G.M. of 18/12/02.

2. That the voting paper for the E.G.M. scheduled for 14^th May 2003 is flawed, in that:

a. Motion 3 should precede Motion 2, as Motion 4 of the E.G.M. of 30/9/02 approving piping on balconies only, has been deferred.
b. That Motion 2 should be divided into 2 separate motions, ie:
(i)To approve the airconditioning policy.
(ii)To approve applications for installations by individual proprietors.

3. That at the E.G.M. following the furnishing of an independent report covering all nominated criteria, a motion to provide for the cost of upgrading of the electrical mains is to be included.

4. That the Committee of the Body Corporate cease harassment and attempts to injure the standing and reputation in the community of the proprietor of lot 76.
In particular:

• That foyers of level 14 and 15 in Block B, being common property areas be cleaned on the same regular basis as has been since 1986, and as are the other foyers in this building complex (approved by previous Committee).
• Antenna wall plate, backing plate and cable. That the original installation be recognised as such, no further demands for payment be made, and, the decision by previous committee be reinstated.
• That the airconditioning for lot 76, approved by the Body Corporate, and installed in 1999, be admitted and no further challenges issued.
• That to allow the servicing of dripping roof garden tap, the water to the complex be turned off or a stopcock be installed as approved by previous Committee.
• Regarding bi-fold doors (approved by previous Committee) and exhaust fan louvres on private property roof garden, that no further demands for "certification" be made.
• That the true facts regarding these matters be recorded in the minutes and circulated to all proprietors."

The applicant has not specified any final orders in respect of the matters raised by her, however I will determine from the applicant’s grounds what matters can be appropriately dealt as such (see later under heading "Application and Submissions").

On 13 May 2003 I issued the following Interim Order 291-2003 –

I hereby order that the body corporate must not implement or otherwise act upon any resolutions passed in respect of Motions 2 to 5 (inclusive) to be voted on at the extraordinary general meeting to be held on 14 May 2003, including the granting of approval to owners of lots listed in Motion 2 for the installation of air conditioning units, pending determination of this application by final order.

JURISDICTION:
I have already considered the question of jurisdiction in my reasons to the interim order in the following terms –

This is a dispute between an owner (the applicant Stevens), and the body corporate (the respondent), concerning a number of matters relating to a general meeting, including; the order of motions, the splitting of a motion, the absence of a report previously decided upon, and the inclusion of a motion to upgrade the scheme’s electrical mains. The remaining order sought concerns the alleged harassment of the applicant, as evidenced by various actions of the body corporate listed out in support of that claim. These are matters that fall within the dispute resolution provisions of the legislation (see sections 227, 228 and 276 of the Act).

Section 279 of the Act provides that an adjudicator may make an interim order if satisfied, on reasonable grounds, that an interim order is necessary because of the nature or urgency of the circumstances to which the application relates. An adjudicator’s order may contain ancillary or consequential provisions the adjudicator considers necessary or appropriate (section 284 of the Act).

General powers of an Adjudicator in making an order:
Section 276(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 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:
For the purposes of determining the application for an interim order, in accordance with sections 243 and 247 of the Act a submission was sought and obtained from the respondent body corporate (committee) concerning the interim aspects of orders numbered 1, 2 and 3 as sought by the applicant which related to the then impending meeting of 14 May 2003.

A further submission was sought and obtained from the respondent in regard to the balance of the application, including order number 4 sought by the applicant which has no urgency attaching to it and is properly a matter for determination by final order. This last order sought has not been determined by this order but will be determined shortly. The applicant Stevens viewed the submission of the committee, and a subsequent submission made through its lawyers, and subsequently lodged written replies on 30 June and 12 July 2003 (see sections 246 and 244 of the Act respectively). I might add that, despite an initial request from the body corporate for submissions to be sought from all owners which was later withdrawn, a number of owners nevertheless made submissions. I regret the delay in making this order after undertaking to be as prompt as possible, but the confusion in submissions and the rights of the applicant to natural justice, and the delays in making orders because of increases in the number of applications lodged and resource problems, have all contributed. Owners may appreciate, however, that I have addressed the air conditioning issue by a second interim order and left the remaining disputed matter for final order – the normal delay period for orders is currently around 6 months.

