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Queensland Body Corporate and Community Management Commissioner - Adjudicators Orders |
Last Updated: 17 April 2008
REFERENCE: 0712-2007
ORDER OF AN ADJUDICATOR
MADE UNDER PART 9 OF CHAPTER 6
BODY CORPORATE AND COMMUNITY MANAGEMENT ACT 1997
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Number of Scheme:
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931
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Name of Scheme:
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Sunbird
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Address of Scheme:
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109 Reid Road WONGALING BEACH QLD 4852
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TAKE NOTICE that pursuant to an application made under the abovementioned Act by
P Saraswati, the Owner of lot 3
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I hereby declare that the last Annual General Meeting was properly
called and held on 22 June 2007;
I further declare that as the applicant had not paid all levies due
as at the date of the last AGM he was not entitled to vote at that
meeting;
I further declare that as the owners of lots 1 & 2 purchased the
clothes dryer without first seeking the approval of the body corporate in
general
meeting, the clothes dryer belongs to the owners of lots 1 & 2 and
the applicant is not required to contribute to the cost of
purchasing the
clothes dryer;
I hereby order that Ms. Jessie Richardson of Body Corporate Services
shall continue to be the administrator for the scheme until the expiration of
her appointment, resignation or removal by order of an adjudicator;
I further order that the applicant is entitled to engage a licensed
plumber to disengage his connection to the communal hot water system and install
a hot water system within lot 3;
I further order that as the small hot water system is located on
common property, the applicant is to ensure that the agenda for the next General
Meeting includes a motion that he be entitled to keep this improvement on common
property;
I further order that if such approval for the small hot water system
is not obtained at the next General Meeting in accordance with Section 114 of
the Standard Module, the small hot water system is to be removed within 30 days
of the date of the meeting.
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STATEMENT OF ADJUDICATOR’S REASONS FOR DECISION - REF 0712-2007
“Sunbird” CTS 931
APPLICATION
Sunbird Community Title Scheme (Sunbird) is a 3 lot scheme regulated by the Body Corporate and Community Management Act 1997 (Act) and the Body Corporate and Community Management (Standard Module) Regulation (Standard Module). The scheme is designed for residential purposes and Lot boundaries are designated under a building units plan (now known as a building format plan).
The applicant is the owner of lot 3 and seeks the following Final Outcomes:
The applicant also previously sought Interim Orders that pending the outcome of the Final application, the current administrator, cease:
On 14 September 2007 I made certain interim orders including the following:
BACKGROUND
As the parties would be aware this scheme was previously the subject of a
dispute resolution application submitted by the owner of
lot 1 in December 2006
resulting in the appointment of a professional body corporate manager, Ms.
Richardson of Body Corporate Services.
However, the applicant states that as
previously, the other lot owners are not interested in day to day management and
maintenance
of the scheme. He further states that although Ms. Richardson of
Body Corporate Services was appointed as administrator for a 12
month period to
ensure that body corporate records are up to date, and that he handed over all
records without delay, it was not
until June that a meeting was held, budgets
approved and levies were set.
He states that the existing by-laws are
deficient and not sufficiently detailed for operation of the scheme. For example
there are
no by-laws regarding operation of a shared laundry, washing machine
& clothes dryer, and it was only recently that a separate
electricity
connection was installed for the laundry.
The applicant states that the first levy notice received by him from BCS was dated 10 July 2007 and contains a number of ambiguities via:
The applicant also seeks to have the 2007 AGM declared invalid on the following grounds:
Other matters of concern raised by the applicant include the following:
Pursuant to section 243 of the Act submissions were sought from all lot owners as well as the body corporate manager.
The body corporate manager advised that following a previous dispute within the scheme she was appointed body corporate manager and upon appointment undertook an inspection of the scheme and discussed various matters with other lot owners. She made the following observations:
Although he was entitled to write a cheque at the meeting, it would take 5 days to clear the cheque and therefore it was not possible for him to be “financial” as at the date of the meeting;
The owner of lot 2 made the following submissions:
The owner of lot 1 made the following submissions:
JURISDICTION
Section 276(1) of the Act
provides that an adjudicator may make an order that is just and equitable in the
circumstances (including
a declaratory order) to resolve a dispute, in the
context of a community titles scheme, about-
(a) a claimed or
anticipated contravention of the Act or the community management statement; or
(b) the exercise of rights or powers, or the performance of duties,
under the Act or the community management statement; or
(c) a claimed
or anticipated contractual matter about-
(i) the engagement of a
person as a body corporate manager or service contractor for a community titles
scheme; or
(ii) the authorisation of a person as a letting agent for
a community titles scheme.
