Callaways [2007] QBCCMCmr 701 (20 December 2007)

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

I hereby order that the Owner of Lot 2, Janice Watson-Brown, may submit a motion to the next general meeting of the Body Corporate for Callaways seeking consent to the installation of shutters on the front balcony of Lot 2.

I further order that, if no motion is submitted to the next general meeting or if the general meeting at which the above motion is considered does not pass the submitted motion by an ordinary resolution, the Owner of Lot 2, Janice Watson-Brown, shall remove the shutters within two months of the date of the general meeting.

I further order that, if the Owner of Lot 2, Janice Watson-Brown, is required to remove the shutters in accordance with the above order, she shall be responsible to make good any damage to the waterproof membrane contained in the balconies of Lot 2 and Lot 4.

I further declare that no resolutions were passed at the Annual General Meeting of the Body Corporate for Callaways on 22 June 2007 in regard to the engagement of Ian Newman in any capacity.

I further order that the Body Corporate for Callaways shall provide a copy of this order and the statement of reasons to all owners within thirty (30) days of the date of this order.

I further order that the application is otherwise dismissed.

STATEMENT OF ADJUDICATOR’S REASONS FOR DECISION - REF 0709-2007

"Callaways" CTS 26844

Callaways community titles scheme (Callaways) consists of six lots and common property. The community management statement (CMS) indicates that the Body Corporate and Community Management (Standard Module) Regulation 1997 (Standard Module) applies. Department of Natural Resources and Water records show the scheme is registered as Survey Plan 108815.

APPLICATION

Pursuant to the Body Corporate and Community Management Act 1997 (Act), this application was made by Janice Watson-Brown, Owner of Lot 2 (applicant) on 31 August 2007. The applicant sought orders against the Body Corporate for Callaways (respondent) in the following terms:

Revocation of Motions presented and purportedly passed without notice at the AGM.

Declaration that the position of Chairman be declared vacant and an administrator be appointed.

This application was lodged following an unsuccessful attempt at conciliation on 22 August 2007.

MATTERS IN DISPUTE

The application primarily relates to shutters, motions purportedly approved at the Annual General Meeting (AGM) of the Body Corporate held on 22 June 2007, and the election of the chairperson at the AGM. I have summarised the lengthy information outlined in the application, submissions and reply to submissions, in respect of each of the three key issues.

In opposing the application the Body Corporate notes that the orders sought in the application form differ from those throughout the statement of grounds. They submit that only the orders sought in the application form should be considered, but have responded to all of the matters raised. The applicant claims the submission should be rejected as the Committee has not passed a resolution to appoint solicitors to act on behalf of the Body Corporate.

The submission by the Secretary supports the Body Corporate’s submission and the actions of the Chairman, and provides an alternative version of events for some of the security issues and other incidents. The Chairman’s submission similarly supports the Body Corporate’s submission, and refutes allegations against him by the applicant.

The lengthy submission from AWB supports his wife’s application and provides his views on a range of issues related to the application and the management of the scheme. He claims the Committee has been unduly influenced by the Chairperson.

Shutters

The applicant purchased Lot 2 in April 2007. The shutters in question were ordered on 1 May 2007 and installed in the front balcony of Lot 2 on 29 June 2007.

The applicant says she installed the shutters for security reasons and so under By-law 3(C) she did not require Body Corporate permission. She says the installation was justified because the Body Corporate failed to manage the security of the scheme. The application details her various security issues and concerns regarding the Body Corporate’s management of these issues.

The applicant claims the shutters were soundly built and consistent with the colour, style and materials of the building. She says they are powder-coated aluminium bi-fold shutters (costing some $5,000 to buy and install) that are attached to the ceiling and floor some 1.2m within her lot boundary. She says they a neutral cream colour, and have not altered the external appearance of the building.

On 23 July 2007 the Committee passed a resolution outside a committee meeting (a flying minute) that a by-law contravention notice be issued to the applicant in regard to the "white timber shutters on the balcony of lot 2." The motion was passed with four votes in favour and one abstention. The vote of the applicant’s husband was not counted on the basis of a conflict of interest. The applicant claims other Committee members also had an interest as owners. The applicant suggests that the matter should have been dealt with in a meeting where it could be discussed.

On 6 August 2007 a Notice of Continuing Contravention of a Body Corporate By-law^[2] was issued to the applicant alleging a breach of By-laws 9(a)(vii) and By-law 13. It says that, as Lot 2’s front balcony faces the main entrance, the shutters significantly alter the building’s external appearance.

