Palm Gables [2006] QBCCMCmr 602 (16 November 2006)

Number of Scheme:	5901
Name of Scheme:	Palm Gables
Address of Scheme:	1306 Gold Coast Highway PALM BEACH QLD 4221

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

I hereby order that the Body Corporate Committee is authorised to spend up to $1,500 a week on the rental of building support props, until approval for this expenditure is considered by owners at the forthcoming Annual General Meeting.

I further order that this interim order has effect for a period of two months from the date of this order.

STATEMENT OF ADJUDICATOR’S REASONS FOR DECISION - REF 0928-2006

"Palm Gables" CTS 5901

The Palm Gables community titles scheme (Palm Gables) consists of 24 lots and common property. The community management statement for Palm Gables indicates that the Body Corporate and Community Management (Accommodation Module) Regulation 1997 (Accommodation Module) applies to the scheme. Department of Natural Resources Mines and Water records show the scheme is registered as Building Unit Plan 9419.

INTERIM APPLICATION

This is an application for interim orders lodged by the Body Corporate for Palm Gables (applicant) on 13 November 2006 under the Body Corporate and Community Management Act 1997 (Act), pursuant to a committee resolution dated 11 November 2006. The applicant sought an interim order in the following terms:

That the Body Corporate Manager, under the verbal instructions of the Committee, be authorised to commit the Body Corporate for up to $1500 per week in the rental of building props, until such time as a permanent solution to the building fault can be completed.

PROCEDURAL MATTERS

In accordance with section 247 of the Act, the Commissioner for Body Corporate and Community Management has referred the application to me to decide whether the nature or urgency of the circumstances of the application warrant an interim order. The Commissioner has referred the application notwithstanding that affected persons have not been given notice of the application or afforded an opportunity to make submissions about the application (section 247(3)).

MATTERS IN DISPUTE

This application seeks approval of emergency expenditure pending approval and completion of repairs to a building fault. The facts of the dispute, as outlined in the application, can be summarised as follows.

The application seeks approval for expenditure of up to $1,500 a week for the hire of the building support props. The application argues that because of the urgency it is not possible convene a general meeting to approve this expenditure. However the Committee is unclear about the actual cost of the props, with the figure of $1,500 based on verbal advice from the engineer, and apparently believe the cost may be absorbed into the total cost of the rectification works. They have sought clarification from GK but this has not been forthcoming.

The Committee proposes to convene the Annual General Meeting (AGM) within the next month to authorise the interim works necessary to stabilise the building and investigate the cause and rectification of the problem. Tenders are being sought for the rectification works and an extraordinary general meeting will be convened to approve these works, estimated to be in the order of $100,000, when quotes are received. A special levy will be required to fund these works.

JURISDICTION

I am satisfied that this is a matter which falls within the dispute resolution provisions of the legislation (see sections 227, 228, 276 and Schedule 5 of the Act).

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)).

Section 279(1) of the Act allows an adjudicator to make an interim order if satisfied, on reasonable grounds, that an interim order is necessary because of the nature or urgency of the circumstances of the application.

DETERMINATION

This application seeks urgent interim relief. An interim order will not be granted unless is it necessary due to the nature or urgency of the circumstances to which the application relates (Act, section 279). Orders granted must be just and equitable in the circumstances (Act, section 276). To determine whether it is just and equitable to grant interim relief, it is relevant to consider the urgency of the issue and whether there are any serious questions for final determination. It is also relevant to consider whether any inconvenience likely to result from the interim order is outweighed by the potential detriment alleged in the application. Of particular relevance is evidence that an interim order is necessary to prevent serious or irreparable harm.

Sections 101 to 103 of the Accommodation Module provide for spending within the scheme. Normally, the committee is able to spend funds if the total cost of the project is less than $3,000 (24 lots x $250). Otherwise, spending must be approved at a general meeting and if the cost if greater than $6,000 two quotes will normally be required.

