Riverside Mooloolaba [2008] QBCCMCmr 109 (2 April 2008)

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

I hereby order that the resolution for the Special Levy at the EGM held on 28 April 2007 was invalid and any payments previously made by owners of Lots 1, 2, 3, 4, 5 & 6 should be credited against other Body Corporate payments due or to become due.

I further order that the Body Corporate forthwith issue notices for levies sufficient to cover all the costs associated with the removal of the roof edge parapets and replacement with the glass balustrade to be paid equally by the owners of Lots 7, 8, 9 and 10.

I further order that the application is otherwise dismissed.

I further order that the Body Corporate for Riverside Mooloolaba shall provide to all owners within seven (7) days of the date hereof a copy of this order and the statement of reasons.

Riverside Mooloolaba community titles scheme (Riverside) consists of ten residential lots and common property. The scheme was established upon registration of Building Units Plan 7990 (now described as a building format plan) on 31 August 1987 and is regulated by the Body Corporate and Community Management (Standard Module) Regulation 1997 (Standard Module).

Pursuant to the Body Corporate and Community Management Act 1997 (Act), this application was made by Mr Francis (Frank) Wilson, owner of Lot 3 (applicant) on 6 November 2007. The applicant sought orders against the Body Corporate for Riverside (respondent) in the following terms:

Under section 243 of the Act, a copy of the application was provided to the Body Corporate, with an invitation to the Committee and all owners to respond to the matters raised in the application. Submissions were received from the Body Corporate committee and six of the ten lot owners as follows:

A dispute resolution recommendation was made referring the dispute to departmental adjudication.

The applicant provided detailed grounds and material in support of his application. All owners have had an opportunity to view this material and I consider it unnecessary to repeat that information in detail here. However, for the record, the facts of the dispute as outlined in the application and submissions can be summarised as follows:

Consequent upon a prior dispute resolution application 0369-2007 by the present applicant, an order was made on 23 May 2007 that:

the body corporate may proceed with the removal of the low masonry balustrade and the replacement with a frameless glass balustrade as resolved at the extraordinary general meeting held on 28 April 2007.

The basis of that order was a request by the applicant for an order, inter alia:

That the purported resolution by the body corporate at the extraordinary general meeting on 28/4/2007 to remove existing balustrades (which are the structural elements which define exclusive use areas) and parapets and replace them with glass balustrades at the rooftop edge is ruled invalid and struck out.

The resolution in question comprised agenda item 3 of the Extraordinary General Meeting (EGM) held on 28 April 2007 which was confined to the carrying out of the subject work and did not deal with payment of the cost of same. The latter was in fact the subject of agenda item 4 of the EGM held on 28 April 2007, expressed as follows:

SPECIAL LEVY: RESOLVED by ordinary resolution that a Special Levy be raised for the removal of the existing white rail and replacement with the glass balustrade in an amount of $24,475.00 (gross) $19,580.00 (net) which equates to $2,447.50 (gross) $1,958.00 (net) per contribution lot entitlement, to cover the shortfall in available funds in the sinking fund, and further that the levy is to be due and payable within one month of the issue of the Levy Notice by the Body Corporate Manager.

In other words, for purposes of the prior dispute resolution application, in the event that the applicant’s request for an order invalidating EGM item 3 was unsuccessful, no order to the effect that the four roof-top owners pay for the cost of the subject works was sought or made. That being the case, the raising of funds to cover the cost of carrying out the subject works pursuant to the order of 23 May 2007 proceeded in accordance with the further and separate resolution passed pursuant to EGM item 4 on 28 April 2007.

Notwithstanding the latter, and for purposes of the present application, the applicant produced evidence in support of an undertaking by the owners of Lots 7, 8, 9 and 10 (the four roof-top owners) to pay for the subject works. Such evidence comprised:

“It was clearly explained by me to F R Wilson at the EGM (on 28 April 2007) that the four roof top owners had agreed subsequent to the notice of meeting, to bear the costs for installing the safety barrier and that their payment would include him.