As the Body Corporate objects to the appearance of the shutters, the applicant has raised alleged by-law breaches in other lots (hanging washing, displaying ‘to let’ signs and placing planter boxes on street-side balconies) which the Body Corporate has not pursued. The applicant also says the building already has a number of different types, styles and colours of shutters and screens installed for shade and privacy purposes. She says there are no records indicating consent for any of these. Accordingly she suggests that the Body Corporate has forgone any rights (the existence of which she disputes) regarding the shutters because of their actions relating to the consent to external appearance and security of the building.

The application form states that the applicant seeks the retention of her shutters. In her grounds the applicant seeks the revocation of the contravention notice and a declaration that the shutters do not breach the by-laws.

In regard to this issue the Body Corporate says:

AGM Motion –handyman

The AGM minutes indicate in a note that AWB proposed during the agenda that the services of handyman Ian Newham be terminated and the Watson-Browns take over the duties at no charge. Five of the six owners apparently favoured retaining Newman, with one against, but it was agreed that Newman would provide a scope of works for consideration. The applicant claims that AWB did not propose a motion but simply queried the amount paid to the handyman.

The application form states that the applicant seeks the revocation of the motions presented and purportedly passed without notice. In her grounds the applicant asks that the ‘motion’ regarding Newman’s employment be removed from the minutes and treated as not passed.

The Body Corporate’s submission states that:

In reply the applicant notes the ‘concession’ that a formal motion was not passed. She says the notation in the minutes are misleading and all references to the motion should be removed.

AGM Motion – painting and repairs

A motion was included in the agenda with regard to exterior painting. At the meeting the Chairperson (David Dowling) withdrew the motion with the intention that the work be temporarily postponed until there were sufficient sinking funds. However, the Chairperson tabled a quote from Ian Newman for $2,274 for certain repair and painting works. The minutes indicate that at the meeting all owners agreed to accept the quote, to be funded from sinking funds.

The applicant claims that the Chairman decided that the quotes were not appropriate and arranged a ‘patch-up’ quote from an unlicensed and unregistered handyman. She had submitted a motion (dated 25 April 2007) that quotes be obtained to paint the complex in the next six months. The applicant claims the Chairperson is ignoring the maintenance responsibilities of the scheme.

In late June 2007 the applicant raised concerns about the quotes from Newman and to paint the entire building. She asked that the Newman work be suspended so that concerns regarding the balcony waterproof membranes could be addressed before sealant was put over the tiles, which she suggested would mask an underlying problem.

On 26 July 2007 the applicant notified other owners that she intended to lodge a dispute resolution application regarding the AGM. She asked that no work on the building be undertaken until her application was considered. On 1 August 2007 the Chairperson emailed other owners to say that Newman had resigned, partly because of a stop work notice which was apparently issued by the Body Corporate Manager (BCM) in response to the applicant’s advice of her proposed application. The email claimed Newman had spent $1,000 on materials for the job and the Chairman had offered to reimburse him. On the basis that no order or advice had been received from the Commissioner, the Chairperson rescinded the stop work order.

The application form states that the applicant seeks the revocation of the motions presented and purportedly passed without notice at the AGM. In her grounds the applicant asks that the painting and repairs motion be removed from the minutes and treated as not passed. She also asks that the Chairperson be responsible for any payments made to Newman under the purported contract, that the Body Corporate not be liable if the Chairperson failed to pay, and that the Body Corporate be entitled to recover the amounts paid to Newman from the Chairperson as a debt.

The Body Corporate’s submission is that:

Election of Chairperson

The applicant claims that the AGM minutes do not reflect the true events regarding the Committee election. She says the BCM did not send a notice calling for nominations within the required notice period. She says AWB raised this at the meeting and asked the Chairperson to allow all owners who wished to be elected to the Committee to be allowed to nominate. The meeting agreed.

However, the applicant says that Dowling immediately declared himself Chairperson and did not call for positions from the floor. He then called for nominations for ‘secretary/treasurer’ at which point AWB said they were two positions which must be treated separately. Harry Stephenson was then elected unopposed ad Secretary and AWB was elected unopposed as Treasurer.

The application form says the applicant seeks a declaration that the position of Chairperson be declared vacant and an administrator appointed. In her grounds she asks that the Chairman’s election be declared void and the position open, and that the Body Corporate continue without Dowling as Chairperson until the next AGM, or that an administrator be appointed for this period.

