Sanderling [2006] QBCCMCmr 20 (13 January 2006)

Last Updated: 19 July 2006

REFERENCE: 0717-2005

ORDER OF AN ADJUDICATOR

MADE UNDER PART 9 OF CHAPTER 6

BODY CORPORATE AND COMMUNITY MANAGEMENT ACT 1997

Number of Scheme:	11382
Name of Scheme:	Sanderling
Address of Scheme:	40 Marine Parade, MIAMI QLD 4220

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

Grant Porter, the owner of lot 4

I hereby order that the application by Grant Porter, the co-owner of lot 4, for an order that the committee meeting of 25 September be declared invalid, as it was not called and conducted in compliance with the BCCM Act Standard Module, is dismissed.

STATEMENT OF ADJUDICATOR’S REASONS FOR DECISION - REF 0717-2005

"Sanderling" CTS 11382

The applicant, Grant Porter, the co-owner of lot 4, has sought the following order of an adjudicator under the Body Corporate and Community Management Act 1997 (the Act) quote:

1. The committee meeting 25/9/05 be declared invalid, as it was not called and conducted in compliance with the BCCM Act Standard Module 28 and 36(5) and contains decisions which could adversely affect all owners and / or individual owners.
2. New Garage Door (see section 103) That regardless of the voting of owners the committee of the body corporate be ordered to refrain from taking any action to replace the door apron at this time pending the matter being placed before the owners as required by the BCCM Act SM at a general meeting.
3. Relocation of recycling Bin. The decision to relocate the recycling bin area be deferred until it has been considered by all affected owners, including myself.
4. Lift Maintenance Contract. (see SM 104) The entering into a 5 year contract with Otis be also considered at a general meeting as the expenditure exceeds the limit the committee can approve.

The applicant also sought an interim order in respect of item 2 above. On 25 October, 2005, the requested interim order application was dismissed.

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)).

The scheme is a subdivision of 18 lots recorded under a building unit plan of subdivision (now a standard format plan). The regulation module applying to the scheme is the standard module.

In the interim order, I stated my reasons as follows, quote:

At this stage, parties should note that I am considering the requested interim orders only. In considering the interim order request, I have the benefit of a submission from a Mr Russell Caton, as secretary of the body corporate.

The applicant has sought a series of 4 orders, and refers to a fifth issue related to "floor upgrades" in his grounds. Although he refers to the all orders as interim orders under his heading "interim order sought", he does state that the most urgent is "item 2". It is clear that the first order sought by the applicant is not interim in nature. Rather it is final; the determination of the validity of a meeting. Consequently, I will not be considering this order in the context of this determination.

The applicant has requested that orders sought 2 (the garage door) and 4 (the lift maintenance contract) be referred to the body corporate in general meeting. He alleges that the garage door is in excess of the committee’s expenditure limit (under section 103 of the standard module), and that the lift maintenance contract is major spending under section 104 of the standard module. Given the submission of the secretary, I can deal with both of these matters quickly.

Regarding the garage door, the secretary has responded that:

The result of the poll was closely in favour of doing nothing and so no new door will be installed and as no one has raised the issue or for that matter any other building issue prior to the close of submissions the matter is therefore at an end. The matter can be raised at the next AGM in 2006 and the door can be repaired if necessary in the interim.

It is clear from this statement that the garage door is not about to be replaced imminently. On the basis of this information, no interim order is required in respect of this item.

In respect of the lift maintenance contract, the secretary states that:

This is not an issue as the matter was to be formally approved by the AGM anyway.

Again, it is clear that an interim order is not required.

For information proposes, I intend to briefly set out the interrelationship between sections 103 and 104 of the standard modules, particularly in respect of expenditures limits for committee and for the body corporate in general meeting.

