Cambridge on the Hill [2006] QBCCMCmr 409 (31 July 2006)

Number of Scheme:	1957
Name of Scheme:	Cambridge on the Hill
Address of Scheme:	110 Musgrave Road REDHILL QLD 4059

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

I hereby declare that there was no authorization for the spending of a total of $5,150 for the clearing and re-planting of the lower Western garden.

I hereby order that this application is otherwise dismissed.

STATEMENT OF ADJUDICATOR’S REASONS FOR DECISION - REF 0211-2006

"Cambridge on the Hill" CTS 1957

Scheme

"Cambridge on the Hill" was registered as a building units (now known as building format) plan of subdivision on 14 April 1994 comprising 28 lots and common property. It is regulated by the Body Corporate and Community Management (Standard Module) Regulation 1997 (the Standard Module).

Application

This application is brought by the owner of lot 25, Mark Philip Huxley (the applicant), against the body corporate, seeking the following two orders:

Submissions in response to the application were sought from all owners (excluding the applicant) and the committee. Four submissions were received. Of these, one concurred with the applicant and three opposed the making of the orders sought. In her defence, the chairperson submits that the work comprised two separate proposals (one to remove all potentially hazardous vegetation and the other to refurbish the ground cover) and was undertaken in good faith, observing due diligence regarding the integrity of property and residents associated with Cambridge on the Hill. She states that all expenditure was appropriately approved by committee members. She further submits that the work constituted an urgent maintenance activity.

The applicant exercised his right to inspect the submissions made and replied to them. The applicant refutes the content of the chairperson’s submission and states that the other submissions made against his application were from investment owners who do not reside in the complex and do not have the full understanding of the situation. In particular, the applicant refutes the chairperson’s claim that the work was authorised by the committee. He states that the work was never voted on at a committee or general meeting. The submission by the former secretary supports this view.

Jurisdiction

This is a dispute which falls within the dispute resolution provisions of the Act.^[1]

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)).

Determination

The subject matter of this dispute was discussed at a committee meeting on 30 November 2005. The minutes of that meeting (which the applicant alleges were not sent to owners until the start of February 2006) record as follows:

The Chair requested a quote from Gardens by Jemma to clear the gardening rubbish from the western side of the Cambridge Street block. Energex had been approached for 18 months to cut back the bougainvillea from the power pole and the main feeder pole and lines which supply the complex but Energex had failed to do so. Tree branches were across the incoming power lines and it was considered expedient to remove all overhanging rubbish prior to the storm season. The Chair had also received a number of complaints about vermin during 2005. A quote for $5,150.00 from Gardens by Jemma to refurbish the lower western garden was tabled at the meeting.

The Body Corporate Manager advised the Committee that this amount was beyond the Committee’s expenditure limits and needs approval at general meeting level. The Committee therefore will consider having the quote split into its various components and be undertaken on that basis. The Body Corporate Manager however, cautioned that the Act specifically stated in Section 103(2) that "if a series of proposals forms a single project, the cost of carrying out any 1 of the proposals is taken to be more than the relevant limit for committee spending if the cost of the project, as a whole, is more than the relevant limit".

The Chair felt that any loss of power to the units would not be in the interests of residents as the B/C Committee has a duty of care to all residents.

The minutes of this meeting were confirmed at a subsequent committee meeting held on 14 February 2006, with only two committee members present.

It appears that the version of the minutes distributed to owners and confirmed at the committee meeting held on 14 February 2006, differed from the draft prepared by the body corporate manager and emailed to the chairperson and former secretary on 21 December 2005. In relation to the "Clean Up on Western Side", the original version of the minutes (submitted by the former secretary) recorded as follows:

A quote for $5,150.00 from gardens by jemma to refurbish the lower western garden was tabled at the meeting.

The body corporate manger advised the Committee that this amount was beyond the committee’s expenditure limits and needs approval at general meeting level. The Committee therefore will consider having the quote split into its various components and be undertaken on that basis. The body corporate manger however, cautioned that the Act specifically stated in Section 103(2) that "if a series of proposals forms a single project, the cost of carrying out any 1 of the proposals is taken to be more than the relevant limit for committee spending if the cost of the project, as a whole, is more than the relevant limit.

Therefore it was agreed that the committee further address refurbishment of the western side between Unit 5 and Unit 10 and also consider allowing for a BBQ in the area.

In her submission, the former secretary (who was present at the meeting held on 30 November 2005) states that no vote was taken on the issue and that it was her understanding that the issue would be considered at the AGM due to the cost involved and to allow all owners to be given an opportunity to vote in the matter. The former secretary states in her submission that she resigned from her position as secretary because of this situation.

A number of things concern me about the way the body corporate handled this matter.

Firstly, given the former secretary’s submission, it is arguable that the minutes of the 30 November 2005 committee meeting are not a full and accurate record of the meeting, as required by section 36(1)(a) SM. Further, it is arguable that there is any resolution authorizing the work to be done. Both versions of the minutes appear to me to do little more than record a discussion on the subject. There is certainly no record of any vote having been taken on the issue. Section 33 SM provides that at a meeting of the committee, a question is decided by a majority of votes of the voting members present (either in person or by proxy) and entitled to vote and each voting member has one vote on the question.

