Kensington Gardens Retirement Village [2006] QBCCMCmr 239 (12 May 2006)

Last Updated: 19 December 2006

REFERENCE: 0030-2006

ORDER OF AN ADJUDICATOR

MADE UNDER PART 9 OF CHAPTER 6

BODY CORPORATE AND COMMUNITY MANAGEMENT ACT 1997

Number of Scheme:	30198
Name of Scheme:	Kensington Gardens Retirement Village
Address of Scheme:	45 Glen Kyle Drive BUDERIM QLD 4556

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

Carole Suzanne Livingston-Cohen, the owner of lot 20

I hereby order that the application by Carole Suzanne Livingston-Cohen, the owner of lot 20 for an order that the committee be directed to fund the antennae proposal by a levy on 69 residents (who will benefit from the installation of the new antenna), is dismissed.

STATEMENT OF ADJUDICATOR’S REASONS FOR DECISION - REF 0030-2006

"Kensington Gardens Retirement Village" CTS 30198

The applicant, Carole Suzanne Livingston-Cohen, the owner of lot 20, has sought the following order of an adjudicator under the Body Corporate and Community Management Act 1997 (the Act) quote:

The funding of unbudgeted new capital work from the sinking fund would lead to a shortfall in these funds in the future. I therefore ask that the committee be directed to fund this project by a levy on the 69 residents who will benefit from the installation of the new antenna.

The applicant also sought an interim order of "that until the matter of funding is determined, all work on the installation of a new TV Antenna cease". On the 27^th January, 2006, the requested interim order was dismissed.

As the installation of a new antenna system will only benefit 69 of the 80 residents in the village I ask that the committee be directed to fund this project by a levy on the residents who will benefit from the antenna.

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 80 lots. The regulation module applying to the scheme is the standard module.

In her grounds, the applicant states:

... the committee resolved on 11 November 2005 to spend $10,000 "for the installation of a new TV antenna for the village". The applicant further alleges that the proposal is to be funded as "an item of repair not as new capital works and the money come from the sinking fund". The applicant believes that "this project is an item of new works that only provides a service to 69 of the 80 units and as such should be funded by a levy on those 69 residents only. ...

Finally, the applicant contends that if the spending from the sinking fund is made "it will in the future leave the sinking fund below the amount forecast for repairs and maintenance and as such should not be allowed to proceed in the manner proposed".

In the interim order, I noted the committee’s response to the above allegations:

... The body corporate submission notes "some anomalies within (the applicant’s) submission". In particular, the committee points out that the project will be funded from the administrative fund and not the sinking fund. The committee further states that, at the relevant meeting, it agreed to "proceed with a program to update and repair the existing communal antenna system following many complaints from residents of constant poor reception within the village".

Further, the committee submission notes that the:

• The expenditure is within the committee’s expenditure limit;
• The committee did not receive a notice of opposition;
• The applicant "has not (made) any attempt to question or clarify the true situation".

In the statement of reasons for my interim order, I concluded as follows:

In the circumstances, I intend to dismiss the application for an interim order. The applicant has failed to outline a prima facie case, or even to provide evidence on relevant aspects. In particular, why the project relates to only 69 of the 80 lots. Moreover, the allegation of "new work" rather than repair is challenged. The committee’s material suggests that the reason for the work is poor reception generally in the complex. This suggests that the work is both maintenance, and secondly, that it is generally for the benefit of all owners, and not a particular group of those owners. Further, it is clear that the work is being funded from administrative fund monies and not the sinking fund as alleged.

Determination

The applicant’s grounds do not assist her position. As noted in the interim order, those grounds fail to elaborate the basis of the applicant’s belief that the work proposed only provides a service to 69 of the 80 lots, or that the work is new work. Whilst adjudicators have an obligation to investigate an application, I consider it a reasonable expectation that an applicant will seek to substantiate allegations or statements made which are not themselves self evident. Such requirement should be reasonably apparent in my view. To not do so is potentially a denial of natural justice (procedural fairness) in that other parties to an application are entitled to be informed of, and to understand the basis of the case against them.

I do have the benefit of a number of submissions from owners in response to the application. The contents of those submissions do help somewhat to clarify issues which the applicant has raised.