... I believe the gesture for payment of the roof top owners is generous...” (emphasis added)

Submissions received from two non-roof top owners, Mr Brian Davis owner of Lot 5 and Jane Maclean owner of Lot 6, in support of the present application similarly referred to and relied upon the prior agreement of the four roof-top owners to pay for the subject works.

A submission received from David and Elizabeth Deane, owners of Lot 2, whilst critical of the applicant, favoured the making of an order other than simple rejection of the order sought by the applicant (in which case non-roof top owners may be substantially worse off) or granting of the order sought by the applicant (in which case the four roof-top owners would be “very unfairly treated”). Consistent with the principle of payment by the four roof-top owners for the subject works, Mr and Mrs Deane proposed an order the terms of which would provide:

According to Mr and Mrs Deane, a proposal similar to this in broad terms received the unanimous support of all owners (including the applicant) at the November 2007 Annual General Meeting but was subsequently rejected by the applicant.

Submissions received from three of the four roof-top owners (the owner of Lot 7 did not make a submission) and the Body Corporate Manager opposed the present application on the ground that it is frivolous and vexatious. In this regard, the submissions place reliance upon the following:

The applicant provided an itemised list of 15 actions, five of which arose in the context of the subject matter of prior dispute resolution application 0369-2007, that are attributable to Teys Strata (Sunshine Coast) Pty Ltd in its capacity as Body Corporate Manager (BCM) and that, according to the applicant, demonstrate a lack of impartiality and integrity or otherwise may have constituted one or more unspecified breaches of the Act and associated regulations and legislation.

By way of alternative to the order sought, that is, the Body Corporate counsel the BCM and associated entities, the applicant proposed that the Office of the Commissioner for Body Corporate and Community Management (Commissioner’s Office) provide the BCM with education and information in the form of counselling.

Rather than individually address each of the actions itemised by the applicant, the BCM, adopting the submission of the owners of Lot 10, James and Heather Leedman, countered with a general assertion that “Teys Strata (Sunshine Coast) have acted with extraordinary sensitivity and tact given that they have had considerable provocation and are insulted by Frank Wilson on a regular basis... On 23 November 2007 they were reappointed to act as the body corporate managers by a vote of 8 with one abstention”. The BCM otherwise submitted that the applicant’s claims in this regard, like those above, should be viewed as frivolous and vexatious. In this regard, the BCM described the applicant’s itemised list of actions as merely symptomatic of the position adopted by the applicant questioning the professionalism and integrity of the BCM whenever any issue arises with which he disagrees.

The application evidences a dispute between the owner of a lot included in a community titles scheme and the Body Corporate for the scheme. I am satisfied that this is a matter that falls within the legislative dispute resolution provisions.[2]

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

(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 subject matter of the present application is the motion/resolution to raise a Special Levy sufficient to cover payment of the cost of carrying out the works required to remove existing balustrades and parapets and replace them with a glass balustrade.

The agenda for the EGM held on 28 April 2007 in fact listed two motions relevant to the subject of the removal of existing balustrades and parapets and replacement with a glass balustrade, the second being contingent upon the first being carried: item 3 comprising a motion that the Body Corporate approve expenditure for the carrying out of the work; and item 4 comprising a motion that a Special Levy be raised to cover the shortfall in available funds in the sinking fund in order to pay for the work in question. It is trite that separate resolutions were required in respect of each of these motions. In the event, the first motion being carried, and affirmed by the Order made in respect of dispute resolution application 0369-2007, the second motion was also carried.

By way of dispute resolution application 0369-2007, the present applicant sought numerous orders of which the following two only are relevant for present purposes:

An urgent order is issued to the Body Corporate Riverside CTS 7283 requiring that no action is taken in regard to a purported resolution to remove existing rooftop balustrades and parapets and replace them with glass balustrades at the rooftop edge pending resolution of this dispute application.

In other words, in the context of dispute resolution application 0369-2007, in the event that the applicant’s request for an order invalidating EGM item 3 (confined to the carrying out of the works in question) was unsuccessful, no order was expressly sought by the applicant in respect of the separate but related resolution concerning payment of the cost of carrying out the works. That being so, the question arises as to what significance, if any, did that have in terms of the Order made on 23 May 2007 in respect of dispute resolution application 0369-2007?