I have already presented brief facts of the matter in my reasons to the interim order in the following terms (which must now be read accommodating subsequent events) –

At an extraordinary general meeting held on 30 September 2002, the body corporate considered several motions relevant to the installation of air conditioners, in particular as to the most appropriate location of compressors. A motion for compressors to be sited on sun hoods was lost, and a further motion that they be sited on balconies was passed. At the annual general meeting held on 18 December 2002, motions were passed to both defer implementation of the latter resolution and to commission an independent report on all aspects of air conditioning installations. The body corporate has since obtained a report from Tod Consulting Engineers Pty Ltd and has based its motions for the impending meeting on the recommendations in that report. The applicant does not consider the report to be independent because of the involvement of Tod Consulting Engineers Pty Ltd in previous scheme projects over a number of years, and possible personal relationships. The committee rejects this view.

The facts in relation to the second order sought by the applicant are sufficiently evident from the wording of the applicant.

In regard to the third order sought, the applicant is asking that a further motion be included in the agenda relating to an electrical upgrade. Such an order would only be granted in extremely urgent circumstances, as owners themselves, either by motion of the committee or by a requisition notice of sufficient owners served on the committee, can bring the matter on for determination. The basis of the applicant’s objection is that the question of power adequacy needs to be addressed before approvals for air conditioner installations are given. In its report of 28 October 2002, Ashburner Francis, consulting engineers, has given an opinion that the current installation applications by owners can be presently accommodated, though there is a need to monitor loading because of the increasing level of power use for various purposes including air conditioning.

I have already said that the fourth order sought does not relate to matters of an urgent nature, and therefore the facts are not relevant here.

DETERMINATION:
In these reasons I shall be dealing exclusively with the first three orders sought by the applicant which relate to the installation of air conditioners by owners.

The core of the dispute concerning the air conditioning of lots lies with a series of motions put to owners at three meetings. I propose to deal only briefly with these as the motions and outcomes will be known to owners and well known to those interested owners who have had their approval by the body corporate stayed by the earlier interim order.

At an extraordinary general meeting held on 30 September 2002, Motions 2 to 5 concerned air conditioning in the following way: Motion 2 sought, largely, that compressors for split-system air conditioning units ("units") be allowed to be installed on the sun hoods; Motion 3 was to allow drainpipes (to carry unit condensation) to be installed to cater for sunhood mounted units; Motion 4 sought approval for drainpipes to be installed for units already approved for installation on balconies; and Motion 5 sought approval for the body corporate to authorise unit piping to be installed through or on exterior walls.

Motion 2 was not passed; Motion 3 lapsed as a consequence of the failure of Motion 2; Motions 4 and 5 were carried. That is, sun hood installations were rejected in favour of the existing approval for balcony installation and facilitating such installation by installing drainpipes and allowing necessary interference with exterior (common property) walls.

At the annual general meeting held on 18 December 2002, two relevant motions were put, namely: Motion 11 for the deferment of Motions 4 and 5 (facilitating balcony installations) pending an objectively based report(s) from independent expert(s).; and Motion 12 was for the obtaining of such an independent report, considering all aspects of air conditioning, so as to formulate a standard body corporate policy for installations.

Both motions passed, effectively staying the approval for the installation of drainpipes and use the external wall in the installation of units on balconies, and requiring an expert review all aspects of installing air conditioning in the building.

At the extraordinary general meeting held on 14 May 2003 (held subsequent to the interim order), three relevant motions were considered: Motion 2 sought approval for the accompanying air conditioning policy statement which allowed (so far as is relevant here) for the installation of units on sun hoods as well as balconies (with certain common conditions) AND sought approval for the installation of units on 20 specified lots; Motion 3 was to revoke the resolution passed in respect of Motion 11 at the annual general meeting (see above); and Motion 4 was for the body corporate to install downpipes for units on balconies and sun hoods.

All three motions were passed. The effect of these resolutions was to: allow sun hoods (and other sites) as an alternative (compressor) unit installation site to balconies; approve the installation of air conditioners for certain lots; and allow for alternative drainpipes.

I will deal with the three orders sought by the applicant against the history and the outcomes of body corporate decisions concerning air conditioning. I shall deal first with the second order sought.


