Federation Park [2007] QBCCMCmr 639 (14 November 2007)

Last Updated: 24 December 2007

REFERENCE: 0424-2007

ORDER OF AN ADJUDICATOR

MADE UNDER PART 9 OF CHAPTER 6

BODY CORPORATE AND COMMUNITY MANAGEMENT ACT 1997

Number of Scheme:	30544
Name of Scheme:	Federation Park
Address of Scheme:	9 Harpulia Court MORAYFIELD QLD 4506

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

Mr. Rajko Ribic, the Owner of lot 22

I hereby order that the application for the following orders: • That the body corporate members who engaged the surveyor pay all costs relating to his engagement; • The body corporate members that had the fence erected allowing lot 21 exclusive use of common property with total disregard to all body corporate members legal decisions pay for the material erection including the dismantling of the fence so all body corporate members have their common property returned; • Appoint an administrator to teach the body corporate how to function as a legal body corporate; • That the body corporate fills the vacancy left by the resignation of the Secretary and appoint new members as per section 25C of the module; • That the body corporate sends out all minutes including the committee meeting minutes that was held in April 2007 section 36 of the module is dismissed.

STATEMENT OF ADJUDICATOR’S REASONS FOR DECISION - REF 0424-2007

"Federation Park" CTS 30544

Application

Federation Park Community Titles Scheme (Federation Park) is a 42 lot scheme under the Body Corporate and Community Management Act (Act) and the Act’s Standard Module Regulation (Standard Module).

The application was received by this Office on 13 July 2007 and subsequently amended on 26 July 2007. The applicant is Mr. Rajko Ribic, Owner of lot 22 (the applicant) who is seeking the following orders against the body corporate for Federation Park (respondent):

• That the body corporate members who engaged the surveyor pay all costs relating to his engagement;

• The body corporate members that had the fence erected allowing lot 21 exclusive use of common property with total disregard to all body corporate members legal decisions pay for the material erection including the dismantling of the fence so all body corporate members have their common property returned;

• Appoint an administrator to teach the body corporate how to function as a legal body corporate;

• That the body corporate fills the vacancy left by the resignation of the Secretary and appoint new members as per section 25C of the module;

• That the body corporate sends out all minutes including the committee meeting minutes that was held in April 2007 section 36 of the module;

Background

The applicant states that the body corporate committee unnecessarily paid a surveyor to ascertain the respective boundaries of the common property and lot 21 before a fence was erected by the body corporate. He believes that this expenditure was not budgeted for, not approved by a general meeting nor recorded in the minutes.

Secondly, the applicant states that by erecting a fence slightly inside the boundary between the common property and lot 21, the body corporate committee has granted exclusive use of common property to lot 21.

Thirdly, the applicant believes that the body corporate committee purchased a water tank and garden shed without authorisation, and by locating the tank and shed on common property, the committee has made an unauthorised grant of exclusive use.

Finally, the applicant states that because the committee did not comply with section 25C of the Standard Regulation Module regarding the filling of casual vacancies on the committee, Ms. Hewison was not properly appointed to the position of secretary following the resignation of Mr. Davidson. Further, it is claimed that Ms. Irene Broderick was not properly appointed as an ordinary member of the committee.

Submissions

Pursuant to section 243 of the Act submissions were sought from the body corporate and also from all owners. Submissions from 8 lot owners opposed the application while 1 lot owner (lot 21) supported the application.