The Body Corporate’s submission is that:

In her reply the applicant maintains her alternative version of events. She claims owners suffered a disadvantage in not having the opportunity to nominate an alternative candidate for Chairperson. She claims an administrator is required because of a pattern of the Chairperson operating as a committee of one and exercising power over owners in a manner that does not ensure the best outcome for the Body Corporate. She claims there is disharmony in the scheme as a result of the Chairperson’s actions and disputes that this has been caused by her and her husband.

Other issues

The applicant also raises concerns regarding the financial management of the scheme, including comments that the Secretary controls the money and that the Chairperson rather than the Treasurer must vet accounts. However no orders are sought other than for the administrator.

The applicant asks that her fees in the adjudication and conciliation applications be paid by the Body Corporate.

The Body Corporate asks that the application be dismissed pursuant to section 270(1)(c) of the Act as being vexatious, misconceived and without substance. They ask that the applicant be required to pay $2,000 as compensation for the expense incurred by the Body Corporate.

JURISDICTION

I am satisfied that this is a matter which falls within the legislative dispute resolution provisions.^[3]

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:

(b) the exercise of rights or powers, or the performance of duties, under the Act or the CMS; or

(i) the engagement of a person as a body corporate manager or service contractor; or

(ii) the authorisation of a person as a letting agent.

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)).

DETERMINATION

I will address the primary issues in relation to each issue in turn. I do not consider that it is necessary, for a determination of the orders sought, to consider or make findings in relation to the numerous allegations in regard to security and other such incidents.

Shutters

Applicable by-laws

The CMS for Callaways includes the following three by-laws as raised by the parties:

vii. not without the consent in writing of the Body Corporate perform any works or erect any structure or allow the same in or to its lot which will in any way alter the external appearance of the building;

Subject to By-law 12^[4], the owner of a lot shall not without the written permission of the Body Corporate:-

Alleged breach of the by-laws

Firstly, I agree that By-law 3 is not relevant to this dispute. It is not apparent from the material before me, including the plan, that the installation of the shutters is on or affixed to common property.^[5] Moreover, I do not consider that By-law 3(C)(1) acts to automatically permit any owner to install any security device to protect their lot. Rather, it simply provides that the requirement that owners may not damage common property without written consent of the Body Corporate does not of itself prevent the installation of a security device on common property.

The next question is whether the shutters fall within the scope of By-law 13. They are obviously not curtains but it is arguable that they are captured by the word ‘blind’. Although certainly not conclusive, one definition of a blind is "...a window covering composed of long strips of fabric or rigid material. Examples include shutters, Venetian blinds, roller shades and curtain-like track blinds..." (my underlining).^[6] The expression ‘external blinds’ also appears to imply items of the nature of a shutter, which is often external to or replaces a window, than something like Venetian blinds or roller shade which would normally be internal.

By-law 13 would appear to prevent blinds from being erected without Body Corporate permission. However this by-law is clumsily worded. A literal reading of the by-law is that owners cannot erect blinds or hang curtains with a backing of a colour and design approved by the Committee without Body Corporate permissions. This implies that blinds and curtains of a colour and design not approved by the Committee are not covered at all by the by-law. While I am sure this was not the original intention of the by-law, it is difficult to rely on the by-law in its current form.

But regardless of the difficulties with By-law 13, I am of the view that the shutters are covered by By-law 9(a)(vii). While the by-laws should generally be read together, I do not find any basis to interpret By-law 9(a)(vii) as being limited by or subject to By-law 13.

I am of the view that the shutters, being bolted to the floor and ceiling of the balcony, are a structure. It is clear to me from the photographs provided that the shutters have altered the appearance of the building, although the question of whether that alteration was positive or negative is subjective and not necessary for me to determine.

Having found that the shutters are covered by By-law 9(a)(vii), it is clear that the by-law required Body Corporate written consent to be given before the works to install the shutters. The question of whether ‘consent’ or ‘approval’ was required is semantic. The applicant needed to ask and receive agreement from the Body Corporate before proceeding.

Committee decision

Sections 182-186 of the Act provide that when a body corporate reasonably believes that a person is contravening a by-law, they may issue a contravention notice to the person stating certain things, including the nature of the breach and when the matter is required to be rectified by. If the contravention notice does not rectify the matter, the body corporate can commence proceedings in the Magistrate’s Court or lodge a dispute resolution application in the Commissioner’s Office.

