Focus [2008] QBCCMCmr 190 (5 June 2008)

Number of Scheme:	12996
Name of Scheme:	Focus
Address of Scheme:	114 The Esplanade SURFERS PARADISE QLD 4217

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

I hereby declare that resolution 3 of the extraordinary general meeting of 10 August 2007 relating to the engagement of a service contractor and the committee resolution of 4 September 2007 relating to the building of a room as a base for carrying out caretaking duties are, and were at all times, void and of no effect.

Focus Community Titles Scheme (Focus) is a 125 lot scheme under the Body Corporate and Community Management Act (Act) and the Act’s Accommodation Module Regulation (Accommodation Module).

This is an application by Laurie Doorey, an owner of lot 78 (applicant) against the body corporate for Focus (respondent).

The applicant seeks orders to invalidate a motion passed at the extraordinary general meeting of 10 August 2007 that is alleged to purport to authorise the body corporate to engage Sigiri Partnership (Sigiri) as service contractor and also a motion passed by the committee on 4 September 2007 that is alleged to purport to create an exclusive use area or occupation authority for the benefit of Sigiri.

The applicant says that motion 3 purported to engage a service contractor for the scheme at a cost of over $175,000 per annum without compliance with requirements of the legislation, including the requirement that the material forwarded to owners for the general meeting contain the terms of the engagement (Accommodation Module, 85).

Further, the applicant says that the committee accepted the quotation for the building of a basement storeroom and that a letter from Sigiri to the body corporate manager stated "It was agreed that the old children’s playground area in basement 2 not allocated by the body corporate for any specific purpose be utilised for the construction of a secure room to relocate the security surveillance equipment, store body corporate records and provide a base to carry out common property caretaking/maintenance duties". It is submitted that the committee is therefore attempting to create an exclusive use area or occupational authority for the service contractor, which can only be done by resolution of owners in general meeting (Accommodation Module, 89(7)).

Submissions on behalf of the body corporate were to the effect that the committee was aware that a detailed and lengthy contract would need to be prepared and submitted by the preferred service provider and that the motion being challenged by the applicant was only a preliminary step to determine whether lot owners wished to bundle the services and, if so, indicate which of the three quotations might be acceptable to lot owners. It is further submitted that the committee resolution proposing to build a store room was not intended to create exclusive use or an occupation authority. Rather, it is submitted that the body corporate requires space to store old records and that a space away from the office area controlled by the existing service provider, Focus Owners Limited (FOL), is needed to locate security equipment. However, it is submitted that use of the area in question is under dispute with FOL and construction has not proceeded.

Other owners have also provided submissions. All submissions are available for the parties to inspect upon request and it is unnecessary for me to summarise these submissions here.

An adjudicator must make an order that is just and equitable in the circumstances to resolve certain disputes in the context of community titles schemes (Act, 276).

To some extent, it is questionable whether there is any real dispute disclosed by the present application. The applicant disputes the validity of two motions that the applicant alleges purport to authorise the committee to do things that should only be properly authorised by owners in general meeting after following the procedures set out in the legislation. However, submissions on behalf of the committee are to the effect that the motions do not purport to do what the applicant alleges and, in any event, have not been relied upon or implemented by the committee.

Having considered the submissions, I am of the opinion that the dispute about the meaning of these two motions is fairly trivial and I am surprised the parties could not resolve the dispute themselves. On one hand, it should have been obvious to the applicant that the committee was not relying upon the resolution 3 of the extraordinary general meeting of 10 August 2007 (service contract resolution) as a resolution that would have authorised the appointment of Sigiri for more than one year. Further, in respect of the committee resolution of 4 September 2007 (store room resolution), the committee could have easily avoided the present dispute by revoking the resolution if it was obvious that the resolution would not be implemented in the foreseeable future.

However, it is now necessary to determine the application for the purpose of deciding just and equitable orders. In terms of the service contract resolution, accepting the applicant’s submissions would render the resolution invalid and accepting the committee’s submissions would render the resolution pointless. At best, the motion is confusing and I am satisfied that it does not amount to a legitimate decision of the body corporate. I therefore consider it just and equitable to declare the resolution void. In terms of the store room resolution, the resolution on its face proposes the creation of a base to carry out common property caretaking/maintenance duties and the circumstances indicate an intention that a service contractor be given the right to occupy the area for the purpose of their engagement. I note that the legislation provides that a service contractor or letting agent may acquire rights to occupy part of the common property for the purpose of the service contractor’s engagement or letting agent’s authorisation only by a specific process including approval by owners passing a resolution in general meeting. Given all the circumstances, including the limitation on a service contractor acquiring rights to occupy part of the common property except by ordinary resolution, I am satisfied that it is just and equitable to also declare this resolution void.

For these reasons, the applicant is successful in its application and I make the order above.

I note that some submissions indicated a significant level of dispute at the scheme involving allegations that the committee is regularly exceeding spending limits and is engaging Sigiri to provide duplicate services on a month to month basis. However, the orders sought in the present application have little bearing on any real dispute about the engagement of Sigiri on a month to month basis given any appointment of Sigiri on a month to month basis is presumably based on separate resolutions passed from time to time by the committee. Such matters were not the subject of the present application and it is not clear whether or not there is any substance to the allegations that the committee is acting improperly. However, I would encourage the committee to closely monitor spending generally to ensure that spending is compliant with legislative limits as well as with the body corporate’s budgets and to be able to provide owners an opportunity to vote in general meeting whenever legislative limits are exceeded or budgets need to be readjusted.

Queensland Body Corporate and Community Management Commissioner - Adjudicators Orders

Focus [2008] QBCCMCmr 190 (5 June 2008)