Henley [2007] QBCCMCmr 533 (4 September 2007)

Number of Scheme:	5588
Name of Scheme:	Henley
Address of Scheme:	72 Macquarie Street ST LUCIA QLD 4067

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

I hereby order that pursuant to subsection 103(1)(c) of the Body Corporate and Community Management (Standard Module) Regulation 1997, the body corporate committee for the Henley Community Title Scheme is authorised to accept the quote from Arrow Access Security for $38,502 for the purposes of installing new intercom and building access systems to replace the malfunctioning intercom system and associated building access system.

STATEMENT OF ADJUDICATOR’S REASONS FOR DECISION - REF 0711-2007

"Henley" CTS 5588

The Scheme

Henley is a 40 lot scheme regulated by the Body Corporate and Community Management Act 1997 (Act) and the Act’s Standard Module Regulation (Standard Module). The scheme is registered on a Building Format Plan, previously known as a Building Unit Plan.

Application
This application is by the body corporate committee seeking authorisation for emergency expenditure of $38,502 to meet the cost of replacing a malfunctioning intercom system and associated building access system. The applicant states that due to the malfunction, the security system is ineffectual and if the body corporate is required to firstly obtain the approval of a general meeting, the building would be without a security system until an extraordinary general meeting is held.

The Order sought is:

That the committee be authorised to accept a quote and expend the funds to fix the malfunctioning intercom system and the associated building access system without having to implement the time frames required for calling an Extraordinary General Meeting, as the delay is compromising the building’s security.

Background

The applicant states that the intercom system at Henley has been damaged by water leaking from a broken pipe and is malfunctioning. At present the intercom system alerts owners that they have a visitor but they are unable to communicate with the visitor to ascertain their identity. It is therefore proposed that the system be replaced as soon as possible with a new digital system although the cost is beyond the level of committee spending.

In addition the building access system requires replacement, and again, the cost of replacement is beyond the level for committee spending. I am further advised that the existing system is now 18 years old, outdated, and no longer serviceable.

It is claimed that although this expenditure should be approved at an extraordinary general meeting, the building would be without security while such a meeting is being organised, and the committee therefore seeks authorisation to purchase the replacement systems.

The committee has obtained the following quotations for replacement of the intercom and building access systems:

After assessing these quotations the committee recommended acceptance of the "Arrow" quotation. Funds for both the intercom and building access systems are included in the Sinking Fund Forecast and the cost of their replacement has been incorporated into the sinking fund levies.

Attached to the application was a resolution of the committee dated 28 August 2007, authorising lodgement of this application with this Office.

Decision

While the Act limits committee spending on a particular project to $125 per lot, it does recognise certain exceptions to this general rule. In this regard section 103 of the Standard Module Regulation provides as follows:

Spending by committee
(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--

(iii) the judgment or order of a court.
The matter for my consideration is whether, in the circumstances, it would be just and equitable to make an order declaring that the Body Corporate Committee is entitled to commit funds for the replacement of the intercom and building access systems.

On one hand, I note that the purpose of sections 103 and 104 of the Standard Module is to place limitations on committee powers and ensure that items of major expenditure are approved by members of the body corporate in general meeting.

On the other hand however, I note the applicant’s advice that funds for both the intercom and building access systems are included in the Sinking Fund Forecast and the cost of their replacement has been incorporated into the sinking fund levies. I also note the advice from the applicant that owners are currently unable to ascertain to whom they may be opening their unit and that this poses a serious security risk.

In the circumstances, I believe it is appropriate for me to authorise emergency spending for the purposes of replacing the intercom and building access systems. I therefore propose to order that
the body corporate committee for the Henley Community Title Scheme is authorised to accept the quote from Arrow Access Security for $38,502 to upgrade the access control and intercom system.

Queensland Body Corporate and Community Management Commissioner - Adjudicators Orders

Henley [2007] QBCCMCmr 533 (4 September 2007)