“... the body corporate may proceed with the removal of the low masonry balustrade and the replacement with a frameless glass balustrade as resolved at the extraordinary general meeting held on 28 April 2007.”

In arriving at such determination, I note that the Adjudicator’s reasons were confined to safety considerations on the basis of which the adjudicator concluded:

“... I am further satisfied that the motion considered by owners at the extraordinary general meeting held on 28 April 2007 was properly resolved by ordinary resolution to the extent that it related to the replacement of the low masonry balustrade with a frameless glass balustrade.....

I propose to order that the motion authorising the removal and replacement of the low masonry balustrade was validly passed at the meeting held on 28 April 2007....” (emphasis added)

I am of the view that the motion/resolution dealing with the carrying out of the work in question necessarily involved a range of considerations independent of the motion/resolution dealing with payment of the cost of same. In order to be satisfied that the latter was the subject of determination along with the former in prior dispute resolution application 0369-2007, one would reasonably expect there to appear in that determination and the reasons therefore reference to and discussion about the evidence, including any submissions received from the parties, relevant to the latter. Moreover, in the absence of evidence that parties whose interests may be adversely affected by an Order in respect of the latter were specifically afforded a reasonable opportunity to make submissions in respect thereof, I am of the view that the subject matter of the present application, specifically, the raising of a Special Levy sufficient to cover payment of the cost of carrying out the works in question, was not determined in prior dispute resolution application 0369-2007.

The motion for a Special Levy considered by the owners at the EGM held on 28 April 2007 was as follows:

There is no evidence in the material provided in support of the present application or in the submissions of any irregularity in the procedures adopted for the EGM held on 28 April 2007. In the absence of such evidence, I regard as relevant and adopt the observations and finding of the Adjudicator in prior dispute resolution application 0369-2007:

The meeting (EGM on 28 April 2007) for which (the applicant) claims insufficient notice was given was attended by every owner, either in person or by voting paper. Accordingly, even if insufficient notice was given, which I do not accept, then there is no evidence of any disadvantage to any owner.

Accordingly, to the extent that it required equal contribution by all lot owners to pay for all the costs associated with the carrying out of the subject works, I am satisfied that the above motion considered by owners at the EGM held on 28 April 2007 was properly resolved by ordinary resolution. As such I am satisfied that the resolution was a valid resolution of the meeting.

The Body Corporate is charged with the responsibility to administer, manage and control the common property and body corporate assets for the benefit of lot owners included in a community titles scheme. In doing so, as a general principle, the Body Corporate must act “reasonably”.[4]

Notwithstanding my finding that the resolution for a Special Levy carried at the EGM held on 28 April 2007 was a valid resolution of the meeting, it is open to me, if I consider it just an equitable in the circumstances, to make an order requiring contribution other than in equal proportion by all lot owners for all the costs associated with the carrying out of the subject works.[5] In other words, if satisfied that a contribution levied on lot owners, or the way that it is to be paid, is unreasonable, it is open to me to make an order varying the contribution to a reasonable amount or providing for its payment in a different way.[6]

In effect, the orders sought in the present application are founded on the proposition that it was unreasonable to require any contribution by the owners of Lots 1, 2, 3, 4, 5 and 6. In support of that proposition, there is evidence before me of undertakings by the owners of Lots 7, 8, 9 and 10 (the four roof-top owners) to pay for the subject works.

In this regard, the applicant pointed out that a motion that would have had this effect was considered and lost at the previous EGM held on 17 March 2007. Minutes of that meeting reveal that the subject works, including a condition that the four roof-top owners of Lots 7, 8, 9 and 10 pay for the cost of same, were the subject of a resolution (without dissent) which although defeated (8 votes in favour 2 against) was clearly supported by the four roof-top owners.