The body corporate made the following submissions:

• The applicant is seeking to overturn decisions which were made between November 2006 and February 2007 and the committee believes it is inappropriate to submit a dispute resolution application so long after relevant resolutions have been carried;

• The owners of lot 21 closed off an area that was previously used by lot owners for pedestrian access and as a result, pedestrians needed to walk on a roadway and risked injury from incoming traffic. Once pedestrians were denied access to the gateway, the committee was obliged to ensure the safety of residents walking on common property. The committee spent $522 to a surveyor to determine whether the subject area was on common property and to also determine the boundary between lot 21 and the common property;

• The committee intends to rectify this problem by providing alternative pedestrian access, and in order to accomplish this, a survey was required;

• A water tank was installed to supply water to the swimming pool and was installed on common property as close as possible to the pool;

• The following two quotations were obtained for the water tanks:

Urban tanks - $4,714

Bluey’s tanks - $2,700

The body corporate accepted the quote from Bluey’s tanks - $2,700 and received the rebates to defray the cost. Caboolture SC paid the body corporate $400 and the Queensland Government paid $1,000.

• A new community management statement is not required as asserted by the applicant, because the body corporate has not granted exclusive use of body corporate property. Rather, the body corporate continues to be the owner of the small area of land bounded by the new fence. It was impossible to unilaterally build a new fence without the agreement of lot 21 and therefore the fence was built as close as possible to the boundary. In any event, this fence was the subject of a previous adjudication which was determined in favour of the body corporate;

• The applicant appears to be confused regarding the role of an administrator. They question why the applicant nominated for the positions of secretary and chairperson at the last AGM if he wants an administrator to be appointed. Similarly, the applicant had the opportunity to submit a quote from another body corporate management firm if he is unhappy with the performance of the current manager;

• Acting on advice from the body corporate manager, a vacancy on the committee was filled by way of a committee vote;

• The body corporate had been seeking a copy of the committee meeting minutes from the manager who advised that the delay was attributable to illness;

• The applicant has already written to Ms. Hewison on a number of occasions and addressed correspondence to the Chairperson /Secretary on each occasion.

• The majority of residents in the scheme are happy with the committee’s performance. However, two absentee owners who are also unfinancial, and two resident owners continually have troubles with whatever committee is elected;

• The committee believes that the application should be dismissed as it has no merit and depletes the finances of the scheme.

Submissions made by eight other lot owners included the following:

• The body corporate was empowered to engage a surveyor and there was provision for such expenditure from the administrative fund under the heading "legal expenses";

• The fence adjacent to lot 21 was formally approved and ratified by the current committee on 20 August 2007 and a previous dispute resolution application regarding this fence was decided in favour of the body corporate. The small area of land between the two fences remains common property;

• An administrator is not required as residents are able to run the body corporate with the assistance of a body corporate manager;

• When the secretary’s position became vacant, a new Secretary was appointed in accordance with section 25C of the regulation Module;

• the owners of lot 21 changed the locks on a gate previously used by pedestrians, and as a result pedestrians had to walk on the roadway. The surveyor was engaged to determine whether the pedestrian gate and pathway leading to the gate were part of lot 21 or on common property. The amount spent on the surveyor was well within the limit for committee spending;

• the shed and water tank are used for the benefit of the body corporate

• the purchase of the shed and water tank was authorised by the committee and was within the committee spending limit. Further, the committee is entitled to make improvements to common property;

• the developers of the scheme continue to bear animosity toward the body corporate because of the committee’s desire to operate independently as they see fit;

• other lot owners stated that they are happy with the current committee and that an administrator is not required.

The applicant made a number of points in reply to the submissions.

Jurisdiction

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)).

Decision

In summary, the applicant is seeking the following orders:

• That the fence should be removed because it closes off a small area of common property.

• That committee members who engaged a surveyor and contractors to build the fence should be personally liable for the cost of the survey, the cost of building the fence and the cost of dismantling the fence.

• That an administrator be appointed;

• That the body corporate fills the vacancy left by the resignation of the Chairperson/ Secretary and appoint new committee members;

• That the body corporate send out all minutes of meetings including minutes of the committee meeting that was held in April 2007.

