Greenview Apartments [2008] QBCCMCmr 349 (29 September 2008)

Last Updated: 14 October 2008

REFERENCE: 0730-2008

INTERIM ORDER OF AN ADJUDICATOR

MADE UNDER PART 9 OF CHAPTER 6

BODY CORPORATE AND COMMUNITY MANAGEMENT ACT 1997

Number of Scheme:	2548
Name of Scheme:	Greenview Apartments
Address of Scheme:	30 Ramsay Street KEDRON QLD 4030

TAKE NOTICE that pursuant to an application made under the abovementioned Act by The Body Corporate for Greenview Apartments, against the owners of lot 1, Luke Whiteland and Richard John Smith

I hereby order that the application for an interim order requiring the owners of lot 1, Luke Whiteland and Richard John Smith to cease all work immediately and present all plans and council approvals to the body corporate to discuss at an extraordinary general meeting to be held in late September or early October 2008 for a special resolution of the body corporate, is dismissed.

STATEMENT OF ADJUDICATOR’S REASONS FOR DECISION - REF 0730-2008

“Greenview Apartments” CTS 2548

The Scheme

“Greenview Apartments” community titles scheme 2548 is a six lot residential scheme subject to
the Body Corporate and Community Management Act 1997 (Act) and the Body Corporate and Community Management (Standard Module) Regulation 2008 (Standard Module).

Application

This application, initially lodged on 29 August 2008, but not amended such that it could be proceeded with until 16 September 2008, made by the body corporate against the owners of lot 1, Richard John Smith and Luke Whiteland (respondents) seeks the following outcomes:

• Return of appearance to exclusive use area and common property to original condition prior to commencement of construction work; OR
• At completion of pool and gazebo area, return of exclusive use area to common property for the enjoyment of all lot owners;
• Change in by-laws to reflect above;
• Lot 1 owners to contribute $100,000 to sinking fund to pay for change to insurance coverage, individual water meters at Greenview Apartments and in consideration of future expenses to body corporate and all lot owners for maintenance, upkeep and inspection of pool and gazebo area, including unforeseeable problems with access to underground pipes, cables and sewerage.
  

The body corporate has sought an interim order requiring the respondents to cease all work immediately and present all plans and council approvals to the body corporate to discuss at an EGM to be held in late September or early October 2008 for a special resolution of the body corporate. It is further stated that numerous and reasonable attempts have been made by the committee and the body corporate managers to engage with the respondents, including issuing a By-Law Contravention Notice and as of 28 August 2008, work was stated to be continuing.

The grounds to the application are to the following effect:

• At the AGM on December 11, 2007, Richard Smith briefly discussed that he wished to start building works on lot 1 to the four owners present at the meeting. Richard was told by the lot owners present and the body corporate manager to submit all plans to the body corporate for a special resolution and written approval.
• On 4 July 2008, the owner of lot 6 met an electrician at her property to conduct work on lot 6 and she saw the construction in progress and damage to common property. The owner of lot 6 spoke to Richard on that day about body corporate approval and lack thereof.
• The owner of lot 6 made written complaint to the body corporate managers dated 22 July 2008 and also the secretary and owner of lot 5 verbally on 23 July 2008 and again in writing on 25 July 2008.
• A committee meeting was called for Thursday 31 July 2008 to discuss this and other issues.
• On 14 August 2008, the body corporate wrote to the respondents requesting that copies of all final plans, drawings, certification and Brisbane City Council approval in full be submitted to the committee and placed with the body corporate records. A by-law contravention notice was also included.
• As of the date of lodging the application, the body corporate had not received any submission of plans from the respondents.
• An EGM has been set for late September or early October 2008 at which quotes for legal advice in relation to the matter will be considered.
  

Jurisdiction

In accordance with section 247 of the Act, the Commissioner for Body Corporate and Community Management has referred the application to me even though affected persons have not been given notice of the application, or afforded an opportunity to make submissions about the application.

