Cannington Court Garden Villas [2005] QBCCMCmr 742 (20 April 2005)

Last Updated: 13 July 2007

REFERENCE: 0656-2004B

INTERIM ORDER OF AN ADJUDICATOR

MADE UNDER PART 9 OF CHAPTER 6

BODY CORPORATE AND COMMUNITY MANAGEMENT ACT 1997

Number of Scheme:	7132
Name of Scheme:	Cannington Court Garden Villas
Address of Scheme:	24 Cannington Place HELENSVALE QLD 4212

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

Mr Weston & Mr B Tworek, the Owner(s) of lots 15 and 10 respectively

I hereby order that, pending a final resolution of this dispute, any resolution passed by the body corporate at its general meeting called by notice dated 22 March 2005 for 5:30pm on 20 April 2005 is deemed ineffective to authorise the body corporate to engage a contractor to perform works to stabilise units. This is an interim order and will remain in effect for a period of not longer than two months. It is the responsibility of the applicants to apply to extend this order if no final determination has been made within that period. This order will automatically lapse upon a final order being made or this application being withdrawn.

STATEMENT OF ADJUDICATOR’S REASONS FOR DECISION - REF 0656-2004B

"Cannington Court Garden Villas" CTS 7132

Interim Application

Cannington Court Garden Villas Community Titles Scheme (Cannington Court) is a 24 lot scheme under the Body Corporate and Community Management Act (Act) and the Act’s Standard Module Regulation (Standard Module).

Lot boundaries are designated under a building units plan (now known as a standard format plan).

On 24 December 2004 I issued an interim order in relation to an application by Boris Tworek and Neil Weston, the owners of lots 10 and 15 respectively (applicants) seeking orders against the body corporate for Cannington Court (respondent). The application concerned a dispute about work the body corporate needs to perform to maintain the defective foundations of some of the villas in the scheme. The orders given included an order that Boris Tworek call a committee meeting at which the committee was to, among other things, make reasonable endeavours to prepare budgets and specify alternatives for maintaining the foundation structures of all villas in a sound condition.

In particular, this order stated that information regarding each alternative for maintenance of the foundation structures of the villas was to be distributed to owners including a brief description of the work, the likely and the maximum cost of the work, any period for which the work is guaranteed, details of any independent engineering advice, any implications for insurance of the scheme, and details of the likely time frame and inconvenience to occupiers.

Upcoming general meeting

On 18 April 2005, one of the applicants contacted this office to say that the body corporate was holding an extraordinary general meeting on 20 April 2005 to vote on alternative proposals to secure the defective foundations. The applicant makes submissions to the effect that:

• The body corporate has only been given one proposal and set of quotes that properly and permanently will fix the problems but this proposal was dismissed as too costly and the body corporate committee will not entertain this proposal;
• There is no independent engineer’s advice, guidance and control and the committee have put forward the proposals with no one taking responsibility for the success of the proposal;
• The committee have not provided two separate quotations for the recommended work but have provided only one quotation for each of three different ways of dealing with the problems;
• The proposals are at odds with expert advice previously received from a number of different sources. The adopted proposal may fall far short of the insurer’s requirements and continuation of that cover may be declined.

I have reviewed a copy of the voting paper of the meeting which proposes the three alternatives, being:

• Acceptance of quotations from Screw Piers Australia for $65,494. The attached quotations indicate approximately $20,000 for earth works, approximately $12,000 for construction of one hundred metres of rock walls, and approximately $28,000 for underpinning of units 5, 10, and 15;
• Acceptance of quotations from Mehrtens Underpinning and Construction for $91,751.22. The attached quotations indicate construction of concrete piers under the three villas followed by an attempt to jack the footings and brickwork back to the appropriate level;
• Acceptance of different quotations from Mehrtens Underpinning and Construction for $333,254.24. These quotations indicate that the work involved would be carrying out underpinning as per a proposal of Glynn Tucker Consulting Engineer, Job 13530, February 2004.

The explanatory schedule to the voting paper contained the following statement: "The committee recommends that owners accept the quotation from Screw Piers Australia as it is the most cost efficient option and engineers have assured representatives of the Body Corporate that this proposal is an entirely satisfactory resolution to the problem".

It seems extraordinary that the committee expects owners to make an informed decision on the best way to stabilise the units, requiring significant contributions from owners in the form of a special levy, on the meagre information provided with the notice of meeting. The notice does not include information that would appear relevant including a brief description of the work, the likely and the maximum cost of the work, any period for which the work is guaranteed, details of any independent engineering advice, any implications for insurance of the scheme, and details of the likely time frame and inconvenience to occupiers.

In particular, this office has been unable to obtain this information upon making enquiries of the body corporate manager and a committee member. For example, there is a suggestion that warranties offered are only verbal and that guarantees provided may only allow for rectification of defective work but would not allow for recourse for continued damage from further subsidence or provide for any underwriting of liability for defective work. This, together with the failure to provide details of the proposed terms of any agreement, raises serious questions regarding whether the motions put forward, even if passed, can amount to a proper authorisation to engage one of the contractors proposed. In these circumstances, it seems appropriate to grant an interim order that will operate for a short period of time to prevent engagement of any of the proposed contractors pending a final determination of the dispute.

I consider it important to allow the meeting and vote to proceed. I also understand that the situation is reasonably pressing and I would intend to make further orders to resolve the dispute as soon as practicable. Final orders may simply revoke this interim order and allow the body corporate to proceed with any alternatives adopted by the votes of owners. Alternatively, it may be necessary to require a further meeting to allow proposed works to be properly authorised.

Order

For these reasons, I make the interim order above.

The application will be allowed to proceed to submissions and a final determination in the normal course.