It would certainly have been appropriate (particularly in such a small scheme) for the Committee to raise their concerns with the applicant prior to issuing the contravention notice. But I do not consider that they acted unreasonably or in contravention of the legislation by not doing so. It was entirely open to the Committee to identify what they believed to be a by-law breach and decide to issue a contravention notice. If the applicant accepted the allegation she could comply with the notice, but if she disputed the alleged breach the onus was on her to raise that matter with the Committee, and if necessary to pursue the matter at a general meeting or in this Office.

I have found that the applicant should have obtained Body Corporate consent to the installation of the shutters prior to installing the shutters, pursuant to By-law 9(a)(vii). As no consent was sought or given, the installation was in breach of the by-laws. The Committee was not required to consider the merits or justification of the shutters because they had not been asked to consent to them. In the circumstances, I have no evidence that the Committee decision to issue a contravention notice in regard to the shutters was invalid or unreasonable.

I agree that AWB had a conflict of interest in relation to the vote on that matter. Section 34(1) and (2) of the Standard Module provide that if a person has a direct or indirect interest in a matter being considered by the committee that would conflict with the performance of their duty about the issue, they are not entitled to vote on the issue. AWB had a clear, direct interest in the installation of shutters in the lot that he lived in and whether his wife was issued a contravention notice. However to suggest that all other Committee members had a conflict because they were lot owners is absurd – on that basis most committee members would never be able to vote. Moreover, even if AWB’s vote had been allowed, it would have made no difference to the outcome.

Next step

The fact that the shutters were installed without consent does not prevent the applicant now seeking consent. Although consent could normally be given by the Committee, in light of the history I consider the matter best handled through the relative formality of a general meeting.

By-law 9(a)(vii) does not prevent works and structures that change the appearance of the scheme. Rather, it allows them with consent. This gives the Body Corporate a discretion which it must exercise. In considering the request, the Body Corporate must act reasonably.^[7] I do not consider that the fact that approval was not sought before the shutters were installed, or the history of this application, or interpersonal issues between owners, or any unrelated disagreements in the scheme, would be relevant considerations in a reasonable decision.

It will be relevant to consider the extent of the change to the appearance of the scheme and whether that is adverse to the interests of owners in the context of any other changes or features of the scheme’s appearance (including but not limited to existing blinds and shutters).

There are allegations by the applicant (although no evidence was presented), that shutters and blinds were installed by owners rather than the developer.^[8] Owners should consider whether there has been any previous acquiescence by the Body Corporate in not enforcing the by-laws against others who have erected structures or undertaken works without consent, such that it would be discriminatory to refuse a similar request from the applicant. Any pattern of failing to enforce the by-laws generally may also be relevant in considering whether it would be discriminatory to refuse the shutters, although movable items such as pot plants and washing would seem to be very different in nature to fixed shutters.

Finally, owners should consider if the applicant has justifiable security concerns for, even if they do not share those concerns, and whether the shutters are a reasonable means of addressing those concerns in light of their nature, location and the other security features of the lot and the scheme.

AGM Motion – handyman

The parties agree that no formal resolution was passed in regard to the ongoing casual employment of Newman. There is no reason why, when an issue is raised by an owner at a general meeting (although properly it should have been raised in general business), owners present could not discuss the issue and express their preferences. This does not have effect as a formal resolution but can guide action that the Committee or Body Corporate takes in the future.

In my view the minutes do not imply that a motion was considered or passed, as the form of the notation is clearly different from the form for motions. Accordingly, I see no reason to order that the minutes be amended in regard to this matter.

AGM Motion – painting and repairs

The applicant has not sought orders in regard to the withdrawal of the original motions regarding painting. If submitted by the Committee, there is prima facie no reason why the Committee could not decide to withdraw the motions although it might have been more logical to allow the vote to proceed and then, if lost as expected, discuss alternative options that the Body Corporate or Committee could progress and approve at a later general or committee meeting.

I do not consider that the Chairperson had any obligation to personally discuss the painting with the applicant prior to the AGM, particularly as he had sent an email to owners about the action he had taken. If the applicant had concerns, the onus was on her to raise those before or at the AGM.

There is a query over whether the applicant’s motion about painting should have been included on the agenda (as part of a motion with alternatives with the other painting motion) even though it had been overtaken by the obtaining of quotes. It is unclear whether the Committee contacted the applicant to indicate the motion it intended to submit and ask if she wished to proceed with her motion regardless. However the applicant has not sought orders in this regard and so I have no basis to pursue that matter.

