Toowong Regis [2004] QBCCMCmr 71 (6 February 2004)

Last Updated: 30 September 2005

REFERENCE: 0538-2003

ORDER OF AN ADJUDICATOR

MADE UNDER PART 9 OF CHAPTER 6

BODY CORPORATE AND COMMUNITY MANAGEMENT ACT 1997

Number of Scheme:	14850
Name of Scheme:	Toowong Regis
Address of Scheme:	32 Miskin Street, TOOWONG QLD 4066

TAKE NOTICE that pursuant to an application made under the abovementioned Act by Julie Margaret Straughair, the owner of lot 6

I hereby order that, at its next general meeting, the body corporate shall consider and determine a motion seeking ratification of the proposal the subject of the committee resolution dated 5 July 2003. I further order that the motion shall be submitted to the secretary for inclusion on the agenda of the next general meeting by Byron Bindley and Alan Callaghan. I further order that the motion shall be determined by ordinary resolution.

STATEMENT OF ADJUDICATOR’S REASONS FOR DECISION - REF 0538-2003

"Toowong Regis" CTS 14850

The applicant, Julie Margaret Straughair, the owner of lot 6, has sought the following order of an adjudicator under the Body Corporate and Community Management Act 1997 (the Act) quote –

An order be issued that the retaining wall work cease immediately.
An official ruling noting the legality or otherwise, of this work and its commencement before approval was sought.
An order be issued (if possible) that the site be returned to its original condition before unlawful work. ...

The applicant also sought an interim order "be issued as soon as possible in the anticipation that the work will not be completed". The requested interim order was dismissed. In the reasons for my determination of the interim order, I stated as follows –

Prior to the making of this interim order, this office sought to obtain submissions relating to the requested interim order from the two respondents, and the body corporate committee. The closing date for submissions was stated to be Monday 25 August 2003. The necessity for such a short time frame is due to requested interim orders being required to be made in urgent circumstances of varying degrees of urgency. By the close of submissions, I have the benefit of a submission from the two respondents, but not the committee. This is not fatal, since all I am considering at this time is whether or not to make the requested interim order. I consider I have sufficient information to proceed with this aspect. Moreover, once this interim order has been made, these parties and the body corporate committee, together with all owners, will be invited to make a submission in relation to the final orders sought by the applicants.

The interim order sought by the applicant is presumably to the effect of the final order sought; namely that the "retaining wall work cease immediately". In requesting the interim order, the applicant has stated that if the work is allowed to be completed, "regarded of legality, there may be a tendency more for owners to be reconciled to its existence, a personal advantage no doubt appreciated by those who appear to knowingly undertake illegal work, knowingly disrespecting the rights, investment values, current and future risk mitigation and welfare of all other owners".

In there submission, Messrs. Bindley and Callaghan have submitted that the work is being undertaken pursuant to a valid committee resolution. A copy of that resolution is included with their submission. The relevant approval states that the committee has approved the following improvements be carried out –

Construction of a stairway from the lower A level of 32 Miskin Street to the grassed southern lawn areas to facilitate easier ambulance access from these units to the street and also to beautify the outlook.

The improvements are planned to consist of:
Widening of the existing narrow pathway in front of units 2, 3 and part of 4 to alleviate flooding of these units during periods of heavy rain.
Two non-load bearing retaining walls constructed of treated hardwood sleepers incorporated gardens and central steps.

We also authorise reimbursement for materials only; labour costs will not be claimed.

The resolution is signed by 4 members of the committee and apparently resolved on 5 July 2003.

Also included with the submission are before and after photos. The photos show that the work in question is all but completed. Even the applicant’s owns photos included with her application show that the work had been significantly commenced.

In the circumstances, given the apparent approval by the committee, and the near completion of the work, I see no point in making an interim order that the work cease.

In the final order to be made, I will consider the second aspect raised by the applicant; namely a ruling as to the validity or otherwise of the work, and its alleged commencement before approval was sought.

The applicant has sought the orders against –

• The owner of lot 2, Alan Michael Callaghan (Callaghan);
• The owner of lot 3, Byron Elmslie Bindley (Bindley).

The application relates to alleged unauthorised building work (a retaining wall) being constructed on common property by the two respondents.

Subsequent to the making of the interim orders, the applicant amended the orders sought by her to be as follows –

An official ruling on whether the procedures followed in the project approval conformed with procedures set out under (the Act), and
A caution addressed to the current chair and treasurer where the appropriate procedures were not followed, and a request to abide by the Act in the future.

The amendment of the orders sought reflect a significant change in position on the part of the applicant. The applicant states that she continues to be concerned "about accountability and consultation". Further, she expresses the view that the "retaining wall and drain work was conducted without the full and proper approvals required under (the Act)". The respondents continue to rely on the approval allegedly given by the committee to the work.

The first issue I consider relevant is what is the required level of approval: committee or body corporate in general meeting.