Under section 103, the committee is authorised to resolve items of expenditure up to the "relevant limit for committee spending" which is $125 per lot, or $2250 in the case of this body corporate. Above this amount, all proposed items of expenditure must be approved by the body corporate in general meeting. There is a further relevant limit of expenditure. The limit for major spending under section 104 of the standard module is $250 per lot, or $4500 in the case of this body corporate. If expenditure exceeds this amount, then it requires a minimum of 2 quotes to be submitted to the body corporate in general meeting when it considers the proposal.
I note that in the case of the lift maintenance contract, the secretary has advised that the body committee has sought and obtained three quotes. Provided these, or at least 2 of these, are submitted with the proposal to the body corporate in general meeting, the resolution carried will be valid.

This leaves the relocation of the recycling bin as the next issue for consideration. At the committee meeting held on 25 September 2005, the minutes state that the committee resolved:

... decided that it would be best to arrange for the relocation of the recycling bins to a position against the northern fence to make it easier for them to be taken to the curb side for collection instead of having to be dragged up the driveway. A low fence will be erected with lattice and shrubs to hide them.

The applicant states that this decision was taken without regard to those owners residing in proximity to the new area allocated. The applicant believes the matter should be referred to the body corporate in general meeting. The applicant refers to the duty of the body corporate committee to administer the common property in the interests of all owners.

The committee submission refers to the above resolution with the words It was suggested. The word used in the minutes is decided so on the face of it, it appears to be a concluded decision, rather than a suggestion. Later, the secretary states:

This is actually a matter that is still in a state of flux and is not an issue where a decision has been set in concrete ...

Clearly, the committee has resiled from its earlier decision to site the recycle bins in the particular location. Given that the original decision is now not to be proceeded with, and the level of concern that this issue appears to have raised in certain quarters, I suggest that it is perhaps best that this issue is resolved by all owners in general meeting. Whilst the committee technically has jurisdiction in respect of such matter, I am aware from experience that the location of bins in a scheme can often become a matter of significant dispute. It is one of those issues which raises sensitivities.

Finally, the applicant refers to the permission given to owners on various floors to upgrade the décor in their lift lobby area and refers to section 114 of the module dealing with improvements to common property.

The secretary states that this matter arose in response to the Managers Report. It was noted that it was not necessary to spend money at this time as everything was still entirely functional. It was further suggested that:

Should individual floors wish to upgrade the décor of each particular level at their own expense that would be up to the three owners of that particular floor to come to an agreement as to the sharing of costs involved. ... Whilst still entirely functional it would benefit the building if owners on individual floors wished, at their expense and to professional standards in keeping with modern décor, upgraded the entire area. As can be seen to say to the three owners of a particular floor who have agreed to share the costs and have agreed on a colour scheme to do work in an area that is not visible to any other parts of the building to cause a clash, that they cannot do it because someone with no business on that floor wishes to impose their will on those owners possibly shows the pettiness of this whole complaint.

Subsequently, the secretary states we would appreciate your advice on this area.

I consider that the approach suggested or proposed by the secretary is fraught with difficulty and might very easily lead to dispute in respect of any number of matters. Firstly, the basics, the areas in question, the foyers servicing the 3 units on each floor, are common property.
It is the body corporate who has the duty to control, manage and administer common property. Excepting the grant or allocation of exclusive use of common property, there is no mechanism for a body corporate to divest itself of responsibility for common property.

Section 114 of the standard module refers to the making of improvements to common property for the benefit of a lot. It does not really contemplate the situation envisaged here. Rather, it is more apposite to the placing of an air conditioning condenser unit on common property which services an individual lot. That is, where one lot seeks to make an improvement to common property. The section contemplates a positive proposal coming from one lot and involving common property.

What is being contemplated here is to benefit all three lots simultaneously. This becomes part of the potential problem which might arise. As the renovation of foyers involves three units, it requires that three lot owners agree on the timing, standard of finish, colours, contractors, and any other number of possible variables which might be involved. What happens if one owner refuses on the basis that he / she is currently satisfied with the existing standard, whereas the other two want to redecorate their foyer.
Who is to decide whether or not the foyer should be redecorated. If an application were made here, I suggest it would be determined that as the area is common property, it is the body corporate who as a responsibility to maintain this area. This in turn would lead to problems involving other owners who have expended their individual funds on redecorating their floors, and might then be required to contribute to the redecoration of other foyers. This is only one of the problems or series of related problems I see might arise.

