Paddington Boulevarde [2006] QBCCMCmr 200 (24 April 2006)

Number of Scheme:	8174
Name of Scheme:	Paddington Boulevarde
Address of Scheme:	283 Given Terrace Paddington QLD 8174

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

I hereby order that the resolution of the Committee passed on 4 February 2005 as referenced in paragraph 5.1 of the Minutes of the Committee Meeting was at all times void; and
the Body Corporate for Paddington Boulevarde pay to the Applicant the sum of $7,028 within one calendar month of the date of this decision; and
this application is otherwise dismissed.

STATEMENT OF ADJUDICATOR’S REASONS FOR DECISION - REF 0843-2005

"Paddington Boulevarde" CTS 8174

The application

The applicant, Pauline Goei Ming Fern, owner of lots 21, 46, 47 and 48 in the Paddington Boulevarde scheme has applied for the following orders:

Committee Resolution of No Effect

An order that the resolution of the Committee passed on 4 February 2005 and referred to in paragraph 5.1 of the Minutes of Committee Meeting is of no effect as this decision is a "restricted issue" under section 26 of the Standard Regulation Module.

Order for Payment by the Body Corporate

An order that the Body Corporate for Paddington Boulevarde CTS 8174 pay to the Applicant the sum of $7,028 in accordance with the resolution passed by the Body Corporate in general meeting on 23 December 2002 and referred to in paragraph 10 of the Minutes of the Annual General Meeting plus interest.

Further and other orders

Such further or other orders as may be deemed appropriate or necessary.

Section 276(1) of the Body Corporate and Community Management Act 1997 (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

(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 242 of the Act requires an applicant seeking to have a resolution of a committee declared void to make an application within three months of the date of the relevant committee meeting. There is the capacity under section 242(3)(b) of the Act for the assigned adjudicator to waive this compliance requirement for good reason.

The applicant has applied to have a resolution of the Padding Boulevarde Community Titles Scheme (Paddington Boulevarde) Committee declared void. The resolution was made at a Committee meeting held on 4 February 2005. The application was made on 25 November 2005. The applicant’s legal representative has provided information that for significant periods of 2005 the applicant was overseas and unable to properly attend to her affairs. The legal representative states that it was not engaged to pursue this matter and application until October 2005.
It appears from the information provided that the applicant left Brisbane for Singapore on 10 January 2005 and did not return to Brisbane until 16 August 2005. The applicant appears to have also been in Singapore from 6 September to 13 September 2005.

While the Committee met on 4 February 2005, a letter authored by the Body Corporate Manager communicating the resolution does not appear to have been sent to the applicant until 21 March 2005. This letter was subsequently re-sent to the applicant by facsimile on 21 April 2005. I have taken from these communications that the applicant was not informed of the Committee meeting’s resolution until 21 April 2005 – a period of 11 weeks after the date of the meeting. For this reason alone I would have considered waiving compliance with the ‘13-week’ timeframe set down in section 242 of the Act.

I have decided to waive compliance with the requirement of section 242 of the Act as I consider that an extended period of absence overseas and a consequently difficulty in pursuing domestic affairs is a good reason. I note that if 14 September 2005 (the day after the applicant’s return from her second trip to Singapore) is a provisional date from which the applicant was able to properly turn her attention to her domestic affairs, the lodging of the application on 25 November 2005 falls within three months of this date.

Paddington Boulevarde is a 73-lot Community Titles Scheme located along the commercial street of the suburb of Paddington. Lots 46, 47 and 48 are occupied and, at the time of lodgement of this application, were operating as a restaurant named "Paddington Café Boulevard". In December 2002 lot 47 was operating as a restaurant named "Nonna Pia".

At the Annual General Meeting for Paddington Boulevarde on 23 December 2002, a motion (Motion 9) was proposed by the Body Corporate Committee that approval be given to lot 47 to erect a shade structure on an exclusive use area of the common property. The motion was passed by "ordinary resolution" (see later discussion on this point).

An accompanying motion (Motion 10) was also proposed by the Committee and carried. This motion stated that, in the event Motion 9 was carried, the Body Corporate would make a 20% contribution to the new structures. It is significant that Motion 10 contained no conditions attaching to the contribution.

In the minutes of the Annual General Meeting notes are included with the record of these two motions which provide some background to the two motions. The notes appear to be authored by the Body Corporate Committee. These explanations include a recognition that the Body Corporate should be supportive of lot owners who wish to make a significant improvement to the front appearance of their tenancy provided that the resulting look is one the Committee believes enhances the building.

