Glades Easthill North [2006] QBCCMCmr 456 (21 August 2006)

Last Updated: 19 December 2006

REFERENCE: 0274-2006

ORDER OF AN ADJUDICATOR

MADE UNDER PART 9 OF CHAPTER 6

BODY CORPORATE AND COMMUNITY MANAGEMENT ACT 1997

Number of Scheme:	32506
Name of Scheme:	Glades Easthill North
Address of Scheme:	Easthill Drive ROBINA QLD 4226

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

Christopher & Donna Rose, the Owner(s) of lot 11

I hereby order that the application for an order that the decision of the Body Corporate Committee at its meeting of 23 March 2006 to not upgrade the Master Antenna Television System operating within the scheme be ruled invalid, is dismissed.

STATEMENT OF ADJUDICATOR’S REASONS FOR DECISION - REF 0274-2006

"Glades Easthill North" CTS 32506

APPLICATION

This application is by Christopher and Donna Rose, the owners of Lot 11 (the applicants) against the body corporate (respondent). The applicant is seeking an outcome that the decision of the Body Corporate Committee at its meeting of 23 March 2006 to not upgrade the Master Antenna Television System operating within the scheme, be ruled invalid.

JURISDICTION

"Glades Easthill North" Community Titles Scheme 32506 is a 80 lot scheme under the Body Corporate and Community Management Act 1997 (Act) and the Body Corporate and Community Management (Accommodation Module) Regulation 1997 (Accommodation Module).

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)).

GROUNDS

In February 2006 the committee sent each owner a survey in relation to the Master Antenna Television System (MATV System) servicing the scheme. The survey alluded to the limitations of the current system in relation to digital television and the estimated cost of upgrading the current system to be compatible. It asked owners to circle their preference as to upgrading the central system or installing their own antennas. They note the cost of maintaining a central system.

In relation to not upgrading, the applicants sent the committee a letter requesting clarification on the impact to free to air television reception and close circuit television security. They suggest it would be cheaper overall to maintain the MATV System. The applicants advise they did not receive a response to this letter.

On 23 March 2006, the committee made a decision not to upgrade the MATV System. The applicants assert that the decision of the committee is unlawful as it is a decision on a restricted matter. Specifically, they assert that the decision has changed the "rights, privileges or obligations of the owners of the lots included in the scheme" addressed under Section 24(1)(b) of the Body Corporate and Community Management (Accommodation Module) Regulation 1997.

They further assert that the owners are entitled to receive details of all available options from the committee, along with unbiased information to inform their decision.

SUBMISSIONS

A total of 9 submissions were received, including one from the Body Corporate. Five of the submissions were in favour of the applicant and four, including that submitted on behalf of the Body Corporate, opposed the outcome sought by the applicant.

One of the arguments in favour of the applicants is that the MATV System is a Body Corporate asset that was provided by the developer as part of the original scheme. They put forward an argument that where a Body Corporate asset "requires" upgrading, then the funding for this should come from Body Corporate assets. They argue that they have a right to have the features they purchased, maintained.

There is some reference to the committee’s statement in relation to the cost of maintaining the MATV and it is pointed out that there has been no maintenance to the existing antenna in 2 years. Further some of those supporting the applicant state they have no reason to believe that maintaining a digital antenna would be any more expensive. They also question the ability of individual antennas to pick up signal given the varying heights of the buildings in the complex.

The survey form is alleged to have been assembled on a biased basis. There are references to the fact that some committee members have already erected antennas on their own premises. Some observe that the antennas will look unsightly.

The individual submissions opposing the applicant include comments in relation to:

•	the lack of immediate need to upgrade the antenna;
•	the majority view expressed in the survey; and
•	that individuals could have taken the time to inform themselves as to the alternatives, rather than placing an onus on the committee to undertake a comprehensive briefing paper.

Both sides of the issue provide opposing arguments on the cost of each approach.

The Body Corporate committee submission has included copies of the completed and returned survey forms. Of the 33 forms returned, 27 indicate a preference to install individual antennas. They allege that many owners have trouble with the existing antenna and that it requires constant maintenance. They say they have not determined to remove the system and that the rights privileges and obligations of the lot owners have not changed in any way. They also argue that as the change to digital is some four to five years away, the expense is not warranted at this time.