The key question here is whether a motion was passed at the AGM to engage Newman to undertake the two maintenance jobs. Clearly the answer is no. Pursuant to section 52(5) a general meeting may pass a resolution on a motion only if the motion is included on the agenda and voting paper, unless it is a procedural motion or amendment. There was no motion to that effect included on the agenda and the minutes do not record a formal resolution.
The purported motion could not have been an amendment to the painting motion as clearly the painting motion was withdrawn and the substance of any amended motion would have been substantively different. As there was no formal voting on the motion, there is no capacity to verify the alleged voting (although no party has disputed it).

Although the formal procedure was not followed, it does seem that the Body Corporate acted in good faith believing that all owners had agreed to the Newman quote. The applicant has given no explanation as to why she agreed to the quote if she was uncertain about it. She has provided no objective evidence to support her claims that the work was not required, or has impacted on the ability to rectify other alleged problems, or was otherwise unreasonable. She has not substantiated that owners have been disadvantaged by the work being carried out. I have no evidence to suggest that 5 of the 6 owners do not continue to accept the expenditure. Therefore there is no reason why a motion could not be submitted to the next general meeting of the scheme seeking to ratify the engagement and expenditure.

While there was no valid resolution approving the Newman quote, the work has been done and the funds expended. It would be expensive for the Body Corporate to ‘undo’ the work, even if that was possible. Pursuant to section 310 of the Act, there is no indication that Newman did not act in good faith such that the Body Corporate would be bound by the engagement regardless of any defect in the authorisation of the Body Corporate to enter into the transaction.

Putting aside the issue of whether an adjudicator has the authority to require a Committee member to pay for expenditure that was not properly authorised, I can see no justification for such an order in this case. There is no evidence that the Chairperson acted unilaterally in deciding to engage Newman. The applicant does not dispute that all owners agreed, at least verbally, to the work. While the Chairperson directed Newman to proceed after the initial stop work, on the material before me this was not unreasonable (albeit that both the stop work direction and the resumption direction should have been made by the Committee as a whole and not the BCM or Chairperson). The applicant does not dispute that the work had been commenced when she advised them that she was lodging a dispute resolution application. However the mere lodging of an application, even an interim order application, does not require a Body Corporate to take or cease any action – such a requirement only arises if and when an order is issued by an adjudicator.

Although my decision in this regard does not turn on it, I note that both parties seem mistaken in regard to the major spending limit for this scheme. Sections 103 and 104 of the Standard Module provide controls on Body Corporate spending. In this scheme the Committee can approve spending for projects with a total cost of up to $750 (6 lots x the committee spending limit of $125 per lot). Spending over that amount must be approved by all owners or at a general meeting. Expenditure over $1,500 (6 lots x the major spending limit of $250 per lot), normally requires two quotes to be provided with the notice of meeting. I do consider that Newman’s quote can be logically read as a quote for two entirely separate jobs. As such the balcony work ($734) was within the Committee spending limit and could have been approved by the Committee through the proper Committee voting processes. The repair and painting job ($1,540) was slightly above the major spending limit and so two quotes for that task should have been presented to a general meeting before this work proceeded.

Election of Chairperson

The parties agree that the notice inviting nominations was sent out two weeks prior to the end of the financial year, rather than three to six weeks.^[9] The applicant has not sought to invalidate the entire election on this basis. Had the election proceeded as usual, it is arguable whether that defect would have been sufficient to invalidate the entire election process. However, I consider that opening nominations for all positions, given that all owners were present, was a reasonable course of action in the circumstances and ensured that no owner was disadvantaged.

The key issue here is whether the nomination for Chairperson was in fact opened to nominations, as the Body Corporate claims, or not as the applicant claims. The Body Corporate submission would appear to be based on the view of the Chairperson and Secretary. No other owner has corroborated either version and I have no basis upon which to test the veracity of each version.

Ultimately the issue is whether any disadvantage has been suffered by any owner. The applicant claims owners have been disadvantaged by not being able to nominate for Chairperson. However she gives no indication that she or her husband or any other person wished to nominate for the position. No owner has made a submission indicating that they were not able to nominate.

Even if the Chairperson did not open the position to nominations, which has not been proven, I have no evidence that anyone who wanted the position was disenfranchised. Accordingly there is no reasonable basis for me to make any order on this issue.

