Glades Easthill North [2006] QBCCMCmr 466 (24 August 2006)

Last Updated: 19 December 2006

REFERENCE: 0318-2006

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

David Huddy, an Owner(s) of lot 28

I hereby declare that the committee has power to authorise an increase in the number of visitor car parks in the 6B area from four car parks to six car parks as an improvement to common property within the committee’s spending power. I further declare that if body corporate funds are required for the improvement beyond what is available in the budget for that purpose then a resolution will be required from owners in general meeting and any necessary special contribution will need to be levied. I further declare that the committee does not have power to grant the use of the car parks for the specific use of any individual or the caretaker.

STATEMENT OF ADJUDICATOR’S REASONS FOR DECISION - REF 0318-2006

"Glades Easthill North" CTS 32506

Application

Glades Easthill North Community Titles Scheme (Glades Easthill North) is an 80 lot scheme under the Body Corporate and Community Management Act (Act) and the Act’s Accommodation Module Regulation (Accommodation Module).

This is an application by David Huddy, an owner of lot 28 (applicant) against the body corporate for Glades Easthill North (respondent).

Background

The applicant alleged that the committee were proposing to enter into an agreement with Sunland Group (developer) to increase parking spaces in one area of the scheme from four spaces to six spaces. It was alleged that this proposal had not been mentioned in minutes of committee meetings or communicated to owners in any other way.

The application raised serious questions about whether there was any proper authorisation for alterations to parking at the scheme and I granted an interim order on 30 May 2006 preventing alterations to parking facilities subject to certain conditions.

The final orders seek that, instead of the committee acting itself to authorise changes to car parking, that a detailed proposal be provided for decision by owners.

Submissions

The applicant’s main submissions were to the effect that:

• The committee has negotiated with the developer to increase parking spaces in one area. This proposal has not been mentioned in minutes of committee meetings or mentioned to owners in any other way;
• The parking area in question is close to the caretaker’s office and it is intended to reserve a number of the additional parking spaces for the caretaker’s exclusive use;
• Questions are raised as to why the developer should contribute to the costs of the new car parks and whether the caretaker is causing increased traffic by acting for other schemes from premises within Glades Easthill North; and
• The committee cannot authorise the car parking changes as this affects the rights, privileges or obligations of owners. The proposed changes can only occur if passed at a general meeting by resolution without dissent.

Submissions on behalf of the body corporate did not claim that the proposed changes were properly authorised by resolution of the body corporate. Rather, these submissions claimed that the chairperson had accepted the proposal ‘in principle’ but the committee would pass a resolution in the future to accept the proposal prior to any work being carried out. It was submitted that it is within the committee’s power to approval the proposed changes to parking as the cost of the improvement is less than the improvement limit and the committee’s spending limit.

Decision

Applicable law

The legislation includes provisions to the effect that:

• Certain decisions are restricted from determination by the committee including decisions to change rights, privileges or obligations of owners or issues reserved for decision by ordinary resolution of the body corporate (Accommodation Module, 24);
• The body corporate must, by ordinary resolution, adopt budgets (Accommodation Module, 92). Special contributions to be levied on owners where inadequate provision has been made in the budget must be set by ordinary resolution (Accommodation Module, 93(2));
• Spending above the $125 per lot limit for committee spending, totalling $10,000 for Glades Easthill North, normally must be authorised by ordinary resolution (Accommodation Module, 101);
• The body corporate has power to make decisions about improvements to the common property but these must be authorised by special resolution if the cost of the project is more than $300 per lot, being a total of $24,000 for Glades Easthill North (Accommodation Module, 112);
• A lease or licence of common property for 10 years or less requires a special resolution of owners in general meeting and a lease or licence for more than ten years requires a resolution without dissent (Accommodation Module, 110);
• The body corporate may grant an exclusive use by-law for the benefit of a particular lot with the written consent of the lot owner and a resolution without dissent (Act, 171); and
• The body corporate may grant a service contractor or letting agent an occupation authority by ordinary resolution of the general meeting (Accommodation Module, 89).

Authority to improve the common property

The committee is elected by owners and acts on their behalf to assist in the administration of the common property and the performance of the other functions of the body corporate. The committee has the power to make many decisions that affect the day to day management of the scheme. However, certain types of decision are reserved for a vote by owners in general meeting.

The applicant submitted that the proposal to increase the car parks from four spaces to six spaces can only proceed if passed at a general meeting without dissent as it is a matter which changes the ‘rights, privileges or obligations’ of owners. Submissions in response were to the effect that the car parking project does not affect the ‘rights, privileges, or obligations of owners and that the committee proposes to pass a resolution to authorise the project as the improvement value of $2,640 is less than the improvement limit and the relevant committee spending limit of $10,000.

These submissions reflect some confusion about the powers and obligations of the committee. In short, the committee of Glades Easthill North does have the power to authorise the project to increase car spaces as an improvement to common property of a relatively low value (Accommodation Module 24, 101, 112). In fact, if the estimated cost of the project is only $2,640 then this represents only $33 per lot.

However, what the committee does not have power to do is to grant any of these car parks for the use of a specific person or the caretaker. A resolution of owners in general meeting is necessary to lease or licence an area of the common property, grant an occupation authority of an area to a caretaker, or grant exclusive use rights over an area. Local council requirements may also apply to prevent visitor car parks being used for other purposes.

Further, matters are complicated in that submissions indicate the developer is to provide funds for the creation of the additional car parks. If the developer is providing all the funds without requiring the body corporate to enter into any agreement that alters the rights, privileges or obligations of owners then this would not be an obstacle. Otherwise, resolutions by owners in general meeting may be necessary to authorise any indemnities granted by the body corporate or to authorise a special contribution to be levied for funds contributed by the body corporate above any budgeted funds.

Order

An adjudicator is required to make an order that is just and equitable in the circumstances to resolve a dispute (Act, 276). The applicant has not satisfied me that the orders sought in the application are justified or appropriate. The alteration to car parking seems to be, in itself, a relatively minor matter that can be properly classified as an improvement to the common property capable of authorisation by the committee. There is no need to require a detailed proposal for owners to decide upon if it is a simple change from four to six visitor car parks.

However, the applicant has raised concerns about the funding for the project, whether the committee may attempt to grant some special rights of use to the caretaker, and whether the committee may enter into an agreement with the developer that affects the rights or obligations of owners. Any of these matters may require a resolution by owners in general meeting.

I therefore propose to grant the declarations above to assist in clarifying the correct position. If the committee wishes to proceed with the project then they should ensure that the necessary resolutions are passed by the body corporate either at committee level or general meeting level as appropriate.

I note that the applicant has also raised concerns in his reply about a resolution purportedly passed by the committee on 20 June 2006. Concerns about whether this was passed by committee meeting without proper notice appear to have significant weight based on the copy of the notice and minutes provided. However, the above reasons should make clear the relevant legislative requirements regarding the proposed project to all persons concerned. There would be little benefit in making an order to stop the project proceeding if appropriate resolutions could almost immediately be passed to allow the project to proceed. Rather, the body corporate should attempt to resolve the situation satisfactorily by considering all appropriate resolutions. The applicant may also wish to put forward some relevant motions himself.

If the applicant remains dissatisfied with the situation then an application to determine the validity or otherwise of these subsequent resolutions could ultimately be brought. However, contrary to the applicant’s submissions, it not inappropriate pre-emption of an adjudicator’s decision for a body corporate to pass new resolutions to correct past deficiencies.