Subsequent to that, in further support of the above proposition, the applicant pointed to one of the submissions in response to prior dispute resolution application 0369-2007, that of Mr David Deane, owner of Lot 2, dated 9 May 2007, stating, inter alia:

... I believe the gesture for payment of the roof top owners is generous...” (emphasis added)

Consistent with that prior submission and for purposes of the present application, I note that Mr and Mrs Deane have provided a submission supportive of the principle of payment by the four roof-top owners of the cost of the subject works and conversely that such costs should not have to borne by the remaining six lot owners.

I also note submissions received from two non-roof top owners, Mr Brian Davis owner of Lot 5 and Jane Maclean owner of Lot 6, in support of the present application similarly referring to and relying upon the prior agreement of the four roof-top owners to pay for the subject works.

Submissions received from three of the four roof-top owners (the owner of Lot 7 did not make a submission) and the Body Corporate Manager oppose the present application on the ground that it is frivolous and vexatious. In this regard, it was firstly submitted that the present application is in essence no different to the previous dispute resolution application 0369-2007 rejected by the Order of 23 May 2007. Such submission stands in contradiction to my above finding that the subject matter of the present application, specifically, the raising of a Special Levy sufficient to cover payment of the cost of carrying out the works in question, was not determined in prior dispute resolution application 0369-2007. For that reason I do not accept that the present application is frivolous and vexatious.

It was secondly contended that the present application was frivolous and vexatious given that in making the Order of 23 May 2007, the Adjudicator was persuaded by considerations of safety and reasoning:

“The potential liability for the body corporate if anyone were to fall over the low masonry balustrade and injure or kill themselves is, in my view, absolutely enormous. It defies common sense that an owner faced with that potential liability would not want to have the matter addressed at the earliest opportunity.”

My understanding of the applicant’s position in this regard is that, being a qualified and experienced builder, building consultant and building inspector himself and with reference to certain objective considerations including relevant Building Code provisions governing the pre-existing balustrades and parapets, he sought to challenge not only the bases for any perceived threat to safety, and therefore risk of liability to the Body Corporate, but also the motives of those who sought to advance that position. The fact that the Adjudicator was, on balance, persuaded otherwise does not necessarily detract from the applicant’s honestly held belief in the validity and legitimacy of his position which, whilst respecting the Order of 23 May 2007, he continues to hold. For that reason I do not accept that the present application is frivolous and vexatious.

Nor do I accept that the present application is frivolous and vexatious on the basis that the remarks of Mr David Deane expressed in his submission dated 9 May 2007 in response to prior dispute resolution application 0369-2007, were his own opinion and made without any authority to commit the Body Corporate to any course or to commit any of the other owners to payment of the cost of the subject works. It is readily apparent that Mr Deane was not alone in his understanding that the four roof-top owners had agreed to pay for the cost of the subject works. As already noted above, such understanding is shared by Mr Brian Davis owner of Lot 5 and Jane Maclean owner of Lot 6. But perhaps more telling is that in their respective submissions in response to the present application none of the three roof-top owners deny having expressed agreement to pay for the cost of the subject works. Their only objection, as I understand it, is that such agreement and commitment has never been formalised by way of resolution at a properly constituted meeting of the Body Corporate. However, the available evidence in connection with that agreement, whatever its value or weight, remains for consideration in conjunction with all the other evidence for purposes of the present application.

Lastly, I turn to consider what Mr Colin Snow, owner of Lot 9, refers to in his submission as an unsolicited written offer by the four roof-top owners subsequent to the Order of 23 May 2007 to each pay 25% of the cost of the subject works “subject to simple conditions”. The submission did not elaborate upon the scope of those conditions. Such offer, according to Mr Snow, was unconditionally accepted by all lot owners with the exception of the owner of Lot 5, from whom no response was received apparently because he was experiencing problems with his computer, and the applicant, who sought to impose conditions of his own unacceptable to the four roof-top owners. Mr Snow submits that the present application is frivolous and vexatious in the sense that it is essentially no different to the unsolicited written offer rejected by the applicant with the consequential detriment suffered by all non-roof top owners.