In reply, the body corporate committee states, inter alia, that the applicant is seeking to overturn decisions which were made between November 2006 and February 2007 and it is inappropriate to submit a dispute resolution application so long after relevant resolutions had been carried. I believe that there is substance to this argument by the body corporate as section 242 of the Act provides as follows:

242 Time limit on certain adjudication applications
(1) This section applies to an adjudication application for an order declaring void--
(a) a meeting of the committee of the body corporate or a general meeting of the body corporate or
(b) a resolution of the committee or body corporate; or
(c) the election of an executive or other member of the committee.
(2) The adjudication application must be made within 3 months after--
(a) if subsection (1)(a) applies--the meeting; or
(b) if subsection (1)(b) applies--the meeting at which the resolution was passed or purported to be passed; or
(c) if subsection (1)(c) applies--the meeting at which the executive or other member was elected.
(3) A person is taken to have complied with subsection (2) for a dispute if the person made a conciliation application for the same dispute within the time mentioned in the subsection for
the dispute.
(4) However, if the making of the adjudication application does not comply with subsection (2)--
(a) the commissioner must deal with the application (including making a dispute resolution recommendation for the application) as if the making of the application complied with subsection (2); and
(b) an adjudicator to whom the application is referred for specialist or department adjudication may, for good reason, waive the non-compliance.

Accordingly, given the effluxion of time between the date of relevant committee resolutions and the lodgement of this dispute resolution application, I do not believe I am empowered to overturn the resolutions unless I am able to establish that there are good reasons for doing so, as contemplated by section 242(2) of the Act.

I will firstly deal with the allegation that the body corporate has granted exclusive use of common property by building the fence, installing a water tank on common property and erecting a garden shed on common property.

As I previously stated in decision 378-2007, the committee has constructed a fence and garden shed a few centimeters within the boundary because it would not have been able to construct a fence on the boundary without seeking agreement from the owner of lot 21. The body corporate continues to be the owner of the area in question, and no particular lot owner, including the owner of lot 21, is entitled to exclusive use of this area.

Secondly, it is clear that the land upon which the garden shed is located remains the property of the body corporate and is used by the body corporate for storage of body corporate assets, including equipment which is used to maintain the common property. Similarly, the water tank is a body corporate asset and was installed to supply water to the swimming pool. It was installed on common property as close as possible to the pool and is used solely for supply of water for body corporate purposes.

Accordingly I do not believe that section 111 of the Standard Module, regarding disposal of Common Property, arises in relation to the location of the fence, garden shed or pool.

The next matter for consideration is whether expenditure for these items was properly authorized. I believe that each of these three items of expenditure were within the relevant limit for committee spending which is calculated by multiplying $125 by the number of lots in the scheme^[1] (i.e. $125 x 42 = $5,250). The evidence at hand indicates that the cost of the shed was $800, the cost of the tank was $2,700 (less government rebates of $1,400) and the cost of the fence was $464. Each of these amounts was easily within the relevant limit for committee spending and did not require authorization by the body corporate in general meeting. I also note that the above expenditure was formally approved and ratified by the current committee on 20 August 2007.


The next matter for consideration is the validity of two appointments that were made to fill casual vacancies on the committee. I am advised that following the resignation of Mr. Davidson, Ms. Hewison was appointed to the position of Secretary and Ms. Irene Broderick was appointed as an ordinary member of the committee, pursuant to section 25C of the Standard Module. I have also been provided with a copy of the minutes of the committee meeting held on 9 April 2007 which confirms that the new committee members were appointed pursuant to section 25C of the Standard Module which provides as follows:

25C Committee must appoint new member or call general meeting of body corporate
(1) Within 1 month after the position of the member of the committee becomes vacant, the committee must--
(a) if the number of its members has not fallen below the number required for a quorum--
(i) appoint a person who is eligible to be a member of the committee to fill the vacancy; or
(ii) call a general meeting of the body corporate to choose a person to fill the vacancy; or
(b) if the number of its members has fallen below the number required for a quorum--call a general meeting of the body corporate to choose a person to fill the vacancy.

