Edgecliffe Apartments [2007] QBCCMCmr 620 (5 November 2007)

Last Updated: 13 November 2007

REFERENCE: 0855-2007

INTERIM ORDER OF AN ADJUDICATOR

MADE UNDER PART 9 OF CHAPTER 6

BODY CORPORATE AND COMMUNITY MANAGEMENT ACT 1997

Number of Scheme:	10509
Name of Scheme:	Edgecliffe Apartments
Address of Scheme:	4 The Esplanade BULCOCK BEACH QUEENSLAND 4551

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

Justin Kenneth Glen, the owner of lot 1

I hereby order that, pending a final determination of this application, the body corporate for Edgecliffe Apartments community titles scheme 10509 (including its committee or any member of its committee) must not proceed with, implement or otherwise act upon Resolution 4 (to remove the awnings that are affixed to the common property over lots 1 and 2), purportedly made at the Extraordinary General Meeting held on 28 September 2007. This interim order has effect until 12 months have elapsed from the date of this order, a further interim or final order for the application is issued, or until the application is withdrawn, rejected or otherwise ended (whichever is the earlier).

STATEMENT OF ADJUDICATOR’S REASONS FOR DECISION - REF 0855-2007

"Edgecliffe Apartments" CTS 10509

Application

This application is by Justin Kenneth Glen, the owner of lot 1 (applicant), against the body corporate seeking an interim order, the effect of which would be to prevent motion 4 purportedly passed at the Extraordinary General Meeting (EGM) on 28 September 2007 from being implemented until the validity of that motion is determined.

Minutes of the EGM of 28 September 2007 record the following in relation to Motion 4:

Motion 4: Resolved that, by ordinary resolution, that the Body Corporate resolves to remove the awning that are affixed to the common property over Lots 1 and 2. Such removal will be done in consultation with the owners of Lots 1 and 2.

(5 votes for, 4 against, nil abstain)

The voting paper for the EGM recorded the following in relation to Motion 4:

MOTION 4: Submitted by committee

That, by ordinary resolution, that the Body Corporate resolves to remove the awning that are affixed to the common property over lots 1 and 2. Such removal will be done in consultation with the owners of Lots 1 and 2.

Explanatory Note to Motion:

The Body Corporate notes that prior to the year 2004 Annual General Meeting an Adjudicator from the Office of the Commissioner for Body Corporate and Community Management ordered that the subject awning are in fact located on the common property and are the responsibility of the Body Corporate.

Jurisdiction

"Edgecliffe Apartments" is a community titles scheme under the Body Corporate and Community Management Act 1997 (Act) and the Body Corporate and Community Management (Standard Module) Regulation 1997 (Standard Module). It comprises 10 lots and common property.

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 being issued. Section 276(1) of the Act provides that an adjudicator may make an order that is just and equitable in the circumstances to resolve a dispute, in the context of a community titles scheme, about a claimed or anticipated contravention of the Act; or the exercise of rights or powers, or the performance of duties, under the Act. An order may require a person to act, or prohibit a person from acting, in a way stated in the order (s276(2), Act).

Procedural matters

In accordance with the Act, submissions were called and a copy of the application was provided to each committee member with an invitation to make submissions regarding the interim order application.


Submissions

The applicant

• States that the awnings are a body corporate asset.

• States that the question of whether the awnings are the responsibility of the body corporate was contested in 1998 and against in 2004, via dispute resolution applications to this office. On both occasions, the adjudicator confirmed that the awnings are a body corporate asset.

• Believes that section 111 of the Standard Module requires a disposal of the awnings to be passed by resolution without dissent. An ordinary resolution in insufficient. Motion 4 therefore does not comply with the regulations.

The chairperson (Mr Morat)

• States that the EGM of 28 September 2007 was requisitioned under section 61 of the Standard Module by himself, the owner of lot 8 and the owner of lot 7. The committee did not request the EGM nor did the committee submit any motions for inclusion on the EGM agenda.

