Imperial Surf [2005] QBCCMCmr 525 (23 September 2005)

Last Updated: 19 July 2006

REFERENCE: 0271-2005

ORDER OF AN ADJUDICATOR

MADE UNDER PART 9 OF CHAPTER 6

BODY CORPORATE AND COMMUNITY MANAGEMENT ACT 1997

Number of Scheme:	9742
Name of Scheme:	Imperial Surf
Address of Scheme:	72 - 80 Esplanade SURFERS PARADISE QLD 4217

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

Mr George Ruttle, the Owner(s) of lot 146

I hereby order that the application for orders, including orders that will allow installation of a new PABX telephone system by declaring invalid a resolution that itself revoked a prior resolution to install a new PABX system, is dismissed.

STATEMENT OF ADJUDICATOR’S REASONS FOR DECISION - REF 0271-2005

"Imperial Surf" CTS 9742

Application

Imperial Surf Community Titles Scheme (Imperial Surf) is a 165 lot scheme under the Body Corporate and Community Management Act 1997 (Act) and the Act’s Standard Module Regulation (Standard Module). The scheme is designed for residential purposes.

This application is by George Ruttle, an owner of lot 146 (applicant) seeking orders against the body corporate (respondent). The applicant is seeking an order that will allow installation of a new PABX telephone system by declaring invalid a resolution that itself revoked a prior resolution to install a new PABX system.

Background

The body corporate owned a PABX telephone system that was used for the benefit of all occupiers. However, it is alleged that the body corporate subsequently sold the PABX system to the letting agent and subsequent letting agents have not operated this system in the best interests of those occupiers who are not in the letting pool.

At an annual general meeting on 4 May 2004, the majority of owners voted for the installation of a second PABX from Samsung Communications at cost of $49,017 with the intention that this PABX be available for the benefit of all occupiers.

It is alleged that the committee of the time failed to take the necessary steps to implement this decision by owners and that the chairperson subsequently told the committee that legal advice had been received from the solicitor for the body corporate that a separate system could not be installed as it would interfere with the rights of the letting agent. The chairperson therefore said that the resolution by owners that the body corporate install its own PABX could not be implemented and would have to be revoked at the next general meeting.

At the annual general meeting on 27 April 2005 owners voted to revoke the resolution that the body corporate install its own PABX system.

Submissions

The applicant’s main submissions were to the effect that he did not believe the body corporate’s solicitors had provided legal advice opposing the installation of the PABX and that the revocation of the decision that the body corporate install its own PABX was based on false presumptions and should be revoked. He also provided a copy of a written advice from the body corporate’s solicitors stating that the body corporate could install its own PABX without contravening its agreement with the letting agent.

The body corporate’s main submissions were to the effect that the new committee supports the installation of the PABX but that the quotations from May 2004 are now out of date. The committee therefore proposes submitting new quotations to owners at the next general meeting.

Other owners have made submissions. All these submissions support the application.

Decision

A committee is required to put into effect the lawful decisions of the body corporate in general meeting (Act, 101). Further, there is a general requirement that a body corporate act reasonably in administering the common property and body corporate assets and carrying out its functions (Act, 94(2)).

The applicant has raised serious questions about whether the body corporate chairperson at the relevant time ever received any advice from the body corporate’s solicitor that installation of a separate PABX by the body corporate would contravene the body corporate’s agreement with its letting agent. This in turn raises questions about whether owners were misled in relation to their vote to revoke the earlier resolution to install the PABX and whether this amounted to a failure of the body corporate to act reasonably in carrying out its functions.

However, an adjudicator is required to make an order that is just and equitable in all the circumstances to resolve a dispute (Act, 276). I have some concerns about making the orders sought particularly given the age of the quotations adopted at the time of the initial resolution. In these circumstances, I consider it preferable that new quotations be sought as proposed by the present committee and owners be given the opportunity to vote on current quotations. I therefore decline to grant the orders sought.

Order

For these reasons, the application is dismissed.