On the other hand, the applicant argues that the above appointments were made after more than 1 month had expired. I have reviewed the minutes of the committee meeting and note that Mr. Davidson resigned as Secretary on 24 February 2007, and new committee members were appointed at a Committee meeting held on 9 April 2007 – some 12 days after the one month period had expired. However, the applicant has not provided evidence to suggest that this delay was more than a procedural irregularity and in any event, I do not believe that he has shown that special circumstances exist to enable me to disregard the 3 month limitation period referred to in section 242 of the Act. In this regard it is relevant to consider the views expressed by His Honour Judge Boulton DCJ in Chen v Body Corporate for Wishart Village CTS 19482^[2]. In his decision, Judge Boulton considered provisions of the Standard Module and commented that "The very detailed provisions of the standard module regulation to which I have referred above make it almost inevitable that from time to time there will be non-compliance. Equally though the provisions of the Act make it clear that non-compliance of an insubstantial nature will not be allowed to imperil the actions of bodies corporate or their committees, particularly in the instance of committees where actions are taken bona fide". I consider that Judge Boulton’s comments are relevant in this instance.

The next matter which I turn to is the applicant’s complaint regarding the failure by the committee to circulate minutes of committee meetings in a timely manner.

In this regard, section 36 of the Standard Module provides as follows:
Minutes and other records of committee
(1) The committee must ensure--
(a) full and accurate minutes of its meetings are taken; and
(b) a full and accurate record is kept of each motion voted on other than at a meeting.
(2) The secretary must give a copy of the minutes of each meeting and of any resolution voted on other than at a meeting to the following persons--
(a) each member of the committee;
(b) each lot owner who is not a member of the committee.
(3) Subsection (2)(b) does not apply to a lot owner who--
(a) has given the secretary a written notice instructing the secretary that the lot owner does not wish to be given copies of the minutes of committee meetings and resolutions voted on other than at meetings; and
(b) has not withdrawn the instruction.




(4) The copy must be given to the person--
(a) within 21 days after--
(i) for a copy of minutes of a meeting--the holding of the meeting; or
(ii) for a copy of a resolution voted on other than at a meeting--the passing of the resolution; and
(b) in 1 of the following ways--
(i) by handing it to the person;
(ii) by sending it by mail;
(iii) by sending it by facsimile;
(iv) by sending it electronically.
(5) In this section--
full and accurate minutes, of a meeting, means minutes including each of the following--
(a) the date, time and place of the meeting;
(b) the names of persons present and details of the capacity in which they attended the meeting;
(c) details of proxies tabled;
(d) the words of each question decided;
(e) the number of votes for and against each question decided;
(f) details of correspondence, reports, notices or other documents tabled;
(g) the time the meeting closed;
(h) details of the next scheduled meeting;
(i) the secretary’s name and contact address.
full and accurate record, of a motion voted on other than at a meeting, means a record including each of the following--
(a) the date notice of the motion was given;
(b) the names of the committee members to whom notice was given;
(c) the words of the motion voted on;
(d) the names of the committee members who voted on the motion;
(e) the number of votes for and against the motion.

I have previously noted that there were certain deficiencies in the minutes of committee meetings for this scheme and have also raised concerns regarding delays in having minutes of committee meetings distributed to lot owners. The committee has stated that the delay was caused by the body corporate manager who had been ill and that minutes of relevant committee meetings have now been distributed.

Finally, the question arises as to whether an administrator should be appointed as suggested by the applicant. Appointment of an administrator is not a step that is taken lightly and is a very serious step for any adjudicator under the Act. It effectively removes control of the body corporate from the committee, and even the general meeting itself in certain circumstances. I do not believe that extreme circumstances exist in this case. Although all lot owners have had an opportunity to make submissions regarding the application, no submissions support the appointment of an administrator and in fact most submitters indicated that they are content with the performance of the present committee.

Having regard to the foregoing reasons, I believe that the application should be dismissed in its entirety.

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^[1] See Section 103 Standard Module Regulation
^[2] Appeal 4080 of 2000, District Court Brisbane, 29 May 2001.