Carrington Court - Main Beach [2006] QBCCMCmr 24 (18 January 2006)

Number of Scheme:	10447
Name of Scheme:	Carrington Court - Main Beach
Address of Scheme:	3576 Main Beach Parade MAIN BEACH QLD 4217

TAKE NOTICE that pursuant to an application made under the abovementioned Act by Jason Uhlmann, a committee member, against the the Body Corporate of Carrington Court

I hereby order that the resolution of the body corporate of Carrington Court purportedly carried at the AGM held on Saturday 25 June 2005 and headed Documentation of all proposed works – Tenders, is invalid and of no effect on the basis that it is void for uncertainty.

I further order that the minutes of the AGM in question shall be amended to state that notwithstanding that the resolution was purported carried, that by order of an adjudicator, the resolution is invalid and of no effect, and a copy of this order shall be included with the relevant minutes of meeting, and form part of the body corporate records.

STATEMENT OF ADJUDICATOR’S REASONS FOR DECISION - REF 0680-2005

"Carrington Court - Main Beach" CTS 10447

The applicant, Jason Uhlmann, a committee member has sought the following order of an adjudicator under the Body Corporate and Community Management Act 1997 (the Act) quote:

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

(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 41 lots recorded under a building unit plan (now a building format plan) of subdivision. The regulation module applying to the scheme is the standard module. This office sought submissions from all owners in the scheme and the body corporate committee. In response, only one submission was received from an owner: a Mr C H Beesley (Beesley). I understand Beesley was the proposer of the motion the subject of the application. Beesley’s submission opposes the application and is in support of the validity of the motion or resolution.

The resolution the validity of which is in question was headed Documentation of all proposed works – Tenders. The resolution provided:

The resolution was carried at the AGM held on 25 June 2005 by a yes vote of 21, with a no vote of 12 against the motion.

The applicant alleges that the resolution is void for a number of reasons. In turn, Beesley has responded to each of these allegations, and the applicant has replied to Beesley’s submission. Whilst I do not intend to deal with each of these allegations individually, they include allegations that the resolution restricts the committee in the performance of its functions, is "unreasonable and unworkable", conflicts with the statutory provisions, and is "unnecessarily restrictive".

This is a difficult application to determine. The allegations as to the invalidity and / or the validity of the resolution are subjective. The chairperson of a body corporate has jurisdiction to rule a motion out of order under section 47 of the standard module. That section provides:

47 Power of person chairing meeting to rule motion out of order
(1) The person chairing a general meeting of the body corporate must rule a motion out of order if--
(a) the motion, if carried, would--
(i) conflict with the Act, this regulation or the by-laws, or a motion already voted on at the meeting; or
(ii) be unlawful or unenforceable for another reason; or
(b) except for a procedural motion for the conduct of the meeting, or a motion to correct minutes--the substance of the motion was not included in the agenda for the meeting.

Clearly, the chairperson did not determine to rule the motion out of order at the meeting. Section 101 of the Act states that the committee must put into effect the lawful decisions of the body corporate. This section obliges the committee to implement "lawful decisions of the body corporate". Provided the decision is lawful, it must be implemented. What is intended by the word "lawful":

I have difficulty in understanding the intention the resolution. I consider it ambiguous in several respects. I consider that implementation of the resolution raises potentially more questions then it answers. For example, is the resolution to apply only to proposed works of the body corporate (that is, maintenance or improvement of common property) or are the requirements of the resolution to apply to any works proposed either by the body corporate, or by an individual owner (eg. a proposed improvement to the lot). If it is the latter, then I consider it very doubtful that the body corporate is able to instruct an owner how works proposed by that owner should be:

This ambiguity might have been avoided by the simple addition of the words "all works proposed by the body corporate", assuming that the requirements of the resolution were only intended to apply to works proposed by the body corporate, and not owners also. I further consider that the resolution is poorly constructed grammatically. For example, the first sentence might have read:

Even having rephrased the statement to make it to my mind at least more straightforward, I am nevertheless still not certain that this rewording expresses Beesley’s intended meaning.

