Palm Grove Village Number Three [2004] QBCCMCmr 532 (4 November 2004)

Last Updated: 30 September 2005

REFERENCE: 0414-2004

ORDER OF AN ADJUDICATOR

MADE UNDER PART 9 OF CHAPTER 6

BODY CORPORATE AND COMMUNITY MANAGEMENT ACT 1997

Number of Scheme:	8797
Name of Scheme:	Palm Grove Village Number Three
Address of Scheme:	86 Lawrence Drive NERANG Q 4211

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

I hereby order that the body corporate must give effect to Motion 12 as proposed and considered at the annual general meeting held on 17 June 2004, being for the purchase by the body corporate of Lot 4 on Registered Plan 181802.

STATEMENT OF ADJUDICATOR’S REASONS FOR DECISION - REF 0414-2004

"Palm Grove Village Number Three" CTS 8797

The applicant body corporate has sought the following order of an adjudicator under the Body Corporate and Community Management Act 1997 ("the Act") -

"The unit owners and the present committee are seeking the Commissioner’s approval in having the NO votes for Motions 12, 13 and 14 overturned as we believe that the 3 unit owners have voted unreasonably and not in the best interests of the Scheme at Palm Grove Village ."


JURISDICTION:
This is a dispute between the body corporate (the applicant) and three lot owners (the respondents: Dimitrios ZAMFIRIS, owner of Lot 5 BUP 5694; Kerry Mae SLATTERY, the owner of Lot 9 BUP 5694; and Julia Margaret DICZHAZY, the owner of Lot 18 BUP 6428) concerning the failure of certain motions relating to the body corporate purchase of Lot 4 on RP 181802 and funding of the purchase, upon the dissenting votes of the three respondents. This is a matter that falls within the dispute resolution provisions of the legislation (see sections 227, 228 and 276 of the Act) and therefore may be determined by an adjudicator.

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 owners (Zamfiris of Lot 5 BUP 5694; Slattery of Lot 9 BUP 5694; and Diczhazy of Lot 18 BUP 6428) and to all other owners, with an invitation to respond to the matter of dispute raised in the application. Only one respondent, Diczhazy, made a submission, opposing the application. Individual owner submissions were received from R & B Whitford, I Johnson, D Woodland, P & J Sorensen, A Laimer, and E Sloman who all supported the application. The applicant did not view the respondent’s submission in order to be able to lodge a reply to them (see sections 244 and 246 of the Act).


DETERMINATION:
"Palm Grove Village" was first registered as a building units plan (now termed a building format plan) on 14 July 1983 (BUP 5694 and 5694) and later on 27 November 1984, finally comprising 36 lots. It is regulated by the Body Corporate and Community Management (Standard Module) Regulation 1997 ("the Standard Module").

At the annual general meeting held on 17 June 2004, Motion 12 for the purchase of Lot 4 on RP 181802 (the "easement area") failed as a resolution without dissent on the dissenting votes of three owners. The following Motions 13 and 14 set out alternative options for funding the purchase but were not put to the vote after the failure of Motion 12.

The matter I must determine here is a simple; whether to overturn the objection of the three dissenting voters and allow Motion 12 to be given effect to by proceeding with the purchase of the easement area. Schedule 5 to the Act sets out examples of the types of orders an adjudicator is empowered to make. Item 10 of the schedule states that if an adjudicator is satisfied that a motion requiring a resolution without dissent to pass was not passed because of opposition that in the circumstances is unreasonable, the adjudicator may order the motion be given effect to.

That is, to grant the order sought by the body corporate I need to be satisfied that the three dissenting votes are unreasonable. The discretion to overturn a failed resolution without dissent is not exercised lightly and requires a consideration of a number of factors, including; the degree of dissent, the effect of the failure/passing of the motion on the dissenters and owners generally and the substance and circumstances of the motion.

There are three dissenters, two of whom have not made a written submission to the application even though they were invited to do so. In choosing not to provide their reason for their dissenting vote, both have weakened their dissent. In the case of the remaining dissenter, Diczhazy, while she does not consider the purchase will provide an increased benefit to owners she is willing to mediate with the Department regarding the sale price of the land and associated costs if owners agreed. Her main concern appears to be more with the price than the purchase decision.

As against the three dissenters, there were 19 owners who voted in favour of the purchase.

In regard to whether the dissenters will be adversely affected by the purchase, there is nothing to show that the three will be affected any differently to other owners.

In regard to the substance and circumstances of the motion, I have a knowledge of this scheme from dealing with a dispute in the early 1990’s which involved the same matter at the core of this dispute, namely the easement agreements which require each lot owner as a beneficiary under their respective individual easement agreement to pay a 1/52^nd share of the cost of maintaining Lot 4 on RP 181802 ("the easement area" which adjoins the scheme lots) as levied by the grantor of the easement and owner of that parcel of land. Owners would be aware of the decision of the Queensland Court of Appeal in June 1994 stating that the grantor (then being Cedric and Lynley Deves) could levy payments comprising the cost of upkeep and maintenance of the relevant area and also reasonable time and labour costs of the Deves (as well as recovering specified costs such as rates and taxes). The current owner of the easement area is Grant Edward Dickson (owner of Lot 1 in BUP 6428) who purchased the parcel of land from the Deves some time in 1994 subsequent to the court’s decision which resulted in charges by Deves being significantly reduced.

In my experience as an adjudicator in having dealt with over 3,000 disputes, I have never seen a configuration of lots, common property and private land as exists in Palm Grove Village. In my view the arrangement should never have been approved as a community titles scheme (then a building units plan), leaving owners open to unreasonable charges (as occurred) requiring expensive litigation to remedy (as occurred). The uncertainty of the charges, and the possibility of future unfair charging and further litigation, can be removed with this purchase and I believe it is in the best interests of owners that it proceed.

Accordingly, for all of the above reasons I am satisfied that the dissenting votes to Motion 12 are unreasonable and it should be given effect to, and I have made the appropriate order.

While the purchase will mean an expense to owners, I am sure that the value of lots and their saleability will favourably reflect the removal of this unique and heavy impediment. The funding will be a matter for the body corporate to now consider.