Other issues

Appointment of administrator

The decision to appoint an administrator to take over the running of a scheme is a significant step which adjudicators do not take lightly. It would not only deprive the right of owners to agree on a committee to administer the scheme on a day-to-day basis, it could have a significant cost impact particularly when the administrator would need to be paid in addition to an existing BCM. The applicant has not actually nominated an administrator for appointment. At this stage I do not see clear evidence of a substantial breakdown in the functioning of the Body Corporate that would warrant the appointment of an administrator.

I note that the Chairperson and all other Committee members are bound by the Code of conduct for committee voting members^[10]. If owners consider that a Committee member has breached the Code they can pursue the removal of the member for that breach.^[11] Owners can also choose to appoint an alternative person for the position at the next AGM.

I would also remind all owners that neither the BCM or the Chairperson or any other Committee member has any independent decision-making power. Committee members can only act in accordance with resolutions passed at a properly convened Committee meeting or voting outside a Committee meeting^[12], unless there is a general meeting authorisation for the action. The BCM can only act in accordance with direction of the Committee (as a whole, and not usually the direction of an individual Committee member) or a general meeting resolution. The proper convening and minuting of Committee meetings should address any concerns or perceptions that individual Committee members are acting unilaterally or with undue influence.

Claim for costs

Section 270(1)(c) of the Act provides that an adjudicator may dismiss an application if satisfied that the application is frivolous, vexatious, misconceived and without substance. If an application is dismissed on that basis, section 270(3) empowers an adjudicator to award costs incurred by the respondent in defending an application without merit. The Body Corporate has asked that costs be awarded. However the application was not without merit and so it would not be appropriate to dismiss the application entirely.

In regard to the applicant’s claim that the Body Corporate pay her application fees, it is a settled matter that adjudicators have no power to award a parties costs in relation to a dispute resolution application (except in the case of section 270(3) as outlined above or section 280 which may apply if a respondent fails without reasonable excuse to participate in conciliation).

Respondent submission

I do not consider that the applicant’s complaint regarding the engagement of a solicitor to act for the Body Corporate is any basis to reject the submission in its entirety. Section 269 of the Act provides that adjudicators must observe natural justice and are not bound by the rules of evidence. The principles of natural justice require the respondent’s views to be taken into account even if there is some potential irregularity in the way that the submission was procured. I have no evidence that the contents of the submission are unsound because of the alleged irregularity and the applicant has had the opportunity to respond to the submission.

It is open to the any owner with concerns regarding the authorisation to engage the solicitor or the expenditure on the solicitor to pursue that matter separately.

Conclusion

I have no evidence that the Committee decision to issue a contravention notice in regard to the shutters was invalid or unreasonable. I agree that the applicant should have sought Body Corporate consent prior to installing the shutters, pursuant to By-law 9(a)(vii). As no consent was sought or given, the installation was in breach of the by-laws.

However, the applicant can now apply for consent. I propose to order that the applicant may submit a motion seeking consent for the shutters to the next general meeting. While I understand there may not yet be any general meeting scheduled until the 2008 AGM, I do not consider that there is any particular urgency in deciding the matter. However it is open to Body Corporate to call an extraordinary general meeting to consider the issue (and any other matters). The applicant can submit an explanatory note with her motion giving her reasons for requesting consent.^[13]

Owners should consider any motion only on the merits of and justification for the shutters. Owners should be aware that if the Body Corporate does not approve the shutters, it would be open to the applicant to seek to overturn the resolution. If the applicant claimed that it was unreasonable for the Body Corporate to refuse the motion, she would need to substantiate that claim.

In the event that the resolution is not passed at the next meeting (or the applicant does not submit a motion on the matter to the next meeting), the applicant will be required to remove the shutters within two months of the date of the next meeting. It does not seem likely that the installation of the shutters have damaged the membrane in Lot 2’s balcony, or in the balcony of the lot above. However I will order that the applicant must make good any damage that has been caused and so she will be responsible for ensuring that both membranes are in tact.

The second aspect of the application relates to the issues at the AGM on 22 June 2007. To ensure all owners are clear, I will make a declaration confirming the submissions of both parties that no resolution was passed in regard to the ongoing employment of Newman as a handyman in the scheme. However I see no basis to order that the minutes be amended.

I am also of the view that no valid resolution was passed in regard to the acceptance of the Newman quote for two specific maintenance jobs. I have made a declaration to this effect. The Body Corporate is entitled to seek to ratify this expenditure at its next general meeting. As the minutes do not indicate a formal resolution, there is no basis to amend the minutes.