However, section 101(1)) provide that the Committee may also spend funds over $3000 if the spending is necessary to carry out a statutory notice or order given to the Body Corporate, or the order of an adjudicator of a court. In particular, subsection (c) provides that the spending can proceed if "an adjudicator is satisfied that the spending is required to meet an emergency and authorises it under an order made under the dispute resolution provisions".
The provisions regarding spending are designed to give all owners the opportunity to have input into decisions about significant expenditure. It is important that adjudicators do not subvert the right of owners in this regard unless there is a genuine emergency and that the interests of owners would be served by the expenditure proceeding without their approval.

The application is not clear on what action the Body Corporate has taken to progress repairs since the report obtained in September. The application does not explain why the process to obtain quotes for the project has not been able to be obtained and be ready to submit to a general meeting for approval in the last two months. I am also concerned that the Committee is seeking approval for expenditure but are not clear on what the amount of the expenditure is.

Conclusion

On balance I am satisfied that the circumstances are urgent and that an interim order is warranted. The fact that the props have already been installed means the situation is not as immediately urgent. However I appreciate that it is in the interests of all owners that the props remain in place and that the Committee do not wish to be continuing to spend funds without authorisation.

Accordingly, I have ordered that the Committee may expend up to $1,500 a week on the hire of building support props. However, as issues relating to this application are being put to a forthcoming AGM, I have provided authorisation of the expenditure only until the AGM is held.

The Committee has not yet set a date for the AGM. It should do this as soon as possible and include a motion specifically seeking owner’s consent to the ongoing expenditure on the props, along with any other interim works and investigations necessary.

Effect of an Interim Order

All parties should note the provisions of section 279(2) of the Act, which provides that:

(b) may be extended, varied, renewed or cancelled by the adjudicator until a final order is made; and

(ii) the commissioner gives the person who made the application a written notice under section 241 rejecting the application; or

(iii) a final order is made by an adjudicator to whom the application is referred.

I have provided that this interim order has effect for a period of not longer than two months. This should be sufficient to cover the Body Corporate until the AGM is conducted. It is the responsibility of the Body Corporate to apply in writing to extend this order if necessary. This Office will not automatically renew an interim order and the order will automatically lapse upon a final order being made or this application being withdrawn.

The application has not sought a final order, as would normally be the case. I have contemplated making my interim order a final determination of the matter. However, given the changing nature of the situation I believe it may be of benefit to leave the matter on hold. If circumstances change, for example in regard to the building’s stability, the cost of the building props is determined to be greater, or the AGM is unavoidably delayed or does not approve this expenditure, it may be desirable for the Committee to return for an extension, variation or addition to the order without needing to commence a fresh application. If the AGM approves the expenditure and no additional issues relating to this application arise, the Body Corporate can simply withdraw the application.

	In June 2006 movement was noticed in one corner of the building.
	The Body Corporate engaged GK Consulting Engineers (GK) who reported (9 June 2006) that a crack along the expansion joint in the north wall was unsightly but did not affect the structural integrity of the building. (The report also recommended repairs as soon as possible to concrete spalling in the basement.)
	In September 2006 further movement was identified.
	A further GK report (20 September 2006) reported increased cracking and building movement, relating to issues with the building’s footings and a retaining wall. The report recommended installing props immediately to support the building with works to underpin the building proposed for the following 2-3 months.
	Some support props were installed at that time and the cost was believed to be within the Committee’s spending limit.
	On 6 November 2006 GK advised that the building had moved substantially and recommended the propping occur urgently and that evacuation may be required.
	Additional props were then installed.
	A second opinion was sought from Burchill VDM Engineers (7 November 2006), who appear to agree with the proposed repairs and for the props to remain in place until all repairs are completed. Evacuation was not considered necessary unless further movement is identified.

Queensland Body Corporate and Community Management Commissioner - Adjudicators Orders

Palm Gables [2006] QBCCMCmr 602 (16 November 2006)