An order may require a person to act, or
prohibit a person from acting, in a way stated in the order (section 276(2)). An
adjudicator's
order may contain ancillary and consequential provisions the
adjudicator considers necessary or appropriate (section 284(1)).
DETERMINATION
I have now had an opportunity to review in
detail the material accompanying the application, submissions and accompanying
material
for the purposes of deciding what final orders may be appropriate. As
the parties would be aware, to maintain the status quo pending
final orders, on
14 September 2007 I made the following interim orders:
I am now concerned with the applicant’s request for the following Final Outcomes:
In summary, the applicant makes the following claims:
On the other hand, the body corporate manager and owners of lots 1 and 2 argue that:
The circumstances of this dispute are unusual and present
a challenge to me as an adjudicator seeking to achieve some form of resolution
which is just and equitable to all the parties.
As I have previously stated,
the management of even a small body corporate can be an onerous task given the
complexity of the applicable
legislation. The task is all the more difficult
when lot owners live away from the scheme. Given the difficulties previously
encountered
within this scheme, I do not propose to overturn my previous order
that an administrator be appointed. While I appreciate that there
are certain
costs involved in having a professional body corporate manager, the reality is
that the parties have not demonstrated
that they can co-operatively self manage
the scheme at this point in time. However, as the parties would be aware, the
appointment
of an administrator was a temporary measure implemented for the
purposes of ensuring that systems and procedures are put in place
to ensure that
the body corporate complies with the Act and Standard Regulation Module. It is
hoped that after the administrator’s
12 month tenure expires the body
corporate may be able to manage its own affairs, perhaps with the assistance of
a body corporate
manager.
The next matter for my consideration is the validity of the AGM held on 22 June 2007. Having reviewed the submissions and documentary evidence supplied by the parties, I believe that a valid agenda was distributed and adequate notice of the meeting was given. From my position it is difficult to ascertain whether or not the applicant received his levy notice prior to the meeting. The body corporate manager contends that the notice was posted along with other notices and the other lot owners have confirmed that they received their levy notices.
Other lot owners have pointed out that all owners are aware that levies are due to be paid in March and September each year and it is the applicant’s responsibility to ensure that body corporate fees are paid before the meeting. Further, I note that the applicant previously attended to management of the body corporate’s affairs and would therefore be aware that levies need to be paid on a regular basis to meet the costs of operating the body corporate.
In relation to the denial of voting rights I advise that Subsection 49A (2)
of the Standard Regulation Module titled “Displacement or
disentitlement of right to vote” provides as follows:
A
person does not have the right to exercise a vote for a particular lot on a
motion (other than a motion for which a resolution without
dissent is required),
or for choosing a member of the committee, if the owner of the lot owes a body
corporate debt at the time of
the meeting.
The Dictionary located at
the back of the Standard Regulation Module defines a body corporate
debt owed by a lot owner to the body corporate in the following terms-
(a) a contribution or instalment of a
contribution;
(b) a penalty for not paying a contribution or
instalment of a contribution by the date for payment;
(c) another
amount associated with the ownership of a lot.
Examples of another
amount for paragraph (c)—
• an annual payment for parking
under an exclusive use by-law
• an amount owing to the body
corporate for lawn mowing services arranged by the body corporate on behalf of
the lot owner
In my view the applicant’s levies were in arrears as at the date of the AGM and the applicant would have been aware, or should have been aware of this.
The next matter for consideration is the requirement for the applicant to contribute to the costs of a new dryer and operating a laundry area which is used exclusively by the other 2 lot owners. Unfortunately problems of this nature arise frequently in schemes such as Sunbird, involving creation of numerous titles over areas of an existing building and it can be challenging for an adjudicator to find a solution which is just and equitable to all the parties.
I note that the owners of lots 1 & 2 decided to purchase a new clothes dryer after the dryer previously installed in the laundry malfunctioned. It is my understanding that the owners of lots 1 & 2 then decided to deduct the amount from their levy payments. I do not believe it is appropriate for lot owners to purchase property on behalf of the body corporate without first seeking approval of the body corporate in general meeting [1] or failing that, seeking approval by an adjudicator. I am therefore of the view that the clothes dryer is the personal property of the respective owners of lots 1 & 2 and that they are not entitled to deduct the purchase price from their body corporate fees.