In regard to the Committee elections, even if the applicant’s version of events is correct (and I have no basis to verify which version is correct), there is no evidence that any owner wished to nominate for the position of Chairperson and so no evidence that any actual disadvantage was suffered by any owner. Accordingly this aspect of the application is dismissed.

^[2] BCCM Form 10, pursuant to section 182 of the Act
^[3] See sections 227, 228, 276 and Schedule 5 of the Act
^[4] By-law 12 relates to management rights and letting of units

^[5] The suggestion of potential damage to the waterproof membrane in the balcony of Lot 2 and Lot 4 is not relevant to this issue. As this scheme is a building format plan of subdivision, pursuant to section 49C(4) of the Land Titles Act 1994, the boundary of a lot with another lot or common property is at the centre of the wall, floor or ceiling. However, section 109(2)(a)(iii) of the Standard Module provides that the Body Corporate is responsive for roofing membranes that are not common property but that provide protection for lots or common property. Therefore, if the balconies provide roofing protection for the lot or common property below, the Body Corporate would be responsible to maintain them even if they are part of the lot.
^[6] http://en.wikipedia.org/wiki/Window_blind
^[7] Section 94(2) of the Act

^[8] I note that if an item has been appropriately approved, the replacement of that item with a like item (for example because the original has worn out or is faulty) would arguably not require further approval because there would be no further change to the appearance of the building.
^[9] Section 13(4) of the Standard Module
^[10] Schedule 1A of the Act
^[11] See section 25AA and 25AB of the Standard Module
^[12] See sections 27 to 35 of the Standard Module
^[13] See section 42C of the Standard Module for the requirements for explanatory material.

Number of Scheme:	26844
Name of Scheme:	Callaways
Address of Scheme:	24 Maloja Avenue CALOUNDRA QLD 4551

	The Committee was entitled to pass a motion to issue the contravention notice, the motion was a valid motion, and there are no grounds to revoke the motion;
	The applicant’s husband was not entitled to vote as he had a clear conflict of interest;
	The suggestion that all other Committee members had a conflict of interest is absurd and displays a misunderstanding of section 34 of the Standard Module;
	At no time prior to installation of the shutters did the applicant seek approval of the Body Corporate for the installation of the shutters, which is a breach of the by-laws;
	The shutters significantly alter the external appearance of the building from Maloja Avenue;
	The applicant’s photographs are misleading, and alternative photographs are provided;
	By-law 3 is not relevant because the balcony of Lot 2 and the shutters are entirely contained within the boundaries of Lot 2 and By-law 3 relates to common property only;
	The shutters are not security shutters;
	The applicant’s submissions regarding security issues are exaggerated and misleading;
	Security incidents of the nature that occurred are not unusual for this type of scheme and have been addressed in a timely and responsive manner;
	The applicant clearly decided to purchase the shutters before moving into the scheme and now is attempting to justify them on purported security inadequacies;
	As Lot 2 has ‘Crimsafe’ doors fitted to its balconies, the interior of the lot is secure and the shutters only secure the balcony, so the shutters are not justified on security grounds;
	At no time before or at the AGM did the applicant or her husband raise concerns or make comments about security issues in the scheme or the proposed shutters;
	The pot plants and clothes on other balconies are not ‘works or structures’ covered by By-law 9(a)(vii), and there is a distinct difference between these and installed shutters;
	As far as the Body Corporate is aware, all other external shutters and screens in the scheme were installed by the developer;
	The shutters have remained closed for the majority of the time since their installation; and
	Because the shutters are fixed to the floor and ceiling of the balcony it is possible that the waterproof membrane in the balconies of Lot 2 and the unit above have been damaged. Accordingly, they seek orders that the shutters be removed and that the applicant pay for any costs involved in repairing and replacing any damage to the waterproof membrane.