In the absence of more evidence as to the precise terms of that offer and the alleged “unacceptable” conditions that the applicant sought to impose, I am not in a position to be satisfied for the reasons advanced by Mr Snow that the present application is frivolous and vexatious.

I note, somewhat curiously, that whilst opposing the present application, the submission received from the Body Corporate concludes with a statement of conditional agreement for the four roof-top owners to bear the cost of the subject works:

“The four rooftop owners agree to pay for the cost of the glass balustrade if the white rail is removed.”

That statement appears in the context of a request by the Body Corporate for reconsideration of the second aspect of the Order made in relation to prior dispute resolution application 0369-2007.

“... that the white balustrades delineating the exclusive use areas of common property for lots 7, 8, 9 and 10 may not be removed (except temporarily if necessary for the purposes of facilitating the work associated with the removal of the low masonry balustrade) until the body corporate resolves by resolution without dissent to allocate any additional areas of common property on the roof to the owners of lots 7, 8, 9 and 10.”

I refrain for the moment from considering the merits or otherwise of such request. For present purposes I merely note that such expression of agreement, al beit conditional, for the four roof-top owners to bear the cost of the subject works may serve to shed light upon the scope of the “simple conditions” of the unsolicited earlier written agreement to which Colin Snow eluded in his submission. Whether or not that is the case, it serves to provide corroboration for broader acceptance of the principle of payment by the four roof-top owners of the cost of the subject works and conversely that such costs should not have to borne by the remaining six lot owners.

Despite the validity of the resolution for the Special Levy at the EGM held on 28 April 2007 (requiring contribution by all lot owners for all the costs associated with the carrying out of the subject works), the state of the evidence before me reveals overwhelming support by all lot owners before and after the meeting for the principle that the cost of the subject works should not be borne by the six non-roof top lot owners. The application and submissions point to a variety of considerations in accounting for such support, suffice to say that on balance the owners of Lots 7, 8, 9 and 10, by reason of their existing exclusive use and enjoyment of most of the roof-top common property area, stand to gain more by way of, for example, improved safety and enhanced aesthetic and property values over and above that accruing to all other lot owners.

In all the circumstances I am of the view that the contribution levied on owners of Lots 1, 2, 3, 4, 5 & 6 was unreasonable in the circumstances and such lot owners should not have been required to contribute towards payment of the costs associated with the carrying out of the subject works.

Having regard to my above finding that the owners of Lots 1, 2, 3, 4, 5 & 6 should not have been required to contribute towards payment of the costs associated with the carrying out of the subject works, it follows, in my view, that it is just and equitable in the circumstances that all such costs should be borne equally by the owners of Lots 7, 8, 9 & 10.

The applicant lists 15 separate issues arising from the perceived performance of the BCM’s functions as demonstrating a lack of impartiality and integrity or otherwise may have constituted one or more unspecified breaches of the Act and associated regulations and legislation warranting corrective action by the Body Corporate. Of those 15 issues, it is relevant that five arose in the context of the subject matter of prior dispute resolution application 0369-2007 resolved by Order of 23 May 2007. Significantly, my perusal of that determination and the reasons therefore failed to detect any finding or comment adverse to the BCM in terms of any of the matters now raised by the applicant.

It is also relevant that all 15 issues identified by the applicant on the part of the BCM pre-date the Annual General Meeting (AGM) held on 23 November 2007 at which I note the BCM were reappointed to act as the body corporate managers by a vote of 8 with one abstention. Arising from the issues raised by the applicant about the BCM in the context of the present application is an inference that the one dissenting vote at the AGM was that of the applicant.

To my mind, the relevant motion dealing with the appointment of the BCM before the last AGM provided the Body Corporate with the opportunity to take appropriate corrective action in the event of more broadly based concern, other than the applicant alone, and supporting evidence about the performance of the incumbent BCM. The overwhelming majority vote in support of reappointment of the BCM stands in stark contradiction to the pre-AGM performance issues raised by the applicant. Moreover, I note that none of the submissions received in response to the present application are critical of the performance of the BCM or are otherwise supportive of this aspect of the application.

