Trickett Gardens [2006] QBCCMCmr 71 (16 February 2006)

Last Updated: 19 December 2006

REFERENCE: 0102-2006

ORDER OF AN ADJUDICATOR

MADE UNDER PART 9 OF CHAPTER 6

BODY CORPORATE AND COMMUNITY MANAGEMENT ACT 1997

Number of Scheme:	11794
Name of Scheme:	Trickett Gardens
Address of Scheme:	24 - 30 Trickett Street SURFERS PARADISE QLD 4217

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

Body Corporate of Trickett Gardens

I hereby order that the body corporate committee of Trickett Gardens is hereby authorised to proceed immediately with the purchase and installation of a PABX system from the Communication Company, and to use existing sinking funds for this purpose, provided however that such funds are to be reimbursed as soon as possible upon the approval of a ratifying resolution to be considered on 9 March 2006, and implemented thereafter.

STATEMENT OF ADJUDICATOR’S REASONS FOR DECISION - REF 0102-2006

"Trickett Gardens" CTS 11794

The applicant, the body corporate of Trickett Gardens has sought the following order of an adjudicator under the Body Corporate and Community Management Act 1997 (the Act) to authorise spending required to meet an alleged emergency, quote:

For the commissioner to authorise the committee to purchase a PABX system from the Communication Company and charge a special levy due on 15 April 2006, with this decision to be ratified at the EGM to be held on 9 march 2006.

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)).

The scheme is a subdivision of 33 lots recorded under a building unit plan (now a building format plan) of subdivision. The regulation module applying to the scheme is the accommodation module.

Section 101 of the Accommodation Module provides as follows:

101 Spending by committee [SM, s 103]
(1) The committee may only carry out a proposal involving spending above the relevant limit for committee spending for the scheme if--
(a) the spending is specifically authorised by ordinary resolution of the body corporate; or
(b) the owners of all lots included in the scheme have given written consent; or
(c) 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; or
(d) the spending is necessary to comply with--
(i) a statutory order or notice given to the body corporate; or
(ii) the order of an adjudicator; or
(iii) the judgment or order of a court.
(2) For this section, 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.
(3) Section 102 applies to the proposal in addition to this section if--
(a) subsection (1)(a) or (b) applies in relation to the proposal; and
(b) the proposal involves spending above the relevant limit for major spending; and
(c) the proposal does not involve spending mentioned in subsection (1)(c) or (d).

It is clear under section 101(1)(c) that I have power to authorise the requested spending if I am satisfied that it is required to meet an emergency.
In its grounds to the application, the body corporate states:

The Body Corporate now finds themselves in a position that the original PABX purchased 25 years ago, is on the brink of collapse with no spare parts available as the product is now obsolete. ... If (the system) crashes again, which happens when there is a storm, the body corporate will not be able to receive incoming calls, nor access the night service. We ask you to note that of the 33 units, 28 are in the letting pool. ...

... However if the system crashes, the body corporate will have no telecommunications for a minimum 4 weeks, post the EGM, and allowing the installation and delivery of the PABX.

The issue for me to determine is whether the spending proposed by the committee in the vicinity of $13600 excluding GST, and proposed to be ratified at the EGM held on 9 March 2006, is justified as an emergency. I am satisfied that the ratification motion has been included on the agenda of a general meeting to be held on 9 March 2006.

Whilst I have not sought submissions from all owners on this application given that to allow time for submissions to be made would defeat the urgency associated with the application, I consider that an order authorising the expenditure is warranted. In particular, I accept the truth of the statement that should the existing system fail again, it is likely that some 28 of the 33 lots will be without telecommunication services. This situation is to be avoided if possible. I do have some concerns that the cost of the proposal is to be met initially with sinking fund moneys (that is, monies belonging to all owners) but that this money will subsequently be recovered in full from those owners who receive the benefit of the new system on the basis of section 118 agreements to be entered into. It goes without saying that should any owner subsequently refuse to enter into a section 118 agreement with the body corporate, then the body corporate will need to ensure that the PABX system or service is not provided to that lot. It will also mean that the cost of the system will be proportionally more to those owners who choose to enter into 118 agreements.

In the circumstances, I have ordered that the body corporate committee is authorised to proceed immediately with the spending to replace the PABX system.