	She disputes that the by-laws require Body Corporate approval for the shutters, as approval is subjective and consent is objective. She did not seek approval as it was not required;
	By-law 9(a)(viii) does not apply as the shutters are not blinds or curtains under By-law 13, and the two by-laws must be read together with By-law 13 narrowing By-law 9(a)(viii);
	The Body Corporate owed a responsibility to discuss the alleged by-law breach before issuing a contravention notice. The failure to do so was a breach of natural justice and the resulting decision was flawed;
	The suggestion that the shutters may have damaged the waterproof membranes concedes that the shutters are affixed to common property and so By-law 3 does apply;
	The Body Corporate’s photographs are incomplete and misleading;
	She moved into Lot 2 on 2 April and did not decide to install the shutters until 1 May;
	She understands that while some shutters and blinds were installed in the original development, a sun blind in Lot 2 was replaced by a previous owner without consent in 2000 and 2003, and cream shutters were installed on the western balcony of Lot 2 by a previous owner without consent, so the Body Corporate has waived any claim to require consent;
	She asked the shutter installer whether the installation would affect the waterproofing and was told that the screws were not long enough to penetrate the membrane, but silicon sealant was used to seal the tracks so water would not penetrate; and
	She disputes the claim for compensation as she says she has acted reasonably and attempted to resolve the dispute, and the Chairman escalated the cost by retaining a lawyer.

	No formal resolution was passed about utilising the services of Newman;
	Newman has been engaged on a casual basis to undertake various tasks and the Body Corporate does not have and or need a formal contract;
	In response to AWB’s comments, the Chairperson asked owners to indicate whether they wished to change the current arrangements and the majority said no; and
	The confirmation of the status quo was noted in the minutes.

	Painting of the scheme was discussed informally at the 2005 and 2006 AGMs and as a result quotes for various work were sought by the Chairperson for the 2007 AGM;
	After the meeting notice was issued some owners the contacted the Chairperson with concerns about the cost, and so he thought the painting motion would probably be lost;
	Prior to the AGM the Chairperson contacted Newman to seek a quote to undertake some immediate repairs. The Chairperson advised all owners of this action prior to the AGM;
	An inspection of the building was undertaken with Newman and all owners;
	Following comments during the inspection, the Chairperson withdrew the painting motion;
	At the AGM all owners agreed to engage Newham to undertake two unrelated maintenance tasks (first, sealing balcony tiles and cleaning and painting the balcony edges, and second, cleaning, filling and painting a fence, garbage compound and gate house);
	Each of the items was below the major spending limit so additional quotes were not required;
	Even if correct procedures were not followed, decisions should be preserved unless there is some fundamental disadvantage to owners;
	The unanimous decision of owners at the meeting should not be altered because the applicant later changed her mind;
	The suggestion that the Chairperson failed to consult owners is denied; and
	The suggestion that the Chairperson rushed the work through despite notice of the dispute is denied. On 12 July 2007 the BCM notified owners that the work would start the next week, so when the applicant emailed owners the work was largely complete. Newman was initially asked to put the work on hold, but he was then asked to proceed because all owners had supported the work, the Body Corporate had a paramount maintenance obligation, there were no grounds to cancel the engagement, and no orders had been issued.

	She disputes the version of events claimed by the Body Corporate;
	The Chairperson did not discuss the painting with her and had clearly made up his mind prior to the AGM without consultation;
	The waterproofing work was outside the scope of work for a handyman and it was negligent to employ and unskilled person on a patch-up job;
	The minutes record the quote as for one job, not two;
	The inspection and meeting were not conducive to asking questions, insufficient time was given to consider the painting, and she had not been aware that the scheme had not been painted for at least 9 years; and
	The patch-up job benefited owners wishing to sell at the time but did not reduce the expenditure that will be required to paint the building.

	Although the end of financial year is 30 April, a delay in finalising the AGM date meant the notice seeking committee nominations was not sent until 16 April;
	The applicant lodged a form before the due date nominating AWB for ordinary member. Nominations from Lot 1 and Lot 3 were received after the due date and rejected;
	The BCM advised the AGM of the delay with the notice inviting nominations;
	In light of the circumstances and given all owners were present at the AGM, the Chairperson suggested that all positions be declared open and nominations be called from the floor;
	The Chairperson invited nominations for chairperson and declared his willingness to stand. No other nominations were received;
	Stephenson had nominated for secretary/treasurer and when AWB queried if he wanted both jobs he said ‘I suppose not’. There being no other nominations, Stephenson was elected Secretary. AWB nominated himself for Treasurer, although not entitled to, and was elected;
	All owners had equal opportunity to nominate for every position and to vote on nominations and the process followed substantially complied with the legislative required; and
	The applicant has presented no grounds to justify the appointment of an administrator.

1.	any locking or other safety device for protection of its lot against intruders; or
2.	any screen or other device to prevent entry of animals or insects upon its lot.

Queensland Body Corporate and Community Management Commissioner - Adjudicators Orders

Callaways [2007] QBCCMCmr 701 (20 December 2007)