There is also the issue of uniformity of finish throughout the building. This is often an important concern of owners. There is also the issue of timing. Some foyers might be redecorated immediately, whilst others might not be done indefinitely. This in turn has potential implications.

I conclude that whilst section 114 is not directly relevant to this situation, the better view is that the foyer areas are common property in respect of which the body corporate should maintain control. Failure to do so in my view will lead to the possibility of significant dispute.

I have chosen to set out in these reasons my reasons for the making of the interim order because to a considerable extent, whilst considering only the requested interim orders, I did in fact canvass all aspects of the application. Further, it seems to me that some persons appear to have misunderstood the terms or intent of my interim order.

In particular, an owner by the name of GD and FJE Caton appears to believe that I will be making a determination in regard to a possible new location of the recycling bins. Perhaps this misunderstanding arose from correspondence by the body corporate manager, a Mr David Pak-Poy, to Mr G Caton dated 20 December 2005. In that correspondence, Mr Pak-Poy stated:

It has been bought to our attention that you are moving the recycle bins around to avoid any potential health problems. As you are aware this issue is before the Commissioner’s Office and an order is pending. Until that time, we are not to take action. Therefore, we duly advise that your actions in this matter, being contrary to the instructions of the Commissioner’s Office, must cease forthwith. ...

Based on what instructions from the Commissioner’s Office. On the basis of statements made in my reasons for the interim order, Mr Pak-Poy’s statements to Mr Caton are both incorrect and misleading. In the interim order, I stated that:

Clearly, the committee has resiled from its earlier decision to site the recycle bins in the particular location. Given that the original decision is now not to be proceeded with, and the level of concern that this issue appears to have raised in certain quarters, I suggest that it is perhaps best that this issue is resolved by all owners in general meeting. Whilst the committee technically has jurisdiction in respect of such matter, I am aware from experience that the location of bins in a scheme can often become a matter of significant dispute. It is one of those issues which raises sensitivities. (my highlighting)

Based on this statement, I suggest that the position regarding this matter, at least so far as the adjudication was concerned, was concluded with the making of the interim order. As I strongly suggested to the body corporate, including its committee, as the committee had now resiled from a decision to resite the recycle bins in a particular location, that the matter of bin location should now be resolved by all owners in general meeting.

My reasons should have left no party in any doubt that:

• no further determination would be made relative to this issue by me, the adjudicator; and
• the body corporate were now at liberty to proceed to both consider alternative locations for the bins, and having determined the most appropriate or possible locations, or other possible measures to be adopted, to have submitted the requisite motion or motions for inclusion on the agenda of the next general meeting so that the issue of location of the bins could be determined by the body corporate in general meeting.

In the circumstances, I intend to undertake no further consideration of this issue. It is not for me to determine where a body corporate should place its bins. Clearly this is an extremely practical issue, which simply needs to be managed to a successful resolution by the committee, in the manner suggested above. In the interim, there is nothing whatsoever to prevent the committee from making an interim determination to relocate the bins to a particular location so as to alleviate concerns raised by Mr Caton. Further, I suggest that the resident manager should immediately implement any directive of the committee in this regard so as to alleviate any alleged nuisance caused to Mr Caton from the present location of the bins.

I further consider that in the interim order, I fully explained or resolved (at least to the extent I considered necessary) three of the other four issues raised by the applicant, namely:

• The garage door issue;
• The lift maintenance contract issue; and
• The floor upgrade issue.

In the circumstances, I conclude that these are matters for consideration and determination in general meeting and I do not intend to elaborate or further consider these issues.

