Paddington Lodge [2005] QBCCMCmr 549 (6 October 2005)

Last Updated: 19 July 2006

REFERENCE: 0397-2005

ORDER OF AN ADJUDICATOR

MADE UNDER PART 9 OF CHAPTER 6

BODY CORPORATE AND COMMUNITY MANAGEMENT ACT 1997

Number of Scheme:	8602
Name of Scheme:	Paddington Lodge
Address of Scheme:	33 Terrace Street Paddington Qld 4064

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

Mr Nikolas Aitken, the Owner of lot 2

I hereby order that the body corporate repairs or replaces windows in both bedrooms and the lounge/diner of Lot 2 owned by the applicant Nikolas Aitken, in the manner and in the time frame following:- 1. that the committee for Paddington Lodge CTS decides on a preferred contractor from the quotations obtained; 2. that if there are insufficient funds in the sinking fund budget for the repair or replacement of the applicant’s windows, that the body corporate, at a general meeting, by ordinary resolution fixes a special contribution to be levied on the owner of each lot towards the liability, and decide whether the contribution is to be paid in a single amount or in instalments and, if in instalments, the number of instalments; and fix the date on or before which payment of the single amount or each instalment is required, the whole in accordance with section 95 of the Standard Module; 3. that the levy (if required) is to be fixed, and the preferred contractor engaged to commence the repair or replacement of the applicant’s windows within three months of the date of this order.

STATEMENT OF ADJUDICATOR’S REASONS FOR DECISION - REF 0397-2005

"Paddington Lodge" CTS 8602

APPLICATION

This is an application dated 25^th May 2005 as amended on 14^th June 2005, and 12^th September 2005 by Nikolas Aitken, (the applicant) owner of Lot 2, against the body corporate for Paddington Lodge CTS (the body corporate) for an order that the body corporate "approve the replacement windows for Unit 2", the applicant’s lot.

The nature of the dispute is that the applicant has requested replacement windows, and the committee has put the motion to a general meeting, but the body corporate has not passed the motion at a general meeting.


JURISDICTION

Paddington Lodge CTS 8602 is a community titles scheme governed by the Body Corporate and Community Management Act 1997 ( the Act) and the Body Corporate and Community Management( Standard Module) Regulation (the Standard Module). There are 6 lots in the scheme created under a building unit plan of subdivision.

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 the 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)). An adjudicator's order may contain ancillary and consequential provisions the adjudicator considers necessary or appropriate (section 284(1)).

SUBMISSIONS

Submissions were invited from all 5 other lot owners and the body corporate in accordance with section 243(2)(b) of the Act. There were no submissions from the body corporate, or any other lot owners.

DETERMINATION

In a scheme where the lots are created under a building unit plan of subdivision or BUP, now called a "building format plan" of subdivision, the body corporate takes responsibility for specific items and structure as defined at section 109 of the Standard Module. Section 109(2) states as follows -

S.109

(1).................

(2) To the extent that lots included in the scheme are created under a

building format plan of subdivision, the body corporate must--

(a) maintain in good condition--

(i) railings, parapets and balustrades on (whether precisely, or

for all practical purposes) the boundary of a lot and

common property; and

(ii) doors, windows and associated fittings situated in a

boundary wall separating a lot from common property; and

(iii) roofing membranes that are not common property but that

provide protection for lots or common property; and

(b) maintain the following elements of scheme land that are not

common property in a structurally sound condition--

(i) foundation structures;

(ii) roofing structures providing protection;

(iii) essential supporting framework, including load-bearing

walls.

(3) Despite anything in subsections (1) and (2)--

(a) the body corporate is not responsible for maintaining fixtures or

fittings installed by the occupier of a lot if they were installed for

the occupier’s own benefit; and

(b) ........................
(c).........................

(4) To avoid doubt, it is declared that, despite an obligation the body

corporate may have under subsection (2) to maintain a part of a lot in good

condition or in a structurally sound condition, the body corporate may

recover the prescribed costs, as a debt, from a person (whether or not the

owner of the lot) whose actions cause or contribute to damage or

deterioration of the part of the lot.

(5) In this section--

"prescribed costs" means the proportion of the reasonable cost to the

body corporate of carrying out the maintenance that can, in the body

corporate’s reasonable opinion, be fairly attributed to the person’s

actions.

The only reason therefore that the applicant’s windows should not be maintained by the body corporate is if they are not situated in a boundary wall separating a lot from common property; or if he (or a previous owner) has installed some other type of window with the approval of the body corporate for the benefit of his lot (s.109(3)); or if his actions have caused or contributed to damage or deterioration of the window (s.109(4)). There is no such material supplied which makes me think that this is the case.