Section 276(1) of the Act provides that an adjudicator may make an order that is just and equitable in the circumstances to resolve a dispute, in the context of a community titles scheme, about a claimed or anticipated contravention of the Act; or the exercise of rights or powers, or the performance of duties, under the Act. Section 279(1) provides that an adjudicator may make an interim order if satisfied, on reasonable grounds, that an interim order is necessary because of the nature or urgency of the circumstances to which the application relates.

Investigation

In accordance with the investigative powers of an adjudicator stated in section 271 of the Act, I invited submissions from the respondents regarding the interim order application by Friday 26 September 2008.

The respondents made submission to the following effect:

• The interim order sought is unnecessary because they have already ceased work and have already submitted a special resolution to the body corporate for inclusion in the next general meeting of owners (which includes details and a copy of the site plan) concerning these matters.
• Richard Smith attended the AGM on 11 December 2007 where he outlined to those present the work the respondents intended to carry out in the exclusive use area of lot 1. He also produced drawings and sketch plans to the meeting. Richard left the meeting under the impression that the meeting had no objection to their plans. He has since been advised that a formal special resolution should have been proposed, but he was not advised of this by anyone at the meeting.
• On 15 August 2008, the respondents received a letter from the body corporate managers attaching a By-Law Contravention Notice and requesting copies of plans and other documents be provided to the committee. A copy of the correspondence was enclosed.
• The respondents instructed their solicitors to respond to the letter and Notice, which they did on the same day, by letter dated 15 August 2008. A copy of that letter is attached to the submission. Their solicitors challenged the validity of the committee meeting held on 31 July 2008 because the notice calling the meeting was defective (it named two alternative venues and a subsequent email advising the venue contained an error as to the day of the meeting) and the respondents did not have a chance to attend it. The respondents also suggested in that letter that a further committee meeting be called to provide details and to be informed of any specific objections to their proposals. The respondents acknowledged that final approval could not be given by the committee and advised that a further meeting may well shorten final resolution. The solicitors’ letter was both faxed and posted to the body corporate managers on 15 August 2008.
• The respondents did not receive a response to their solicitors’ letter of 15 August 2008. This is in contrast to the body corporate’s assertion that “numerous and reasonable attempts have been made by the committee and body corporate managers to engage” with them.
• On 9 September 2008, the respondents received a copy of a Flying Minute from the body corporate manager requesting their approval for the payment of filing fees for an interim order application. They noted that it was alleged that work was still being carried out.
• On 10 September 2008, the respondents advised the body corporate that it was not correct that the work was continuing and that all work, other than work needed to stop the project, had ceased on 12 August 2008. That letter was posted by express post to the body corporate. No response has been received.
• On 10 September 2008, the respondents forwarded to the body corporate a proposed motion concerning the works and asked that it be included on the agenda for the next general meeting. This was included with the letter referred to in paragraph 5 above and was forwarded by Express Post. No response has been received.
• The respondents conclude by submitting that no interim order is necessary:
  • Work ceased on 12 August 2008;
  • A motion has already been submitted to the body corporate for inclusion on the agenda of the next general meeting;
  • Copies of the site plan, compliance certificate, and Certificate of Insurance were attached to the motion and details of the work proposed were included in the motion.
• The respondents submit that the application should be dismissed or held in abeyance until the motion, already submitted by them, is dealt with by owners at a general meeting.
• So far as it may be required, the respondents undertake not to carry out any further work on the site until the owners’ decision pursuant to the motion has been made, other than work which they may choose to do to remove any of the works already installed.
  

Determination

Interim order application

Given section 279(1) of the Act, it is necessary to determine at the outset whether, because of the nature or urgency of the circumstances relating to the application, an interim order is in fact necessary or appropriate. The examples included in the Act under section 279(1) are suggestive of the usual circumstances where an interim order might be made. Both examples are in the nature of injunctive relief. Whilst the range of matters which might be the subject of an interim order is not capable of definition, the applicant does need to establish that the circumstances
of the application warrant the making of an interim order.