The next matter for consideration is the installation of a hot water system in the applicant’s lot. I see no reason why the applicant should not be able to install a hot water system within his lot and disconnect the communal hot water system from his lot.
In my view such an arrangement is contemplated by the Body Corporate and Community Management (Standard Module) Regulation, and particularly section 119 of the Regulation Module which provides as follows:
119 Supply of services by body corporate
(1) The body corporate
may supply, or engage another person to supply, utility services and other
services for the benefit of owners
and occupiers of lots, if the services
consist of 1 or
more of the following—
(a) maintenance
services, which may include cleaning, repairing, painting, pest prevention or
extermination or mowing;
(b) communication services, which may include
the installation and supply of telephone, intercom, computer data or
television;
(c) domestic services, which may include electricity,
gas, water, garbage removal, airconditioning or heating.
(2) The
body corporate may, by agreement with a person for whom services are supplied,
charge for the services (including for the
installation of, and the maintenance
and other operating costs associated with, utility infrastructure for the
services), but only
to the extent necessary for reimbursing the body corporate
for supplying the services.
(3) In acting under subsections (1) and
(2), the body corporate must, to the greatest practicable extent, ensure the
total cost to the body corporate ...for supplying a service,
including the cost
of a commercial service, and the cost of purchasing, operating, maintaining and
replacing any equipment, is recovered
from the users of the service.
I would also point out that section 115O(1) of the Land Title Act 1994
makes provision for easements in favour of lots for utility services and utility
infrastructure in the following terms:
(1) An easement exists in favour of
a lot and against other lots and common property for supplying utility services
to the lot and
establishing and maintaining utility infrastructure reasonably
necessary for supplying the utility services.
I therefore propose to
order that the applicant is entitled to engage a licensed plumber to disengage
the communal hot water system
connection to lot 3 and install a new hot water
system within lot 3. The cost to the body corporate of supplying hot water to
lots
1 and 2 would then be recoverable by the body corporate from the owners of
lots 1 & 2.
At this point in time I do not propose to make any further orders in relation to any other costs incurred in relation to use or maintenance of the laundry area. This is because the area is common property and not being the subject of an exclusive use by-law, the body corporate is responsible for the maintenance of this area. I would however encourage the parties to come to some form of arrangement themselves regarding any other costs associated with the laundry so that current conflict within the scheme can be resolved .
The next matter for consideration is the question of whether the applicant is entitled to keep another hot water system in the area previously used as a BBQ area. I have examined the relevant plan for this scheme and believe that the area in question is part of the common property. Further, I have not been provided with, nor have I been able to locate elsewhere, any evidence that this area is subject to an exclusive use by-law for the benefit of lot 3.
The making of improvements (such as a hot water system which services one lot
only) on common property by a lot owner are regulated
by Section 114 of the
Standard Module which provides as follows:
114 Improvements to common
property by lot owner
(1) The body corporate may, if asked by the
owner of a lot, authorise the
owner to make an improvement to the
common property for the benefit of the
owner’s
lot.
(2) The improvement must be authorised by special resolution of
the body
corporate unless—
(a) the improvement is a
minor improvement; and
(b) the improvement does not detract from the
appearance of any lot
included in, or common property for, the
scheme; and
(c) the body corporate is satisfied that use and enjoyment
of the
authorised improvement is not likely to promote a breach of
the owner’s
duties as an occupier.
(3) An
authorisation may be given under this section on conditions the
body
corporate considers appropriate.
(4) The owner of a lot who is given
an authority under this section42—
(a) must comply with
conditions of the authority; and
(b) must maintain the improvement
made under the authority in good
condition, unless excused by the
body corporate.
I would therefore suggest that should the applicant
wish to retain the small hot water system in the BBQ area, he should seek body
corporate approval. In deciding whether to grant such approval the body
corporate should have regard to section 94 of the Act to
act reasonably in
carrying out their functions. Section 94 of the Act provides as follows:
Body Corporate’s General Functions
(1) The body
corporate for a community titles scheme must—
(a) administer the
common property and body corporate assets for the benefit of the owners of the
lots included in the scheme; and
(b) enforce the community management
statement (including any by-laws for the scheme); and
(c) carry out
the other functions given to the body corporate under this Act and the community
management statement.
(2) The body corporate must act reasonably in
anything it does under subsection (1).
To sum up I propose to make
the following orders:
[1] Section 103 Standard Module Regulation
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