I do not consider these explanatory notes form part of Motion 10. The notes are enclosed in square brackets and are italicised, bolded and in a small font to the motion. While they appear to provide an explanation for why the Committee proposed the motion and may have even been a persuasive factor on the voting by the Body Corporate, I consider the Body Corporate did not vote of the notes but on the motions as stated.

A Certificate of Classification was issued for the structure in September 2005. However, the structure appears to have completed by August 2004 at which point the applicant approached the Body Corporate for payment of the promised 20% contribution – the sum of $7028.

By undated letter faxed to the applicant on 21 April 2005, the Body Corporate Manager for Paddington Boulevarde informed her that at the Committee meeting of 4 February 2005 it had resolved to pay the sum of $7028 to the applicant subject to two conditions; these being:

The applicant objects to the inclusion of these two conditions.

Motion 9

Lot 47 has an exclusive use area on the "boulevarde" of the Parcel. The exclusive use By-law in the Paddington Boulevarde’s Community Management Statement does not permit lot 47 to make improvements to the exclusive use area without the authorisation of the Body Corporate. Motion 9 was, quite properly, the mechanism through which lot 47 would obtain the authorisation of the Body Corporate to erect the shade structure on its exclusive use area.

The minutes state that Motion 9 was passed by "ordinary resolution". However, section 124(4) of the Body Corporate and Community Management (Standard Module) Regulation 1997 (the Standard Module) requires that when an improvement has a value of more than $250 it must be authorised by a "special resolution" of the Body Corporate. This requirement is a technical distinction only in this case as in the event, Motion 9 was passed without dissent. As such I provide this comment for the information of the Body Corporate only.

Restricted issue

The pledge of the 20% contribution was passed by the Body Corporate at its Annual General Meeting on 23 December 2002. The Minutes show the pledge was made unconditionally. Section 58 of the Standard Module provides the capacity to amend (or revoke) a resolution passed at a general meeting. In summary, section 58 states a passed resolution can only be amended by a similar resolution to that under which it was passed. In this case, there is no evidence before me that an amending or revoking motion concerning Motion 10 has been passed by a resolution at a subsequent general meeting of the Body Corporate.

While generally a decision of the Committee is a decision of the Body Corporate (section 100(1) of the Act) this authority is qualified by exempting decisions on "restricted issues" that are set out in the relevant regulation module (section 100(2) of the Act).

In this case the applicable section is 26 of the Standard Module; the relevant extracts of this section state:

26 Restricted issues for committee--Act, s 100

(1) A decision is a decision on a restricted issue for the committee if it is a decision--

(a) ..

The applicant seeks to rely on section 26(1)(b) of the Standard Module contending that the Committee’s resolution at its meeting of 4 February 2005 is a decision on a restricted issue because it has changed a right or privilege afforded to her. The applicant seeks an order that as such, the Committee’s resolution should be declared void.

The crux of the applicant’s argument is that the pledge of the 20% contribution by the Body Corporate has granted her a "right" or a "privilege". The applicant has an arguable point. I have noted that a definition of "privilege" in the New Short Oxford English Dictionary (1993, Volume 2, page 2360) is "a right, advantage or immunity granted to or enjoyed by a person or a class of people, beyond the usual rights or advantages of others."

However, I have declined to make my decision on this basis. I have instead relied on section 26(1)(d) of the Standard Module for the reason that I consider it directly on point for this case. Motion 10 is clear on its face – as Motion 9 was carried, the Body Corporate unconditionally pledged to provide the applicant with a 20% contribution towards the construction costs of the shade structure. I consider the imposition of conditions by the Committee in its meeting of 4 February 2005 constitutes an amendment of Motion 10 which can only be validly affected through a resolution of the Body Corporate at a general meeting.

The Chair of the Committee has provided a submission giving reasons for the imposition of the two conditions on the payment to the applicant of the 20% contribution. The first reason is that the payment was seen by the Committee as an opportunity for leverage to be applied to have the shade structure built strictly in accordance with the plan approved by the Body Corporate at the Extra-ordinary General Meeting on 6 May 2004. There is dispute between the parties as to whether the differences between the proposed structure and the finished structure were subsequently approved by the Committee.

I do not consider this dispute is relevant to the obligation of the Body Corporate to fulfil its pledge of 23 December 2002. Motion 9 appears to be no more than in-principle approval for the applicant to erect a shade structure on the exclusive use area which at this point in time consisted of nothing more than a "draft sketch proposal of the approximate locations and details".