Also, I wonder why the governing criteria of the specification is that any body corporate member might submit a tender. In my experience, the number of members of a body corporate who choose to tender for works proposed by a body corporate is so miniscule as to be an irrelevant consideration. Is Beesley promoting the carrying out of works by body corporate members in preference to outside contractors? Whilst Beesley refers often to aspects of accountability in the tender process, I suggest in-house tendering is fraught with conflict of interest considerations. What I am saying is that I am, to some extent at least, failing to appreciate the intent of the resolution even from a practical or common sense perspective.

The resolution contains several distinct concepts, including:

Each of these distinct concepts involves potentially different entities. This is to be contrasted with a situation where there might be four distinct conditions to be satisfied, but the obligation to satisfy the conditions relates to a single party or entity. The resolution is to be contrasted with this in that it includes several conditions, each to be fulfilled or satisfied by different parties. This aspect alone renders implementation of the resolution far more complex.

What is the purpose of the statement that body corporate members approve the works? Surely this aspect is dealt with sufficiently in the legislation, which is mandatory and cannot be contracted out of. The applicant alleges that this restricts the ability of the committee to perform its functions. Beesley denies this and states that "a decision of the committee is a decision of the body corporate unless it is a restricted issue for the committee ...". Beesley however misses or ignores the relevant point in my view. The resolution states "Body Corporate members". The only interpretation I have of this expression is all owners in general meeting. I conclude the resolution precludes determination of issues by the committee. Clearly this is contrary to the legislation, given the committee’s clear role and decision making powers under the legislation. Perhaps my interpretation of the resolution is not how Beesley intended that it be interpreted. However, I consider that the construction of the resolution and poor use of language is such that it leads to ambiguities in interpretation and possibly unintended interpretations.

What level of "proposed works" is the resolution intended to apply to? The resolution states "all". Does this mean that, for example, the replacement of a single door (the responsibility of the body corporate to maintain) at an approximate cost of say $450 is "proposed works" for which:

The requirements of the resolution are clearly beyond the requirements of the contemplated work. Would the committee be at liberty to ignore the requirements of the resolution in instances like this. If so, then what is the demarcation line beyond which the requirements of the resolution are to be applied. How could a committee be expected to proceed with any certainty on this aspect. This aspect in itself might have been clarified by the reference to "All proposed work by the body corporate beyond the relevant limit for major spending should ..." Again I consider the drafting of the resolution on this aspect to be poor, and contributes to the complete ambiguity of the resolution.

In particular, if the ambiguity related to a single aspect of the resolution, then it might be possible to divine the intended meaning from other aspects which were certain. However, if as I consider is the case here, the resolution is littered with ambiguities, then this compounds the difficulty of not only interpreting but also implementing the resolution.

What of the requirement that only lump sum contracts be considered? This aspect is clear. What if contractors for a plumbing job which required investigation and diagnosis before any firm quote might be given refused to provide a lump sum quote. Another example of where a lump sum contract might not be forthcoming is the instance of termite infestation. Perhaps a contractor quoting on repairs might similarly refuse to quote on a lump sum basis, for the reason that during the course of undertaking the works, further required work was revealed. In the circumstances, I conclude that lump sum contracts might not be possible in every or even most instances. What is the committee or body corporate to do if lump sum quotes are not forthcoming?

I am a lawyer with some 12 years experience in body corporate matters. I cannot ascribe clear meaning to the resolution. I can find significant ambiguity in almost every aspect. The resolution is open to a several differing interpretations. Given that a committee must implement lawful decisions of the body corporate, I consider that the committee of this body corporate would be placed in an extremely difficult position: to be required to apply to each instance of proposed work the several requirements of a resolution which are uncertain. I suggest that practically, the resolution would prove almost impossible to implement.

In the circumstances, I intend to invalidate the resolution on the basis that it is void for uncertainty. This is not to say that certain aspects dealt with in the resolution are not capable of being applied to maintenance or improvement issues affecting the body corporate. However, I conclude that considerably more thought needs be applied to this issue, and that any future resolution need be drafted in such a way as to reduce ambiguity and to enhance clarity. Further, perhaps the concepts need to be separated to, for example, headings like:

Queensland Body Corporate and Community Management Commissioner - Adjudicators Orders

Carrington Court - Main Beach [2006] QBCCMCmr 24 (18 January 2006)