Order 2. "That the voting paper for the E.G.M. scheduled for 14^th May 2003 is flawed, in that:

a. Motion 3 should precede Motion 2, as Motion 4 of the E.G.M. of 30/9/02 approving piping on balconies only, has been deferred.
b. That Motion 2 should be divided into 2 separate motions, ie:
(i)To approve the airconditioning policy.
(ii)To approve applications for installations by individual proprietors."

At page 3 of my reasons to the interim order I said in reference to this order sought –

In regard to the sequence of motions, I cannot see that the alteration to that sequence put by the applicant is necessary. Also, the fact that Motion 2 has two limbs means that the proposer (the committee) regards the two matters to be interdependent – if owners have a preference for one and not the other, then they should vote against the motion.

Those comments still represent my view and, in any case, the points raised by the applicant concerned form rather than substance. With the actually voting on both Motions 2 and 3 now known, any remaining relevance disappears completely. Accordingly I do not intend to deal further with this order sought.


Order 1. "That the E.G.M. scheduled for 14^th May 2003 be deferred until the Body Corporate has obtained an independent report in terms of Motion 12 of the A.G.M. of 18/12/02."

The successful passing of Motions 2, 3 and 4 on 14 May by the overwhelming vote of 46 votes in favour to 4 against: 45 to 4, and 46 to 4, respectively, would generally be the end of the matter. However, the applicant has raised the argument that the resolutions were the result of owners having voted under the influence of false and misleading information provided to them by the body corporate committee, either negligently or deliberately. If this was found to be so, then the resolutions should be put aside, further expert opinion obtained and a fresh vote conducted on the basis of the additional information. Accordingly, it is necessary for me to review the information provided to owners.

The applicant makes a number of points in support of her contention that owners were improperly influenced by the committee document, "Rationale for Air Conditioning Policy" provided to owners for consideration of the 14 May motions. This policy paper was largely based on a report by Peter Ryan of Tod Consulting Engineers ("Tod") as an independent expert opinion of air conditioning in the building. The applicant listed the following specific concerns: firstly, the engineering report cannot be regarded as independent as Tod has been engaged by the body corporate over many years and has produced various reports on aspects of the building; secondly, there is a special relationship between Ryan of Tod and the committee chairperson/treasurer, Mr Pat Cridland, that may have influenced the choice of Tod and its report; thirdly, the applicant cites a number of aspects of the policy paper (architectural and graphics report, environmental issues, power loading and sufficiency, and body corporate legislative and procedure issues) which I shall deal with as necessary.

Before commenting on these matters, I would point out that both the applicant and the body corporate (committee and solicitors) have submitted a number of submissions in the matter, all of considerable length and with considerable documentation attached. Those by the applicant have comprehensive references to meeting minutes, correspondence details, quotes from reports, dates of visits to the scheme by service providers, omission of related costs, and the like. I have read all of those submissions. However, I do not intend to deal with each point and counter-point or to go into detail on the issues – they are many and often are only a gloss on the main point – but merely to give my view on the major points. For example, the applicant states that Tod admitted not having expertise in drawing up such a report (see initial grounds page 2), but does not source the statement.

The criticism that Tod is not independent because of its past association with the building, only points to the inherent advantages and disadvantages of a long-term service provider. On the one hand a long association means that the service provider has an expert familiarity with the building and its infrastructure and is therefore in an ideal position to give advice and undertake work, whereas on the other hand, this relationship can "lock" the body corporate into continuing the relationship because of continuing guarantees and private knowledge. Hence the allegation by the applicant that, there is a conflict of interest, real or implied, between its (Tod’s) interests and the provision of an objective report." However, the allegations are not supported by any evidence – the allegations remain general in nature. I agree with the applicant’s observation that a service provider in the position of Tod delivering a report, must also be seen to be independent, but there is nothing in the dealings between the committee and Tod in the documents before me that shows otherwise was the case here. Also, as an engineering entity, Tod needs to conduct itself so as to protect its reputation both within the engineering profession and amongst its clients and potential clients – this is the keystone which protects persons engaging a professional service provider. There is nothing that suggests Tod has not acted other than in a professional manner in its dealing with the body corporate committee.