However, what is relevant is that on 4 February 2005 the Committee resolved to impose conditions on the earlier pledge because of events occurring after May 2004. These events do not appear to have been contemplated to any significant degree in December 2002 when Motions 9 and 10 were passed. Had this issue been of concern then, it was open for the Committee, particularly as they were the proposers of Motions 9 and 10, to include the conditions as part of the motions.

The second reason provided in the submission is that it is "common sense" that if the shade structure is no longer appropriate to the uses of lots 46, 47 and 48 that the Body Corporate’s contribution be re-paid by the applicant. The minutes of the Committee Meeting of 4 February 2005 record the Committee’s view that the ‘contribution arrangement’ had not met original expectations and was a financial burden. I make no comment on Committee’s view save that if the condition makes commonsense in February 2005 it would have similarly made commonsense in December 2002. The Committee could have included in its proposed Motion 10 a condition attaching to the 20% contribution that it considered to be commonsense. It is arguably an error that the Committee did not do so at the time; however, there is no authority in the legislation for the Committee to retrospectively correct that error.

I have concluded that the resolution of the Committee of 4 February 2005 is an attempt by the Committee to re-draft Motions 9 and 10 with the benefit of hind-sight gained through subsequent experience. The Act and Standard Module do not permit the Committee this revision. I consider the resolution of the Committee on 4 February 2005 to impose conditions on the payment of the 20% contribution is accordingly, a "decision on a restricted issue" and I have ordered that it was at all times void.

This case reinforces the importance of taking care when writing motions. Once passed at a general meeting it is the motion itself that is the subject of further action, rather than any considerations behind the motion. While there is the capacity under section 58 of the Standard Module for the Body Corporate to amend or revoke an earlier passed resolution, it may be the case, as here, that in the interim parties have acted in reliance of that resolution.

Payment

Following on from my above order, there is no impediment to the Body Corporate paying to the applicant the 20% contribution that was pledged through Motion 10. There is no dispute between the parties as to the amount of the contribution. Accordingly, I have ordered that the Body Corporate pay to the applicant the sum of $7028.

The applicant has applied for an order that she also be paid a sum of interest. The orders an adjudicator can make are set out in section 276, 281 and Schedule 5 of the Act. There is no express power in these sections and schedule to order a Body Corporate to pay interest on outstanding monies owed to owners. To grant this order reliance must be placed on the general power in sections 276(1) of the Act to make a "just and equitable" order to resolve a dispute.

I am not persuaded that the payment of interest does go the resolution of the dispute between the applicant and Body Corporate. Rather, I consider it goes to the remediation of the ‘damage’ suffered by the applicant. I am of the opinion that this ‘damage’ cannot be sheeted wholly to the Body Corporate. The Committee had set down conditions under which it was prepared to pay the 20% contribution to the applicant and was awaiting a response from her. I have accepted that due to the applicant’s extended periods overseas in 2005, she was not able to properly attend to her affairs. This necessarily delayed the applicant’s challenge of the Committee’s resolution. While of course, this implies no fault on the part of the applicant, I consider that neither can it assign to the Body Corporate a sole responsibility for the payment being outstanding.

The lack of particularity from the applicant on the issue of interest is another factor I considered in deciding this issue. No interest rate is claimed, nor is there detail on when a liability for interest should have commenced. I have noted that applicant’s legal representative’s letter to the Body Corporate dated 4 November 2005 proposes the applicant "will begin charging interest on the current default rate of judgements being 9%." While this rate is referenced to default judgements of the Magistrate’s Court, I would not consider it appropriate to this jurisdiction, particularly given that the Consumer Price Index (CPI) for the year ending December 2005 was 2.8% (figure obtained from the Reserve Bank of Australia on 20 April 2006). In any event, the proposal in the legal representative’s letter was not carried over to the orders the applicant sought of me.

For the above reasons I have declined to order a payment of interest in this matter. I am however, mindful of the benefits of bringing closure to this issue. It has now been over three years since the Body Corporate pledged this contribution and I would consequently order that the monies be paid within a relatively short timeframe. Accordingly, I have ordered the Body Corporate to pay the sum of $7028 to the applicant within one calendar month of the date of my order.

•	Amend the structure to comply with the original design submitted to and approved by the Body Corporate in May 2004.
•	In the event that the applicant’s three lots revert back to retail tenancies, the applicant must agree to replace the shade structure with structures of the Committee’s satisfaction or pay back to the Body Corporate the contribution monies.

Queensland Body Corporate and Community Management Commissioner - Adjudicators Orders

Paddington Boulevarde [2006] QBCCMCmr 200 (24 April 2006)