James Place [2005] QBCCMCmr 664 (28 November 2005)

Last Updated: 16 January 2006

REFERENCE: 0823-2005

ORDER OF AN ADJUDICATOR

MADE UNDER PART 9 OF CHAPTER 6

BODY CORPORATE AND COMMUNITY MANAGEMENT ACT 1997

Number of Scheme:	9374
Name of Scheme:	James Place
Address of Scheme:	55 Duet Drive, MERMAID WATERS Q 4218

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

Stanley Francis Offer, the owner of lot 22

I hereby order that the motion purporting to obtain owners’ approval for the replacement of the perimeter fence by a postal vote, forwarded to owners under cover of an undated letter from the secretary/treasurer following the body corporate committee meeting held on 13 November 2005 was at all times void.

STATEMENT OF ADJUDICATOR’S REASONS FOR DECISION - REF 0823-2005

"James Place" CTS 9374

ORDER SOUGHT

The applicant has sought an order of an adjudicator under the Body Corporate and Community Management Act 1997 (the Act) as follows:

A general meeting to include all owners to vote on the proposal for a new fence to be paid from the sinking fund.

The applicant has also sought an interim order of an adjudicator that the committee be instructed to take no further action on the fence prior to the deadline of 25 November 2005.

JURISDICTION

The application evidences a dispute between the owner of a lot included in a community titles scheme and the body corporate for the scheme (section 227(1)(b) of the Act).

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)).

Section 279(1) of the Act allows an adjudicator to make an interim order if satisfied, on reasonable grounds, that an interim order is necessary because of the nature or urgency of the circumstances of the application.

SCHEME DETAILS

James Place is a community titles scheme comprising 23 lots and common property which was registered in a building units plan (now described as a building format plan) on 10 November 1983. The scheme is regulated by the Body Corporate and Community Management (Standard Module) Regulation 1997 (Standard Module).

BACKGROUND

The applicant stated that he had resigned as secretary/treasurer of the body corporate at the annual general meeting in 2005 after 15 years in that role. He explained that at the 2004 annual general meeting he had successfully argued that the perimeter fence should be repaired as needed, not replaced, as some committee members had wanted. The applicant further explained that within a week of his resignation, there were plans to erect a new fence, even though the applicant explained to the incoming secretary that approval for the fence would require an extraordinary general meeting.

The applicant stated that the body corporate committee had arranged for a postal vote from all owners on the proposed fence, which the applicant understood was contrary to the Act.

The Dispute Resolution Application was received by post in the Commissioner’s office on 21 November 2005. The Commissioner allocated the file to me, and I arranged for a teleconference between the applicant and the secretary, Mr La Rocca on Wednesday 23 November 2005. Mr La Rocca advised a member of the Commissioner’s staff, Ms Christine Wilson, that he was aware of the application.

During the teleconference I explained to Mr La Rocca that the mechanism for obtaining approval for projects such as the perimeter fence was set out in the Standard Module. I also explained that there was no provision under the Standard Module for a postal vote on such an issue. Mr La Rocca advised me that he had already alerted the body corporate committee to the fact that no further action could be taken in relation to the fence until this application was determined.

Discussion then took place as to the requirements of the Standard Module in relation to budgets, special levies, committee spending and major spending.

DETERMINATION

Section 103 of the Standard Module deals with committee spending. The limit for that spending in this scheme is an amount worked out by multiplying the number of lots in the scheme by $125.00 – therefore $2,875.00. The two quotes for the proposed fence not only exceed the limit for committee spending, they also exceed the limit for major spending (the number of lots multiplied by $250.00) – see section 104 of the Standard Module.

Therefore the body corporate must not only have the proposal approved by owners in general meeting, the motion seeking approval must be listed as a motion with alternatives (see section 42B of the Standard Module). If any other owners wish to obtain quotes, say for a different style of fence to that for which the committee has obtained quotes, then those owners must obtain at least two quotes if the cost exceeds $5,750.00, and submit a motion to the secretary in sufficient time for it to be included on the agenda of the extraordinary general meeting. All quotes must be provided to owners with the meeting material and listed under the motion so that owners have the opportunity to express their views on all proposals.

As the fence has not been included in the budget for this year, then if owners approve the fence, a special levy must be raised to cover the cost of installation (see section 95(2) of the Standard Module).

Owners may also decide that rather than approve the fence now, and have to pay a special levy, that they will instead include it as part of the budget for the next financial year, and raise the money to cover the cost of the fence through the quarterly levy payments.

Clearly, however, the recent approach to owners in relation to the fence is not a valid means by which to approve it. I have therefore ordered that the motion purporting to seek approval for the replacement of the perimeter fence forwarded to owners under cover of Mr La Rocca’s undated letter following the body corporate committee meeting of 13 November 2005 was at all times void.

Another matter that was discussed during the teleconference related to the body corporate’s sinking fund forecast. It appeared from the discussions that such a forecast had not been done in the past. The committee must ensure that the next financial year’s sinking fund budget addresses this issue (see section 94(3) of the Standard Module).

This order disposes of the application in its entirety. It is not necessary to make any further order.