Secondly, the minutes of the meeting were not distributed within 21 days of the meeting as required by section 36(4) SM. The works were carried out before the minutes of the meeting were distributed. This denied owners an opportunity to issue a "notice of opposition" to prevent the committee from carrying out the resolution in accordance with section 37 SM. (As stated above, it is arguable that there was any resolution to implement in any event.)

Thirdly, based on the information before me, I believe that section 103 SM has been breached. Section 103 provides as follows:

subsection (1)(c) or (d).

The quote presented to the committee meeting on 30 November 2005 was for a total of $5,150 ($4,681.82 plus $468.18 GST) being for the following:

"LOWER WESTERN GARDEN remove neighbours palm fronds, remove palms and paper bark tree from this area, remove all natives, remove all plumbage and hedge murraya bushes, weed and spray, place three stepping blocks to form entry, add murrayas hedge and mulch"

The relevant limit for committee spending in this scheme is $3,500.^[2] It is clear that the subsequent attempt by the chairperson to split the work into two separate jobs was a deliberate attempt to bring the expenditure within the committee’s spending limit and avoid having to go to a general meeting. Section 103(2) prohibits this. The chairperson alleges that the matter was an urgent one and therefore justified her actions. Firstly, I am not convinced that the matter was urgent. Secondly, even if it was, it is necessary to lodge an application with this office to have an adjudicator authorize the expenditure. Otherwise, the matter must go to a general meeting of the body corporate, or, all owners must give written consent. None of these things were done.

After considering the above irregularities, I must conclude that there was no authorization for the spending of a total of $5,150 for the clearing and re-planting of the lower Western garden and I have made a declaratory order to this effect. However, I decline to make the second order sought by the applicant, (that the body corporate institute legal proceedings against the chairperson), for the following reasons:

Firstly, the body corporate is only able to institute legal proceedings (subject to limited exceptions not relevant here) if the proceedings are authorised by special resolution in general meeting.^[3] It appears from all the material submitted in relation to this application, that the body corporate has never been asked to consider instituting such proceedings at a general meeting. If the body corporate has never been asked to consider the matter, there can be no dispute involving it as a party and therefore no right in the applicant to apply to the adjudicator on the basis that he is a party to a "dispute" within the meaning of section 227 of the Act.^[4]

Secondly, it appears as though the applicant himself may not approve of the institution of legal proceedings against the chairperson. He states in the grounds to his application that "It is one breach which probably only warrants a warning but I feel this would prevent it occurring in the future."

Thirdly, and perhaps most notably, there has not been any suggestion (either by the applicant or those owners making submissions) that the work done has not benefited owners. The objection by the applicant appears to be only in relation to the necessary authorization not having been obtained, rather than the work itself being unnecessary.

Finally, I am conscious of the fact that the majority of committee members offer their time and their
resources to the body corporate for little or no monetary reward. They are also, for the most part, self-educated in body corporate matters.

In the circumstances, the body corporate might consider ratifying the expenditure at a general meeting of the body corporate.

This having been said, I do not condone the actions of the chairperson and am particularly concerned by her deliberate disregard for proper legislative procedure, especially in the face of a documented warning from the body corporate manager. The powers of a chairperson are limited to chairing committee and general meetings at which they are present and ruling motions out of order in certain defined circumstances^[5]. The chairperson should be mindful of this. I encourage the committee and all owners to make use of the Information Service provided by this office. The information service can be phoned on 1800 060 119. Our website (www.bccm.qld.gov.au) also contains a plethora of useful information.

^[1] See sections 227, 228, 276 and Schedule 5
^[2] See definition in Dictionary of Standard Module - 28 lots x $125
^[3] See section 312 Act
^[4] Tully v. The Proprietors, The Nelson Body Corporate [2000] QDC 31
^[5] See sections 46 and 47 SM

1.	To declare that there was no authority for the body corporate to pay the amount of $5,150 which excessed committee spending;
2.	That the body corporate commence legal proceedings against Lorraine Millard for being in breach of section 103(2).

•	Lorraine Millard, acting as chairperson for the body corporate, requested a quote to clear the garden on the Western side of the complex of rubbish.
•	The quote obtained was for $5,150.00.
•	The body corporate manager advised the committee at its meeting on 30 November 2005 that this amount exceeded the committee’s relevant limit for committee spending.
•	The chairperson had the quote split into two separate components in order to avoid the requirements of section 103 of the Standard Module.
•	The body corporate manager advised the committee at its meeting on 30 November 2005 of the terms of section 103(2) of the Standard Module.
•	The chairperson proceeded to authorise the work to be done, without the matter having been voted on at a committee or general meeting.
•	The work was carried out in December 2005/January 2006.
•	The work was paid for, pursuant to two separate invoices in February 2006.

Queensland Body Corporate and Community Management Commissioner - Adjudicators Orders

Cambridge on the Hill [2006] QBCCMCmr 409 (31 July 2006)