The allegation concerning a close relationship between Ryan (Tod) and Cridland, is closely allied with the above criticism. The applicant states that her criticism does not relate to Mr Ryan’s professional abilities, but that Cridland, himself an engineer, has been on the committee for many years during Tod’s involvement with the building, and it was he who drew up the Scope of Work which set the parameters for Tod’s report. The applicant also declares that Cridland has been a "passionate" believer in mounting compressors on the sun-hoods – this seems certainly the case (eg, letter to owners on 7 September 2002).

Of course the mere fact that Cridland has been on the committee for some time means that he, and other in a similar position, will have had ceilings with Tod and likely Ryan. The fact that he is an engineer may mean that he will have taken a greater interest than others in Tod’s tenders, advice and, of course, the air conditioning report. That he is an engineer can be of obvious value to the body corporate. That he may so slant his Scope of Works, or use a personal relationship with Ryan (if he has one), to favour his view is, of course, a possibility – however, given that the process involves the committee and not Cridland acting unilaterally, with the relevant documents forming part of the body corporate records, that makes such behaviour difficult. However, as with the above allegation, there is nothing in the documentation (including the matter of fees) before me that suggests Cridland or Ryan have acted in any way improperly.

In regard to the other matters, the issue of power loading is a significant issue. The applicant refers to previous reports by Ashburner Francis in October 2002 and February 2003, where it states that the power loading capacity of the electrical cabling will only be sufficient for a number of additional air conditioners (around 11) being connected before the cabling has to be upgraded. The applicant says that owners will be aware of this cost which may be up to $20,000. The body corporate states that it is not only air conditioning that is adding to the electrical loading, but all manner of electrical items (additional televisions, computers, microwave ovens, etc). Ashburner has recently advised (letter dated 9 May 2003) that the cabling across both towers is sufficient to carry a further 20 air conditioners. The committee has discussed these matters which are minuted.

The architects report was compiled by Eric Hebron of Eric Hebron Architects Pty Ltd, and appears not to have any ties with Tod. The report is a comprehensive one and is the frontline document regarding the most appropriate design for the screening of externally sited compressor units. Although the applicant refers to a letter of a committee member, who is also an interior designer, I take this to be the brief letter of Catherine Anderson dated 16 February 2003 attached to the application, it seems to me that the committee has relied on the professional report of Hebron rather than this one. I cannot see that there is anything that I should consider further here.

There is some further comment by the applicant concerning information obtained from officers of the Information Service of this Office. This is a completely separate section to that of dispute resolution and adjudication. However, I can say that Information Service officers do not offer legal or other advice, but respond to enquiries by referring owners (and others) to the appropriate provisions of the legislation and any relevant adjudicator’s decisions. Information provided, which is as good as the information given, is always qualified according to the quality and accuracy of the facts given. In any case, any information given in a particular situation is irrelevant when the matter is adjudicated.

Order 3. That at the E.G.M. following the furnishing of an independent report covering all nominated criteria, a motion to provide for the cost of upgrading of the electrical mains is to be included.

No interim order was made in response to this request for the following reasons given then –

In regard to the third order sought, the applicant is asking that a further motion be included in the agenda relating to an electrical upgrade. Such an order would only be granted in extremely urgent circumstances, as owners themselves, either by motion of the committee or by a requisition notice of sufficient owners served on the committee, can bring the matter on for determination. The basis of the applicant’s objection is that the question of power adequacy needs to be addressed before approvals for air conditioner installations are given. In its report of 28 October 2002, Ashburner Francis, consulting engineers, has given an opinion that the current installation applications by owners can be presently accommodated, though there is a need to monitor loading because of the increasing level of power use for various purposes including air conditioning.

I have in any case further dealt with this topic under "Order 1" above. The service provider referred to by the applicant, Ashburner Francis, has more lately given the opinion that the cabling across both towers are capable of accommodating the installation of 20 additional air conditioners, which are the exact number of approvals authorised in the resolution to Motion 2 at the recent 14 May meeting.

In summary, for all of the above reasons I do not consider that the argument of the applicant in respect of the first three orders sought by her has merit and I have therefore dismissed the application in regard to these orders. I would also mention that the applicant requested an extension to the three month term of the initial interim order issued on 13 May 2003, however that request is now made redundant by the cancellation of the interim order by this second interim order.

The fourth order will be determined when the file is ready for adjudication under the chronological scheme for applications, which should be in 2 to 3 months time. I regret the delay in this order and the final order yet to be made.