In the absence of evidence that the concerns expressed by the applicant about the performance of functions by the BCM are shared by other lot owners, I am not satisfied that it is just and equitable in the circumstances to make an order that the Body Corporate counsel the BCM and associated entities. In other words, I am not satisfied on the available evidence that the BCM has conducted itself in such a manner as to warrant corrective action by the Body Corporate.

By way of alternative to the order sought, the applicant proposed that the Commissioner’s Office provide the BCM with education and information in the form of counselling.

In association with the statutory responsibility under the Act for providing a dispute resolution service, the Commissioner for body corporate and community management:

(a) lot owners, bodies corporate and other persons who have rights and obligations under this Act to become aware of the rights and obligations...” [7]

The Commissioner’s Office does provide such an education and information service, the primary purpose of which is to respond to inquiries and requests for information relevant to the statutory responsibilities of the Office. In this regard, for example, if approached by the BCM for clarification of its rights and obligations arising under the Act, the Commissioner’s Office would oblige.

However, contrary to the applicant’s apparent perception, the information and education service provided by the Commissioner’s Office does not exist as a defacto counselling service to be administered in an involuntary fashion for the purpose proposed by the applicant. That would be clearly beyond the jurisdiction of the Commissioner’s Office. Accordingly, I do not consider that I have any authority to make an order or recommendation in the nature of the applicant’s alternative proposal.

To the extent of my finding that the contribution levied on owners of Lots 1, 2, 3, 4, 5 & 6 was not just and equitable, I order that:

Reference has been made above to a request, in the context of the submission received from the Body Corporate, for reconsideration of the second aspect of the Order made in relation to prior dispute resolution application 0369-2007. That is:

This request, also appearing in identical terms in the context of the submission received from the owners of Lot 10, James and Heather Leedman, is made on several bases:

Although not explicit, I understand this request as tantamount to seeking an Order the effect of which would result in a further allocation to the four roof-top owners of exclusive use of the small remaining common property area on the roof. Support for such an outcome is also forthcoming in other submissions received, specifically, those of Jane Maclean, owner of Lot 6, Graham Palmer, owner of Lot 8 and David and Elizabeth Deane, owners of Lot 2.

Such a request, however, does not overcome the fundamental problem observed by the Adjudicator in prior dispute resolution application 0369-2007:

“... the applicant has made a valid point in relation to the removal of the white balustrades. These balustrades were erected, as far as I can ascertain from the material, to delineate the exclusive use areas allocated to the respective owners of lots 7, 8, 9 and 10. If they were to be removed, then the exclusive use areas would be difficult to discern from the remainder of the common property. Having said this, the remainder is very small, and it is hard to imagine that it would, on its own, be of any use at all to any of the remaining owners. Be that as it may, the only mechanism for approving a further allocation of exclusive use of common property is by a resolution without dissent.”

The situation has not changed since then. There is no evidence before me of such a motion requiring resolution without dissent having been considered by a general meeting of the Body Corporate. I suggest that as the appropriate course to adopt in an effort to bring to finality the history of disputation regarding these roof-top issues either by way of achieving the required level of consensus or, in the event of opposition that in the circumstances is perceived as unreasonable, a further dispute resolution application provision for which exists under the Act.[8]

[1] See sections 246 and 244 of the Act respectively
[2] See sections 227,228, 276 and schedule 5 of the act
[3] See section 109(1) and (2)(a)(i) of the Act
[4] See section 152(1)(a) and section 94(2) of the Act
[5] See section 276(1) of the Act
[6] See Schedule 5 item 11 of the Act
[7] See section 232(3) of the Act
[8] See section 276(3) and Schedule 5 item 10 of the Act

Number of Scheme:	7283
Name of Scheme:	Riverside Mooloolaba
Address of Scheme:	53 - 55 River Esplanade MOOLOOLABA QLD 4557

Queensland Body Corporate and Community Management Commissioner - Adjudicators Orders

Riverside Mooloolaba [2008] QBCCMCmr 109 (2 April 2008)