The committee has provided a copy of the minutes of their meeting of 8 June 2006, where they are said to have composed the following motion for the upcoming annual general meeting:

"That the central MATV System not be repaired if it fails and owners be authorised to install individual TV antennas to their lots for the receiving of free to air television".

RESPONSE TO SUBMISSIONS

The applicants deny that there are ongoing maintenance costs to be expected from the MATV System, as an historical problem has now been identified and corrected. They state there is no basis in fact for the assertion that there will be ongoing maintenance costs.

They again suggest that the committee is not providing enough background information and is deliberately failing to highlight the implications of the antenna for the CCTV security system.


The applicants contest the wording of the motion to be put to the annual general meeting (above), saying that this motion goes well beyond not upgrading the MATV System and effectively means that should the MATV system develop a fault, it will not be fixed.

They note that the minutes of the committee meeting they received dated 8 June 2006, did not make reference to any motion regarding the MATV system, and attach a copy of their copy.

They also note that the motion that was actually on the voting paper for the annual general meeting was:

"That the central MATV System not be upgraded if it fails and owners be authorised to install individual TV antennas to their lots for the receiving of free to air television, subject to Body Corporate approval".

On this basis, they therefore raise procedural questions that are not relevant to the outcome sought here.

DETERMINATION

Section 108(1) of the Body Corporate and Community Management (Accommodation Module) Regulation 1997 provides that the Body Corporate must maintain common property in good condition. Section 118(1)(b) of the Accommodation Module also provides that the Body Corporate may supply utility services and other services for the benefit of owners and occupiers, if the services consist of communication services, which may include the installation and supply of telephone, intercom, computer data or television.

I should first detail my understanding of an MATV system:

An MATV system is basically a network of cables and specially designed components that process and amplify TV and FM Signals and distribute them from one central location.^[1]

I am satisfied that in this matter, the MATV System is common property and that it is a feature that many residents found influential in their purchasing decision. An aspect of the system that many purchasers would have found desirable is the security features of the CCTV.

Digital Broadcasting Australia advises that:

The Australian Parliament has determined that there is to be a simulcast period of eight years (or longer where prescribed) during which broadcasters are to transmit their television programs in both analog and digital mode.  Effectively this means analog television transmissions will not be switched off before 31 December 2008 in mainland metropolitan markets and not before eight years have passed since the introduction of digital television in other markets.
The Government has recently suggested an analog switchover period commencing in 2010 to 2012, consistent with the targets set in many other industrialised nations.
The Government has announced the setting up of a Digital Action Plan to provide a roadmap to switchover.^[2]

Therefore it appears that sometime in the next few years it is likely that the existing MATV installation will become obsolete in relation to the distribution of digital television signals. However, I understand that in its current assemblage it is suitable for upgrade.

In my mind, there are two facilities currently being provided by the MATV system. Firstly, there is the distribution of free to air television signals and the other is CCTV security services to residents. The applicants argue that the provision of these facilities amount to rights which cannot be varied by the Committee.

As the Act is currently worded, owners within a community titles scheme have a right to expect that the Body Corporate maintain common property in good condition. The difficulty in this scenario is whether or not adapting existing equipment for developments in technology or changes in available service provision, amounts to maintenance or improvement.

Maintenance is not defined within the Act, though improvement is:

Improvement includes-

(a) the erection of a building; and
(b) a structural change; and
(c) a non-structural change, including for example, the installation of air conditioning.

At this point, the Act also makes reference to the Acts Interpretation Act 1954, which defines "change" in section 36:

Change includes change by addition, exception, omission or substitution.

In this case, whether or not the upgrade proposed by the committee means the addition of digital capabilities or the substitution of digital capabilities, it still amounts to a change within this definition. Therefore, this supports the view that the upgrade amounts to an improvement rather than maintenance.

I am also mindful that language may be evolving in line with developments in technology. To this end, I have located the following definition of "hardware maintenance" at two different locations on the World Wide Web:^[3][4]

"Hardware maintenance is the testing and cleaning of equipment."

This also then supports the interpretation, that the upgrading of the MATV from analogue to digital capabilities is termed an improvement, rather than maintenance.