• Believes the awnings the subject of motion 4 of the EGM of 28 September 2007 provide a benefit to lots 1 and 2 only as the awnings are installed over the balconies of only lots 1 and 2.

• States that the awnings have been previously deemed to be common property.

• States that there are 10 lots in the scheme and each lot has one contribution schedule lot entitlement and one interest schedule lot entitlement. Combined, lots 3 to 10 pay, via their administrative fund levy contributions, 80% of the ongoing recurrent costs of the repair and maintenance of the awnings. Further, lots 3 to 10 pay, via their sinking fund levy contributions, 80% of the future capital cost of the replacement of the awnings, new for old.

• Believes that lots 3 to 10 receive absolutely no material benefit whatsoever from the fact that the awnings remain installed and incorporated into the common property.

• States that if the situation remains unchanged, it imposes an ongoing and grossly less than equitable financial burden on all lots, other than lots 1 and 2.

• States that the outcome sought by not less than 7 owners is to pass the financial burden for the ongoing repair and maintenance, and ultimately, replacement, of the awnings onto the owners of lots 1 and 2, and on that basis, they would have no in-principle objection to the awnings remaining in-situ.

I did not receive any submissions from other members of the committee, other than a copy of the minutes of the EGM of 28 September 2007. Mr Morat specifically states that his submission is made on his own behalf and not on behalf of the committee.

Determination

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. In any consideration of an application which seeks the making of an interim order, it is necessary to determine at the outset whether, because of the nature or urgency of the circumstances relating to the application, an interim order is in fact necessary or appropriate.

The applicant seeks, in effect, to prevent Motion 4 of the EGM of 28 September 2007 from being implemented, until the validity of the resolution is determined. He alleges that the motion was incorrectly submitted as requiring an "ordinary resolution" and should have been designated as requiring a "resolution without dissent". The chairperson states that motion 4 was incorrectly designated as having been submitted by the committee, when, in fact, he and two other owners submitted the motion (and also requisitioned the EGM at which the motion, along with three others, was considered). In these circumstances, it is appropriate to briefly consider whether the applicant raises any serious legal questions that will need to be determined. If the application raises such a question then it may be appropriate to make an interim order to attempt to preserve the integrity of the matters in dispute until the application is dealt with.

I am not persuaded at this stage that Motion 4 required a resolution without dissent in order to be passed, as the applicant contends. However, I do consider it likely that a special resolution was required, on the basis of the assertion that the awnings in question are "body corporate assets" and the requirements of section 117 of the Standard Module in relation to the disposal of body corporate assets exceeding a stated monetary value ($2,000 in this case). I note that if the motion had been required to be passed by special resolution, it would have failed. I also suspect that, even if the motion were prima facie valid, there is some doubt about whether the passing of the motion constitutes a reasonable decision of the body corporate in administering the common property and body corporate assets for the benefit of the owners of the lots included in the scheme. I further note that, while not necessarily affecting the validity of the motion, it appears as though motion 4 does not strictly comply with the "CLEAR" format for the submission of motions recommended by this office in that no expenses involved are specified, nor is any time-frame specified. It is arguable that a further motion (including quotation/s for the work proposed) may be required to be passed before the awnings could be removed in any event.

Based on the above, I am satisfied that further investigation is necessary before Motion 4 should be permitted to be implemented, including seeking the views of all owners in relation to the matter (whether that be via the submission process or via a conciliation conference). In my view, the likely inconvenience should no interim order be granted outweighs any inconvenience likely to result from the interim order.

For these reasons, I have made an order preventing the body corporate (including its committee or any member of its committee) from proceeding with, implementing or otherwise acting upon Resolution 4, purportedly passed at the Extraordinary General Meeting held on 28 September 2007 until the application for final orders is determined, or the application is otherwise ended.

This application will now be administered in accordance with the Act. I have noted Mr Morat’s desire for a conciliation conference.