Riverton Court [2004] QBCCMCmr 189 (6 April 2004)

Last Updated: 30 September 2005

REFERENCE: 0203-2004

ORDER OF AN ADJUDICATOR

MADE UNDER PART 9 OF CHAPTER 6

BODY CORPORATE AND COMMUNITY MANAGEMENT ACT 1997

Number of Scheme:	16590
Name of Scheme:	Riverton Court
Address of Scheme:	89 Riverton Street CLAYFIELD QLD 4011

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

the body corporate

I hereby authorise the committee for Riverton Court to spend $1,217.70 pursuant to Quotation No 0228 from Gilding’s 24HR Plumbing to replace the hot water system that supplies lots 3 and 6.

STATEMENT OF ADJUDICATOR’S REASONS FOR DECISION - REF 0203-2004

"Riverton Court" CTS 16590

Application

Riverton Court Community Titles Scheme (Riverton Court) is a 6 lot scheme under the Body Corporate and Community Management Act (Act) and the Act’s Standard Module Regulation (Standard Module). The scheme is designed for residential purposes. Lot boundaries are designated under a building units plan (now known as a building format plan).

This is an application by the body corporate for the authorisation of emergency expenditure to replace a hot water system that supplies lots 3 and 6 in the scheme.

The committee has sought this authorisation because the cost of $1217.70 to replace the hot water system exceeds the limit of $750 for committee spending for the scheme. The committee considers that replacement of the hot water system is urgent but has been unable to contact all owners in the scheme to approve the spending.

Jurisdiction

An adjudicator to whom an application is referred may make an order that is just and equitable to resolve a dispute about the exercise of rights or powers under the legislation (Act, 276). This application is for the authorisation of committee expenditure rather than a typical dispute between parties. However, the legislation adopts a broad definition of dispute that includes declaratory relief (Act, 227(2)) and specifically contemplates the authorisation of emergency expenditure by an adjudicator (Standard Module, 103(1)(c)).

In this instance, the body corporate has submitted that it has endeavoured to contact all owners to approve the spending. Five of the six owners have given their permission but the body corporate has been unable to contact the remaining owner. The body corporate submits that, as two owners are without hot water, this application should be dealt with urgently. The legislation provides for direct referral to an adjudicator without seeking submissions from all parties when justified by the nature or urgency of the circumstances. As the hot water system has completely failed, I am satisfied that an urgent order to allow the situation to be rectified is justified. While orders made in these circumstances will normally only provide interim relief I am satisfied that it is appropriate to consider the grant of an authorisation for emergency expenditure by way of final relief (Standard Module, 103(1)(c)).

Submissions

The body corporate’s main submissions were to the effect that:

• The hot water system supplying units 3 and 6 has completely failed and the committee has obtained two quotations for its replacement. One quotation is for $1,217.70 with the other being for $1,320.00;
• This expenditure exceeds the limit for committee spending but five of six owners have approved the expenditure;
• One owner cannot be contacted and an urgent order to give permission for a new hot water system is sought.

Decision

Applicable law

Relevant legislation includes provisions to the following effect:

• Subject to some exceptions, the body corporate is required to maintain common property (Standard Module, 109(1));
• An individual owner is required to maintain a hot water system if that system only supplies that owner’s lot (Standard Module, 109(3)(b));
• The committee has power to act for the body corporate (Act, 100(1)). However, the committee cannot spend an amount representing more than $125 per lot for any one proposal unless authorised by a resolution of the body corporate, written consent of all owners, authorisation by an adjudicator, or in compliance with an order (Standard Module, 103).

Authorisation of spending

I am satisfied from the quotes provided that it is necessary to replace the hot water system. Because the hot water system supplies more than one lot, this is a body corporate responsibility.

The main issue to be determined is whether these are appropriate circumstances to authorise the spending as emergency expenditure (Standard Module, 103). This is an important issue as an authorisation of emergency expenditure by an adjudicator deprives owners of the opportunity to consider the spending themselves at a general meeting. On the other hand, there are a number of circumstances where it is inappropriate or unnecessarily inconvenient for the body corporate to have to call a general meeting before undertaking some expenditure.

In this instance, lack of hot water is more likely to result in inconvenience than serious health and safety issues. On the other hand, the expenditure sought is only slightly more than $200 per lot and does not greatly exceed the limit for committee spending. The body corporate has obtained two quotations that justify this expenditure and has submitted that the majority of owners have been contacted and approve the spending. It is understandable that the failure of the existing hot water system has made this expenditure urgent and, on balance, I am willing to authorise the spending as emergency committee expenditure (Standard Module, 103(1)(c)).

Order

For these reasons, I make the order above.