Therefore in my view, the decision of the committee not to upgrade the MATV system did not amount to a decision to change the "right" of owners to have the MATV "tested and cleaned" but rather was a decision not to move for "addition or substitution" to the MATV.

The authorisation of installation of individual antennas is a separate matter and is captured by the notion of "minor improvement" in the definitions schedule and Section 113 of the Body Corporate and Community Management (Accommodation Module) Regulation 1997.

113 Improvements to common property by lot owner

(1) The body corporate may, if asked by the owner of a lot, authorise the owner to make an improvement to the common property for the benefit of the owner’s lot.

(2) The improvement must be authorised by special resolution of the body corporate unless--

(a)	the improvement is a minor improvement; and

(b)	the improvement does not detract from the appearance of any lot included in, or common property for, the scheme; and

(c)	the body corporate is satisfied that use and enjoyment of the authorised improvement is not likely to promote a breach of the owner’s duties as an occupier.

(3) An authorisation may be given under this section on conditions the body corporate considers appropriate.

(4) The owner of a lot who is given an authority under this section 41--

(a)	must comply with conditions of the authority; and

(b)	must maintain the improvement made under the authority in good condition, unless excused by the body corporate.

In this regard then, the Body Corporate may be facing a considerable amount of administrative work in making individual approvals to lot owners.

I note that in the response to submissions, the applicants have raised concerns in regard to the motion as originally proposed by the committee and the motion ultimately voted on at the annual general meeting. I accept that this is irregular, however Adjudicators have historically been guided by the views expressed by His Honour Judge Boulton DCJ in Chen v Body Corporate for Wishart
Village CTS 19482:

"The very detailed provisions of the standard module regulation to which I have referred above make it almost inevitable that from time to time there will be non-compliance. Equally though the provisions of the Act make it clear that non-compliance of an insubstantial nature will not be allowed to imperil the actions of bodies corporate or their committees, particularly in the instance of committees where actions are taken bona fide."

With this in mind, I am not inclined to place any significance on the change in the wording from that proposed to that voted on at the annual general meeting.

However I observe that, I do feel some discomfort in relation to the allegation that the committee meeting minutes of 8 June (that the applicants hold) do not make reference to the MATV system, when those supplied by the committee to this office do contain a reference.

The motion as originally proposed could in my view have represented a change in maintenance rights, in that the MATV is required to be maintained for analogue reception as long as analogue it is available. Further, if the MATV is crucial to the maintenance of the CCTV service, then its repair and maintenance is required. Of course, the Body Corporate may resolve to do without the asset, thereby negating the need for maintenance and it appears that this is the intention of the motion originally proposed by the committee.

However in some ways, the resolution finally passed at the annual general meeting is open to interpretation. Does it mean, they won’t upgrade the MATV system if it stops working, but they might upgrade it if it keeps working up to the changeover time? Does it mean that, if the CCTV is dependent, that owners have resolved to forgo that service? Given that the withdrawal of analogue is a number of years away, can it really be interpreted that the Body Corporate may never change its mind and instigate an upgrade? Given that individual lot antennas are likely to require approval of the Body Corporate by special resolution, has the passing of this resolution in fact put anything into action or stopped anything from occurring?


While I can understand that the availability suitably qualified technicians could become scare close to the final change over to digital, there appear to be at least a couple of years available to the applicants to do their own research and provide suitable information to fellow owners. Antennas will need individual approval of the Body Corporate. Reception difficulties for individual antennas may or may not come to light. Price estimates may or may not be confirmed.

There is nothing precluding the applicants proposing their own motion to a general meeting, seeking that the Body Corporate approve the upgrading of the current MATV to digital capabilities. While I note that the applicants may ultimately need to accept that the outcome of a democratic vote is not in their favour, at this point I regard this application as premature.

For the above reasons, I will dismiss the application.

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^[1] http://www.starkelectronic.com/cmatv.htm
^[2] http://www.dba.org.au/index.asp?sectionID=89
^[3] http://www.answers.com/maintenance&r=67

^[4] http://www.pcmag.com/encyclopedia_term/0,2542,t=maintenance&i=46542,00.asp