The applicant has provided at my request, a plan of the three windows he wishes to have replaced which are all in exterior walls of his unit (bedroom 1, bedroom 2, lounge-room) and in the storeroom which is located on the ground floor beneath unit 6.

The building inspection report obtained by the applicant on 25^th May 2004 shortly prior to the purchase of the lot notes that windows in the lounge/dining area, kitchen, the bathroom, bedroom 1 and bedroom 2 required maintenance to their rollers as they were " heavy to slide." He also noted that some general repairs and maintenance was required to screens.

The applicant says that either before or after purchase he spoke to the body corporate manager who advised that some other units had recently had their windows replaced, and suggested replacement in lieu of repair. The body corporate manager obtained 4 quotations and advised that the matter should be put to a general meeting for approval by the body corporate.

At an extraordinary general meeting (EGM) convened on 5^th May 2005 but adjourned until 12^th May 2005, a motion was proposed by the body corporate committee, described as an ordinary resolution, for the replacement of the windows in Unit 2 . Four out of the 6 lot owners were represented (three by voting paper and one by proxy), but not one of them was present personally so the body corporate manager who was chairing the meeting decided that a quorum was not represented.

Whilst I consider that certain aspects of the procedure adopted for this meeting were not correct, I do not consider that there has been any prejudice to lot owners by the failure of correct procedure. It appears that lot owners do not appreciate that it is the responsibility of the body corporate to undertake such repairs, or replacement where repairs are not a viable option.

It would in my view, be a pointless exercise to ask the body corporate to reconvene a general meeting to put the four quotations on the motion again. Points which are relevant about the procedure of this meeting are as follows:-

o A quorum is obtained if at least 25% of the number of voters are present, and a voter is taken to be present if he is present "personally, by proxy or by written or electronic voting paper" ( section 48(1) Standard Module) save that for a scheme of 3 or more, 2 voters must be present personally;

o In the circumstances where no quorum is obtained within 30 minutes of the commencement of the meeting, the meeting automatically should be adjourned for 7 days to the same time and place. (section 48(3) Standard Module);

o If at the adjourned meeting, a quorum is again not present, the persons present ( whether personally or otherwise) form a quorum if the chairperson is present personally, or if the chairperson is not present personally, the body corporate manager, exercising the powers of the chairman under an authorisation given by the body corporate is present personally (section 48(4) Standard Module);

o Where two or more quotes have been obtained, copies of the quotations should be attached to the notice of the meeting ( section 104 (5) Standard Module) ; the motion should be put in the alternative in accordance with section 42B Standard Module; and an explanatory note sent out with the notice (section 42C) as follows--

42B Motion with alternatives
(1) This section applies if 2 or more motions (the "original motions")
proposing alternative ways of dealing with the same issue are submitted,
under section 41, as motions for consideration at a general meeting of the
body corporate.
Example for subsection (1)--
The secretary of the body corporate receives motions from 3 lot owners proposing the
engagement of a person as a body corporate manager. Each motion proposes a different
person.
(2) A voting paper for the general meeting must--

(a) list as alternatives under 1 motion submitted by the committee
(a "motion with alternatives"), the substance of each of the
original motions; and
(b) show, after the motion and each alternative listed under it, a

blank space for voting purposes.

(3) A person who is a voter for the general meeting may vote either--

(a) for the motion, by voting for the motion and for 1 of the
alternatives listed under the motion; or
(b) against the motion.

(4) If the required resolution is passed for the motion--

(a) the alternative with the most votes is the body corporate’s
decision; or
(b) if 2 or more alternatives (the "qualifying alternatives") receive
an equal highest number of votes--the qualifying alternative that

is the body corporate’s decision must be decided by chance in the

way the meeting decides.

(5) If more than 1 motion about the same issue is listed on the agenda, or
stated in a voting paper, for the meeting, all motions about the issue are
void.

42C Explanatory material accompanying voting paper
(1) A voting paper for a general meeting must be accompanied by an
explanatory schedule if--

(a).............
(b) ............

(c) the voting paper states a motion with alternatives;

(d)..........

(e)...............

(2) ..........
(3) ..........
(4) The explanatory schedule must, for a motion with alternatives,
include each of the following--

(a) each motion ("original motion"), the substance of which is

stated as an alternative under the motion with alternatives, in the

form in which it was submitted under section 41;

(b) an explanatory note about each original motion, given to the

secretary by the submitter of the original motion, if the note is

not longer than 300 words;

(c) an explanatory note stating that voters must vote either--

(i) for the motion, by voting for the motion and for 1 of the
alternatives; or
(ii) against the motion.

