Park Avenue at South Bank [2006] QBCCMCmr 31 (23 January 2006)

Last Updated: 19 July 2006

REFERENCE: 0700-2005

ORDER OF A REFEREE

MADE UNDER PART V OF

BUILDING UNITS AND GROUP TITLES ACT 1980

Name of Scheme:	Park Avenue at South Bank
Address of Scheme:	410 Stanley Street SOUTH BRISBANE QLD 4101

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

the Body Corporate for Park Avenue at South Bank

I hereby order that the application by the Body Corporate for Park Avenue for an order of a Referee under the Building Units and Group Titles Act 1980, to overturn one (1) "against vote for motions 2 and 3 at the EGM held 6th September, 2005 so that this motion requiring resolution "without dissent" is resolved in the affirmative, is approved. I further order that motions 2 and 3 considered by the body corporate at the EGM held on 6th September 2005 being headed Replacement of Common Area Foyer Carpets (13 Levels) and Repainting of common area foyers respectively (the motions) are deemed to have been carried on the basis that the motions required only ordinary resolutions and not resolutions without dissent as stated in the relevant materials. I further order that the motions may be implemented as if they had been duly carried at the meeting.

STATEMENT OF REFEREE’S REASONS FOR DECISION - REF 0700-2005

"Park Avenue at South Bank"

The applicant, the body corporate of Park Avenue at South Bank, has sought the following order of a Referee under section 77(1) of Schedule 7 of the South Bank Corporation Act 1989 (the Act), quote –

To overturn one (1) "against vote for motions 2 and 3 at the EGM held 6^th September, 2005 so that this motion requiring resolution "without dissent" is resolved in the affirmative or alternatively, determine that this motion should be dealt with as a motion subject to a special resolution and as such, is passed in the affirmative.

Sections 77 and 78 of Schedule 7 of the Act provides

77 (1) General powers of referee to make orders
(1) A referee may, pursuant to an application of a body corporate, a body corporate manager, a proprietor, a person having an estate or interest in a lot or an occupier of a lot in respect of a parcel, make an order on any person entitled to make an application under this subsection or on the chairperson, secretary or treasurer of the body corporate for the settlement of a dispute, or the rectification of a complaint, with respect to the exercise
or performance of, or the failure to exercise or perform, a power, authority, duty or function conferred or imposed by this Act in connection with that parcel.
(2) Where a body corporate has a discretion as to whether or not it exercises or performs a power, authority, duty or function conferred or imposed on it by this Act, it shall be deemed to have refused or failed to exercise or perform that power, authority, duty or function only if it has decided not to exercise or perform that power, authority, duty or function.
(3) Nothing in this part authorises the referee to make an order of the kind that may be made by the Court under section 25 or 26.
(4) Nothing in this part affects the generality of subsection (1), but an order in respect of any matter dealt with in any other section of this part shall not be made under this section.

78 Further powers of referee
(1) A referee is empowered to make an order that--
(a) requires a party to the dispute before the referee to pay money not exceeding the sum of $1 000 to a person specified in the order;
(b) requires a party to the dispute before the referee to do, or refrain from doing, some specified act to which the application relates;
(c) strikes out for want of jurisdiction the dispute before the referee.
(2) An order made by a referee may direct that the order shall be complied with within a time limited in the order.
(3) An order made by a referee that requires the payment of money may be made to take effect instanter or so as to take effect upon default being made in complying with some other order made by the referee.

Motions 2 and 3 relate to recarpeting and repainting of the common area lift foyers, and are considered by the body corporate to be part of the "continuing repairs and maintenance program for the building". Sufficient sinking fund monies exist to "implement the maintenance". There were 31 votes in favour and 1 vote against the proposals. As the motions were described as resolutions without dissent, the motions were declared lost. This application seeks to overturn the dissenting vote, and to have the motions in question declared carried, and able to be implemented.

The owners who dissented to the vote on the motions were Robert Schweizer and Christa Schweizer (the respondents). The respondents have made a submission in respect of the application. That submission states relevantly:

As a unit owner we understand we generally have the right to vote yes or no on motions whether it is an ordinary motion or one without dissent and where the expense may or may not exceed a specified amount which determines if the moiton must be called without dissent. Each unit owner has the right to agree or disagree how the money in the sinking fun is being used.

As the owners of unit 11, we inspected the carpets and walls on different levels at Park Avenue Apartments and we do not feel that the carpets need to be replaced and the walls repainted for another two to three years. ...

I note there have also been submissions received from 4 other owners indicating support for the body corporate’s position and expressing the view that the stated maintence is currently or presently required. One further submission indicates support for "the majority view", although stating that the support is not out of "material necessity in the building".

I note that in the application, the body coprorate has sought in the alternative that the motions be re-categorised as "special resolutions". My question is why the motions should even be categorised as special resolutions. The resolutions deal with maintenance of common property and not improvements to common property. Both concepts are dealt with under section 37(1) of Schedule 7 of the Act, which provides:

37 Duties and powers of body corporate regarding property etc.

(1) A body corporate shall--
(a) control, manage and administer the common property for the benefit of the lessees; and
(b) where reasonably practicable, establish and maintain suitable lawns and gardens on the common property; and
(c) subject to section 37A, properly maintain and keep in a state of good and serviceable repair (including, where reasonably necessary, renew or replace the whole or part of the common property)--
(i) the common property; and
(ii) any fixture or fitting (including any pipe, pole, wire, cable or duct) comprised on the common property or within any wall, floor or ceiling the centre of which forms a boundary of a lot; and
(iii) any fixture or fitting (including any pipe, pole, wire, cable or duct) which is comprised within a lot and which is intended to be used for the servicing or enjoyment of any other lot or of the common property; and
(iv) each door, window and other permanent cover over openings in walls where a side of the door, window or cover is part of the common property; and
(v) any personal property vested in the body corporate; and
(d) cause to be constructed and maintained at an appropriate place within the parcel, accessible by the lessees a receptacle suitable for the receipt of mail and other
documents with the name of the body corporate clearly shown on the receptacle.
(amended)
(2) A body corporate may--
(a) enter into an agreement, upon such terms and conditions (including terms for the payment of consideration) as may be agreed upon by the parties, with a lessee or
occupier of a lot for the provision of amenities or services by it to the lot or to the lessee or occupier; and
(b) acquire and hold any personal property; and
(d) enter into hiring agreements and leasing agreements; and
(e) accept or acquire a lease, licence or permit for the purposes of providing moorings for vessels; and
(f) make or cause to be made improvements to the common property where--
(i) in any 1 case, the cost of the improvements does not exceed the prescribed amount; or
(ii) the body corporate by resolution without dissent so resolves; or
(iii) the body corporate resolves in general meeting that the improvements are considered to be essential for the health, safety or security of users of the common property and the referee makes an order approving the making of the improvements.
(amended)
(2A) In subsection (2)(f)(i)--
prescribed amount means the amount prescribed under the Building Units and Group Titles Act, section 37(2)(g)(i).
(new)
(3) (not applied)
(4) (not applied)

Whilst it is not specifically or clearly set out in the section, the maintenance of common property is to be contrasted with the improvement to common property. I agree that improvements to common property will normally require a resolution without dissent, however in the case of maintenance, only an ordinary resolution is required. This was always the position under the Building Units and Group Titles Act 1980, the legislation from which the relevant provisions in the South Bank Corporate Act 1989 were crafted.

I conclude that as the subject of the resolutions was maintenance of common property, rather than improvements to common property, that the motions required only resolutions without dissent in order to be carried. In the circumstances, I intend to declare that the motions in question are deemed to have been carried, and might now be implemented.