I am satisfied that the proposed expenditure is within the committee’s expenditure limit, which is $10,000. Provided the expenditure does not exceed this amount, then the committee are entitled to resolve to undertake the proposed works. Further, I am satisfied that the expenditure is to be taken from the administrative rather than the sinking fund, and that the applicant is incorrect on this aspect. It is appropriate that routine or on going maintenance is funded from the administrative fund. The applicant’s statement that the expenditure will:

... in the future leave the sinking fund below the amount forecast for repairs and maintenance and as such should not be allowed to proceed in the manner proposed

is contradicted by the statement that:

A comprehensive financial saving off this year’s Garden Maintenance costs compared to last year, should amply fund this project.

Certainly, the applicant has not provided any evidence to indicate that the expenditure will leave a shortfall in the administrative fund.
I intend to now consider what appears to be the two principal issues of concern to the applicant.

The first is the allegation that the proposal is for "unbudgeted new capital work". The applicant refers to the installation of "a new antenna system". The committee submission denies this and refers to "a program to update and repair the existing communal antenna system following many complaints from residents of constant poor reception within the village". The consensus of opinion in submissions appears to confirm the committee view that the proposal is not new work. One owner states:

The committee’s proposal is for modifications, repairs, or improvements to a defective, existing service, installed by the developer and not new work.

Based on available information, I am unable to conclude that the committee proposal involves "new work", and not a maintenance of an existing installation.

Finally, the applicant submits that the installation "will only benefit 69 of the 80 residents in the village" and should be funded "by a levy on the residents who will benefit". As I understand the situation, the 11 lots the applicant believes should be exempted are the 11 lots in stage 1. The remaining 69 lots are in stages 2 to 6 of the scheme. Apparently, a different antennae system was installed in stage 1 to stages 2 to 6. I am further informed that reception in stage 1 is good or at least not in need of improvement, whereas stages 2 to 6 do not enjoy equivalently good reception. As I understand the proposal, the intent is to improve the reception for stages 2 to 6 so that it is at least comparable with stage 1.

There is no doubt that the antennae systems comprised in the scheme are part of the common property of the scheme on the basis that the systems are utility infrastructure providing a utility service to lots. Section 20 of the Act deems such utility infrastructure to be common property. Given this, what basis can there be for owners not contributing in accordance with the lot entitlements contributions schedule to the maintenance of common property. There is no basis for the applicant’s proposal. The only situation where owners who receive the benefit of a service provided by the body corporate are required to pay for the provision of that service commensurate with the cost to the body corporate of supplying that service to the owners who request the service, is as outlined in section 119 of the standard module. The relevant section provides:

119 Supply of services by body corporate--Act, s 158
(1) The body corporate may supply, or engage another person to supply, utility services and other services for the benefit of owners and occupiers of lots, if the services consist of 1 or more of the following--
(a) maintenance services, which may include cleaning, repairing, painting, pest prevention or extermination or mowing;
(b) communication services, which may include the installation and supply of telephone, intercom, computer data or television;
(c) domestic services, which may include electricity, gas, water, garbage removal, airconditioning or heating.
Example-- The body corporate might engage a corporation to supply PABX services for the benefit of the owners and occupiers of lots.
(2) The body corporate may, by agreement with a person for whom services are supplied, charge for the services (including for the installation of, and the maintenance and other operating costs associated with, utility infrastructure for the services), but only to the extent necessary for reimbursing the body corporate for supplying the services.43
(3) In acting under subsections (1) and (2), the body corporate must, to the greatest practicable extent, ensure the total cost to the body corporate (other than body corporate administrative costs) for supplying a service, including the cost of a commercial service, and the cost of purchasing,
operating, maintaining and replacing any equipment, is recovered from the users of the service.

The provisions of this section are not applicable to the current scenario. The works proposed will improve the quality of reception to all lots in stages 2 to 6. It will not be limited to those owners who have made a specific request for improvement. In this way, the proposed work is more reflective of maintenance of common property rather than the provision of a service.

In the circumstances, there is no merit in the applicant’s submission that the cost of the proposed work should be borne by the owners of 69 of the 80 lots. For the reasons stated, this application is dismissed.