Example of an explanatory note for subsection (4)(c)--

To vote on this motion, you must either vote against the motion OR vote for the

motion and 1 alternative.

To vote against the motion--Mark ‘No’ opposite the motion on the voting paper. If

you mark ‘No’, do not place a mark beside any of the alternatives. To vote for the

motion and 1 alternative--Mark the voting paper in 2 places. Firstly, mark ‘Yes’,

opposite the motion on the voting paper. Secondly, mark ‘Yes’ opposite the alternative

you want to vote for. You can vote for only 1 alternative.

(5) ................

(6) ...et seq.

o If a quorum is not obtained, then the meeting does not proceed and the votes are not counted.

It seems that the body corporate convened the adjourned meeting on 12^th May 2005 under section 48(3) of the Standard Module. The persons present, (whether personally or otherwise) would then be Nikolas Aitken, Alfred Evans and Robert Minarends ( or Mijnarends). It is not clear whether Bronwyn Evans, chairman, attended or not. If the body corporate manager chaired the meeting, presumably with authorisation to do so, then a quorum was present at the meeting of 12^th May 2005, and the votes should have been counted, as they were. The notification on the minutes for that meeting that, "The chairperson declared that a quorum was not represented" is therefore something of a mystery..

Although this was a motion proposed by the committee, it seems that committee members did not vote for it. The committee elected at the AGM of 28^th October 2004 consisted of 4 persons, only one of whom, Robert Minarends, voted at the EGM.

However, the motion in the alternative was not correctly set out, and there appears to have been no explanatory note for the lot owners about what the different quotations entailed and why the windows needed replacement ( for example, in lieu of repair). There was further no note about the obligations of the body corporate for maintenance of lots created under a building format plan.

In a scheme of only six lot owners, the replacement of windows in accordance with the quotations obtained, will result in significant expenditure and should be budgeted for in the sinking fund. Whilst I note that lot owners have voted against obtaining a professional sinking fund forecast at their AGM of 2004 (Motion 9), it remains an obligation of the body corporate itself to budget for the following 9 years to meet spending of a capital or non-recurrent nature ( section 100(3) Standard Module).

I further note that the owner of Lot 6 proposed a motion to a general meeting on 28^th October 2004 that his outside sliding windows were replaced as they were worn and "hardly operable" which motion was carried. It is not clear from this motion whether the body corporate was to do the work and whether a quotation for the work was approved by the body corporate. I am also advised by the applicant, on authority from the body corporate manager, that the owner of Lot 5 has had his windows replaced by the body corporate.

The applicant has provided me with the four quotations obtained by the body corporate manager in respect of Unit 2 as follows-

a) 15^th October 2004 from MSK Building Maintenance – replacement of 3 windows for "irrepairable and jamming window sets" - $2933.89;
b) 7^th December 2004 from Accomplish Property Maintenance Services – replacement of 3 windows with aluminium frames and insect screens - $2725

c) 11^th January 2005 from J &D Contracting - remove and replace three windows -$2629.
d) 24^th January 2005 Stegbar - replacement of 3 windows - $3448;

There is no reference to the storeroom window and I have no further information about that. In the absence of any submissions that the windows do not in fact need repair/replacement, I order as follows -

1. that the body corporate committee decides on a preferred contractor from the quotations obtained;
2. that if there are insufficient funds in the sinking fund budget for the replacement of the applicant’s windows, that the body corporate, at a general meeting, by ordinary resolution fixes a special contribution to be levied on the owner of each lot towards the liability, and decide whether the contribution is to be paid in a single amount or in instalments and, if in instalments, the number of instalments; and fix the date on or before which payment of the single amount or each instalment is required, the whole in accordance with section 95 of the Standard Module;
3. that the levy (if required) is to be fixed, and the preferred contractor engaged to commence the replacement of the applicant’s windows within three months of the date of this order.

The body corporate committee may also like to investigate the possibility of the preferred contractor replacing all windows which are irreparable and for which the body corporate is responsible by virtue of Section 109, Standard Module, to see if an advantageous price may be obtained for bulk work. This may include the store room referred to by the applicant. If this option is taken up, the matter should be put to a general meeting, detailing the work to be undertaken and the costs involved. Any special levy required may be struck at the same time. If the body corporate decides to take on a larger maintenance programme at this time it should not delay the work on the applicant’s windows.