I consider the only outstanding issue to be the alleged invalidity of the committee meeting of 25 September 2005. In regard to this meeting, the applicant alleges that it "was not called and conducted in compliance of the BCCM Act Standard module Section 28 & 36(5) and contains decisions which could adversely affect all owners and/or individual owners". Specifically, the applicant alleges that:

• The notice of meeting was not forwarded to all owners (section 28(3)); and
• The minutes do not comply with section 36(5)(d/e/h/i).

This office sought submissions in respect of the application from the body corporate committee and all owners. The committee choose to respond to all issues in its submission to the interim order. Only two other owners, and the resident managers chose to respond to the notice inviting submissions. It is clear from material on the file that the resident managers are in dispute with the committee in regard to several matters, including some the subject of the application, and their submission supports the application and alleges that all committee meetings since October 2003 "have failed to meet the requirements of the Act". It has been alleged even that the application has been submitted by the applicant at the instigation of the resident managers. A reading of the minutes of the relevant meeting certain does not reflect well on the resident managers, and it is clear that they would have an interest in having the relevant meeting invalidated. In the circumstances, because of their being in dispute with the committee, I consider the submission of the resident managers to be unreliable in the determination of this application and I do not intend to consider it further.

The committee, in its submission, responds that "all owners have been notified of all committee meetings for a period of 18 months in advance of receipt of the minutes of the Committee meeting 15/5/05". I don’t understand this statement. Are owners notified in advance of bulk meetings? Clearly, this is not the intent of section 28 of the module. That section requires that notice be given "at least 7 days before the meeting".

The second allegation relates to "full and accurate minutes". The applicant alleges that the minutes are not "full and accurate" as required because of a failure of the minutes to include the following:
(d) the words of each question decided;
(e) the number of votes for and against each question decided; ...
(h) details of the next scheduled meeting;
(i) the secretary’s name and contact address.

Whether minutes of a meeting are full and accurate is a largely subjective concept I consider. It is easy to allege that certain details have not been included.

I have considered the minutes in question. I conclude that if anything, the minutes contain too much of the minutia of detail, which in a sense disguises the more relevant information. The minutes are written in a conversational somewhat rambling style, rather than say, having a formula where information is provided in point form, with consistent styling. I agree that it is at times difficult to decipher what was actually resolved from what was simply discussed or considered.

I suggest that there is room for improvement in the minute keeping by the committee. Perhaps the minutes should more accurately reflect the requirements set out for "full and accurate minutes" as per section 36(5) and that in future, the committee should pay greater attention to this aspect when both formulating and drafting minutes. However, I do consider that the alleged accuracy of minutes is a somewhat anomalous basis for invalidating a meeting. Minutes are a consequence of the meeting, rather than a factor affecting or influencing the meeting. To invalidate a meeting for the reason that minutes are alleges not to comply with requirements seems without valid basis. Rather, I suggest that the real sanction if owners believe that minutes are not accurate or do not correctly reflect the meeting, should be that owners in general meeting refuse by their vote to approve the minutes as true and accurate, and in the case of a committee meeting, that owners write to the secretary with concerns regarding the accuracy of the minutes.

I further consider that the applicant’s grounds for invalidation of the meeting lack detail. Adjudicators are not in the habit of invalidating meetings, be they general or committee, lightly. Meetings are the lifeblood of a body corporate. They are the means by which matters are transacted and approved. Consequently, the basis for alleged invalidity should be compelling, and not perhaps because someone has a beef with the committee. Moreover there should perhaps be evidence that failure to invalidate the meeting will result in some substantial injustice or inequity to a party. There is no such evidence here, or at least none which is alleged, so that it might be assessed. Whilst the applicant alleges that the consequence of the meeting could "adversely affect all owners and/or individual owners" he fails to elaborate what these adverse affects might be.

In the circumstances, I refuse to order the committee meeting invalid for the basis alleged. This basis does not provide a good and sufficient basis for invalidation. Certainly, there has been no groundswell in submissions of owners supporting the applicant’s call for invalidation. Rather, most other owners seems completely uninterested in the terms of this dispute, or more generally, the ongoing dispute seemingly occurring between the managers and the committee. In the circumstances, this application is dismissed in its entirely.