After reviewing the application and submission by the respondents, I am not satisfied that urgent circumstances exist to warrant consideration of the interim order sought. My reasons are that firstly, this application was lodged on 29 August 2008 and yet was not amended such that it could be proceeded with until 16 September 2008, almost three weeks later. Further, the application reveals that the owner of lot 6 was aware of the work being done in the exclusive use area of lot 1 as early as 4 July 2008, almost eight weeks prior to this application first being lodged and almost 11 weeks prior to the application being amended such that it could be proceeded with. The photographs taken by the owner of lot 6 on 4 July 2008 appear to me to indicate that a significant amount of work had already been completed by that time. The delay in bringing the application by the body corporate is not indicative of “urgency”. Further, the respondents have advised that all work ceased on 12 August 2008, and have undertaken not to carry out any further work on the site until the owners have considered their motion in general meeting, other than work which they may choose to do to remove any of the works already installed. The respondents have also supplied the documentation the body corporate requested it to as part of the interim order sought. I am also concerned that the respondents do not appear to have had an opportunity to have their motion considered at either the committee meeting held on 31 July 2008, or a general meeting scheduled for 2 October 2008. In these circumstances, I regard the making of an interim order as unnecessary.

I believe it is imperative that the respondents’ motion, submitted to the body corporate on 10 September 2008 be considered in general meeting before this application proceeds any further. I requested a copy of the Notice of EGM scheduled for 2 October 2008 and note that the respondents’ motion does not appear on the agenda, although a motion for the body corporate to engage solicitors to act on its behalf in relation to this matter does. I was disappointed to discover that the venue of the meeting has been changed since the Notice of Meeting was issued on 10 September 2008, however, it does not appear as though any attempt to include the respondents’ motion on the agenda for this meeting has been made.

In the circumstances, I propose to dismiss the application for an interim order. Before the application for final orders proceeds any further, I require a copy of minutes of a general meeting where the respondents’ motion in relation to works undertaken and proposed within their exclusive use area, has been considered.

Further Information

For the benefit of all parties, I provide the following information in relation to the consideration of the respondents’ motion in general meeting.

Section 174 of the Standard Module provides for improvements to common property, over which a lot owner has rights of exclusive use, as follows:

174 Improvements

(1) An exclusive use by-law may authorise the owner of a lot who

has the benefit of the by-law to make stated improvements to

the part of the common property to which the by-law applies.

(2) Without limiting subsection (1), improvements stated in the

by-law may include the installation of fixtures on the common

property and the making of changes to the common property.

(3) If the exclusive use by-law does not authorise the owner of a

lot to make an improvement, the owner may make the

improvement only if the body corporate authorises it to be

made.

(4) However, if the value of the improvement mentioned in

subsection (3) is more than $3000, the making of the body

corporate’s authorisation must be by ordinary resolution.

The committee, at its meeting of 31 July 2008, appears to have correctly identified that by-law 12 does not authorise the owner of lot 1 to make improvements within their exclusive use area. From the information supplied by the respondents, the value of the proposed improvements will exceed $3,000. Therefore the respondents can only make the improvements if the body corporate authorises them by ordinary resolution. The parties should note the increase in the value of the improvements limit from $250 to $3000 and also the change from a special resolution to an ordinary resolution, as part of the new Standard Module, effective from 30 August 2008.

When considering whether or not to authorise the improvements, the body corporate should be mindful of its legislative obligation to administer, mange and control the common property and body corporate assets reasonably and for the benefit of owners (s.152, Act).

In the event that the body corporate does authorise the improvements, the respondents should be aware of section 183 of the Standard Module which requires them to give the body corporate details of the nature and value of the improvements if, because of the improvements, the premium for reinstatement insurance required to be taken out by the body corporate is likely to increase. Further, although the owner of each lot is liable to pay a proportionate amount of the premium for reinstatement insurance that reflects the interest schedule lot entitlement for the lot, the body corporate may adjust the contribution payable by an owner of a lot in a way that fairly reflects the extent to which the premium relates to improvements made to the common property that benefit the lot (s.182, Standard Module).

It is apparent that the body corporate has not considered a request from the respondents to authorise the proposed improvements by ordinary resolution. I believe the body corporate must consider such a request before the application for final orders can proceed any further. Following the receipt by this office of the minutes of a general meeting where the respondents’ request for authorising for the improvements they propose has been considered, the application for final orders will be administered in accordance with the Act and the normal processes of this Office. The application will be finally determined in due course.