No. 9 Port Douglas Road [2006] QBCCMCmr 668 (18 December 2006)

Last Updated: 27 March 2007

REFERENCE: 0687-2006

ORDER OF AN ADJUDICATOR

MADE UNDER PART 9 OF CHAPTER 6

BODY CORPORATE AND COMMUNITY MANAGEMENT ACT 1997

Number of Scheme:	24368
Name of Scheme:	No. 9 Port Douglas Road
Address of Scheme:	9 Port Douglas Road PORT DOUGLAS QLD 4871

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

Maxwell Stainlay, the Owner(s) of lot 17

I hereby order that the application is dismissed.

STATEMENT OF ADJUDICATOR’S REASONS FOR DECISION - REF 0687-2006

"No. 9 Port Douglas Road" CTS 24368

Application

No. 9 Port Douglas Road Community Titles Scheme (PDR) is an 18 lot scheme under the Body Corporate and Community Management Act (Act) and the Act’s Accommodation Module Regulation (Accommodation Module). The scheme is described as a warehouse/office/residence converted to an 18 unit complex.

Applications 0687-2006 and 0774-2006 both contain overlapping subject matter. The applications are by Maxwell Stainlay, owner of lot 17 (applicant) seeking orders against the body corporate for PDR (body corporate). The applicant objects to the failure of the committee to confirm the minutes of a number of previous committee meetings and the decision to obtain quotations for reports to fix exhaust ducts, water hammer and a crack in the wall. The applicant also objects to a committee decision to engage Michael Laycock of Miller Harris Cairns as legal representative at a cost not to exceed $2,250 and a subsequent resolution of owners to engage him at a cost not to exceed $11,000 (including GST).

All owners have had the opportunity to, on request, inspect the material for both of these applications and all owners have been given the opportunity to make submissions in respect of these applications. This order is to resolve the disputes in both related applications and these reasons for decision apply to both applications.

Decision

Failure to confirm minutes

An agenda for a committee meeting must include a motion to confirm the minutes of the preceding meeting (Standard Module, 30(3)). This gives committee members an opportunity to review the minutes of the previous meeting and correct any errors. However, there is no requirement that the committee confirm the minutes.

There have been submissions to the effect that the membership of the committee had changed so the new committee members were not in a position to confirm or deny the accuracy of the minutes of previous meetings. In any event, if there is a dispute about what occurred at previous committee meetings then that dispute would need to be determined after submissions from all parties concerned. Whether or not any minutes have been confirmed will not necessarily be determinative.

I am not satisfied it is necessary or appropriate to make any orders regarding the failure of the committee to confirm the minutes of previous meetings.

Legal expenses

The committee has submitted that the applicant commenced an appeal against the body corporate and there was insufficient time for the body corporate to hold a general meeting prior to the first mention of the matter in court. It is submitted that the committee therefore authorised a solicitor to act of the body corporate up to the amount of the committee spending limit of $2,250. Then, at a general meeting of 17 August 2006, owners authorised spending up to the estimated $11,000 for defence of the entire appeal.

Ideally, any expenditure above $250 per lot should be based on a choice by owners between at least two quotations (Act, 104). The applicant therefore has some valid concerns in that the committee seemingly approved commencement of some work and then gave owners only a single estimate for completion of the work. However, on a common sense approach it is difficult to be critical of the committee. Lawyers typically work according to an hourly rate after having given a non-binding estimate. The committee obtained two comparable estimates and chose one of the lawyers for assistance with urgent work necessary for the initial mention. This work was done below the committee spending limit. Owners then approved an estimate for defending the appeal and the work was completed for less than this amount.

Ideally owners would have been given the option to select between two different lawyers, even if the motion stated that the committee preferred to continue with the lawyer who attended the initial mention. However, an adjudicator is required to make an order that is just and equitable in the circumstances to resolve a dispute (Act, 276). The courts have recognised that the very detailed provisions of the regulations make it almost inevitable that from time to time there will be non-compliance with the legislation and that non-compliance of an insubstantial nature should not be allowed to imperil the actions of bodies corporate or their committees, particularly in the instance of committees where actions are taken in good faith.^[1] In the circumstances I do not consider it just and equitable to invalidate the resolutions regarding the appointment of legal representation for the body corporate.

Obtain quotations for report regarding repairs

The applicant also opposes three resolutions proposing the body corporate obtain quotes to have reports prepared to investigate and recommend possible solutions to problems with the exhaust ducts, water hammer in the plumbing, and a crack in the western wall.

The applicant does not put forward any strong legal basis to invalidate these resolutions and the dispute appears to arise from a misunderstanding that the chairperson intended to inspect the crack in the wall personally instead of obtaining a report. However, the applicant does suggest that it should be possible to simply get a plumber to provide a free quotation to fix the water hammer and get an electrician to provide a free quotation to fix the exhaust fans. The applicant also makes sensible suggestions in relation to the desirability of investigating these issues before the western roof is repaired in case access via the roof is necessary.

I do not consider it is necessary or appropriate to invalidate these committee resolutions. The committee can consider the matters raised and either amend these resolutions or make further resolutions as necessary. The applicant may also be able to obtain his own quotations to have these issued fixed and submit these to the committee or to owners in general meeting. I would simply encourage the applicant and the committee members to work cooperatively towards resolving these issues.

Administrator

Finally, the applicant also seeks the appointment of an administrator to perform the obligations of the committee.

I am not satisfied there are any satisfactory grounds for the appointment of an administrator. It appears that the majority of owners have confidence in the current committee members. If that is not the case then owners can vote in general meeting to have those committee members removed.

Order

For these reasons, the applications are dismissed.

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^[1] Wei-Xin Chen v Body Corporate for Wishart Village CTS 19482, Appeal 4080 of 2000, District Court Brisbane, 29 May 2001.