The work is variously described as an improvement. It cannot be maintenance as that concept can only relate to something which is existing, not something new. Improvements to the common property by the body corporate are dealt with in section 113 of the standard module, quote –

113 Improvements to common property by body corporate--Act, s 159
(1) The body corporate may make improvements to the common property if--
(a) the cost of the improvements, or, if the improvements together with associated improvements form a single project for improvement of the common property, the cost of the entire
project, is not more than an amount (the "improvements limit") worked out by multiplying the number of lots included in the scheme by $300; or
(b) the improvements are authorised by special resolution; or
(c) an adjudicator, under an order made under the dispute resolution provisions, decides the improvements are reasonably necessary for the health, safety or security of persons who use the common property and authorises the improvements.
(2) For subsection (1)(a), if a series of associated improvements forms a single project, the cost of any 1 of the improvements is taken to be more than the improvements limit if the cost of the project, as a whole, is more than the improvements limit.
(3) This section has effect subject to part 7, division 6.41

Practically, the work which a committee might approve is largely governed by the cost of the proposal. A committee is subject to section 103. The relevant limit for committee spending is now $125, but at the relevant time, was $100 per lot. With 12 lots in the scheme, the maximum limit for expenditure by the committee was $1200. If the expenditure exceeded this amount, then it could not be approved by the committee, subject to section 103 and 104. Expenditure between $1200 and $3000 required the approval of the body corporate in general meeting by ordinary resolution (section 103(1)(a)), and expenditure exceeding $3000 (or $250 per lot) required a special resolution (section 113(1)(a)). Parties should note that the above figures have now changed in consequence of recent amendments however they were the amounts at the time of the work being undertaken.

No figures of the cost of the work have been provided to me by either party. All I do know is that the committee resolution states that "reimbursement for materials only; labour costs will not be claimed". Given that the cost to the body corporate was for materials only, and given the scope of the work, I am prepared to make an assumption that the cost did not exceed $1200; the maximum amount which the committee is authorised to approve. If the cost did exceed this amount, then as I have previously stated, either an ordinary resolution, or even a special resolution of the body corporate in general meeting would have been required.

Proceeding on the assumption that a committee resolution was sufficient to authorise the work, I now intend to consider the validity of the committee authorisation. Firstly, there is the question of the applicant’s alleged membership of the committee. This is a side issue, I do not intend to determine. It was not raised specifically by the applicant, nor has it been argued fully by the parties. Finally, it is not integral to the outcome of this dispute.

I now turn to consider the validity of the approval given by the committee. The resolution carried by the committee on 5 July 2003, and preceeding the commencement of the work, is signed by 4 committee members. Ostensibly it appears to be in order. What is not so clear however is whether correct procedures were followed in the carrying of this resolution. In his submission, the respondent Bindley states -

Alan Callaghan and I have put the proposal to the committee and the committee agreed to our proposition after some discussion on the merits, or otherwise, to remedy these problems before the storm season starts. ...

The committee met on the 5^th July and the project with drawings put to the committee and the committee approved of the project and work did not start until 26^th July 2003.

Whilst this might very well have occurred (there is little or no evidence from any owner other than the applicant to either confirm or dispute this) it does not explain or excuse the fact that several very clear requirements of the legislation appear to have been overlooked or disregarded. There appears to be no evidence of notice of the relevant committee meeting having been given (see section 28) with an agenda included (section 30). One owner states -

I am unable to comment on the process’s that took place in obtaining permission to commence constructions, other than to say that Byron Bindley and Alan Callaghan ... mentioned the proposal to construct the wall to me and I commented that it sounded like a good idea. I had no further communication with them regarding the wall.

It seems that the method of informing owners of the proposal was both informal and selective. The applicant claims to have received no notice of the proposal whatsoever. Bindley acknowledges this in his correspondence of 19 October 2003: "Miss Straughair is correct in one of her statements – she was not directly consulted ...".

Moreover, there is no evidence that the requirements of section 36 were complied with including the distribution of full and accurate minutes to all owners who were not members of the committee (section 36(2)(b)) or further, that owners were afforded the opportunity of giving a notice of opposition to the carrying out of the resolution of the committee (see section 37). Another owner states –

Because I did not forward the form ... to say that "I do not wish to receive copies of Notice of Committee Meetings ... I am waiting to receive a copy of committee resolutions (or committee minutes) of that owner’s on site meeting, which technical details and costing, before I can make an informed submission in relation to this dispute matter.

This submission was made on 17 September, 2003, by which time most of the work had been completed.

Whilst the respondents believe that the works where correctly approved, it seems clear to me that the procedures following in obtaining the relevant approval were informal, limited, and not in compliance with a number of legislative requirements, in particular those I have set out above.

The question then becomes whether approval given in such circumstances is valid. Bindley states that –

The building project, which Miss Straughair objected to, was discussed with owner residents over a considerable period of time and there was a general agreement that the project was welcome. ...

Clearly the work has been done, and excepting the applicant no owner has written specifically opposing the work. Of the two other owners who did respond to the notice inviting submissions, one gives qualified support to the work, while the other is more circumspect than this, still waiting to receive minutes etc in order to make an informed decision on the matter.

In the circumstances, I intend to order that the work should be the subject of ratification by the body corporate in general meeting by ordinary resolution. I consider that this is justified on the basis of the informal and limited nature of the information provided to owners regarding the work to date. All owners should be fully informed of the cost of the proposal and able to vote based on being fully informed. A real question will arise if the motion is not carried. In this circumstances, I consider that the body corporate in general meeting will have to determine what sanction, if any, to impose on the respondents.