Boulevard North [2008] QBCCMCmr 63 (22 February 2008)

Last Updated: 17 April 2008

REFERENCE: 0142-2008

INTERIM ORDER OF AN ADJUDICATOR

MADE UNDER PART 9 OF CHAPTER 6

BODY CORPORATE AND COMMUNITY MANAGEMENT ACT 1997

Number of Scheme:	9833
Name of Scheme:	Boulevard North
Address of Scheme:	35 Broadbeach Boulevard BROADBEACH QLD 4218

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

Thomas, Margaret & Christopher Burrell, the Owners of lot 57

I hereby order that the application for orders that the AGM scheduled for 23 February 2008 be adjourned after the speakers have the opportunity to discuss motions 11-15 but before any vote is taken. that unit 57 may table the attached notes at the AGM on 23 February 2008 including the letter from P. Goodwach dated 7 December 2007and attachments from Harry Szmerling & Co. dated 17 December 2006. Is dismissed.

STATEMENT OF ADJUDICATOR’S REASONS FOR DECISION - REF 0142-2008

“Boulevard North” CTS 9833

Application

Boulevard North Community Titles Scheme (Boulevard North) is a 58 lot scheme under the Body Corporate and Community Management Act 1997 (Act) and the Act’s 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 application was received by this office on 20 February 2007 and was lodged by Christopher, Thomas and Margaret Burrell, owners of lot 57 (applicants) seeking orders against the body corporate for Boulevard North (respondent). The applicants seek the following Interim orders:

1. that the AGM scheduled for 23 February 2008 be adjourned after the speakers have the opportunity to discuss motions 11-15 but before any vote is taken.
2. that unit 57 may table the attached notes at the AGM on 23 February 2008 including the letter from P. Goodwach dated 7 December 2007and attachments from Harry Szmerling & Co. dated 17 December 2006.

The applicants also seek the following final orders:

1. That the committee acting honestly and fairly reconsider its explanatory note on motions 11-15;
2. that all postal votes on motions 11-15 be declared invalid;
3. that the revised committee explanatory note together with the letter from P. Goodwach dated 7 December 2007and attachments from Harry Szmerling & Co. dated 17 December 2006, be circulated to all owners for a postal vote only on motions 11-15;
4. That motion 16 now be included for postal vote also:

Ordinary resolution

That this body corporate grants a licence to unit 57 for a period of 3 years in respect of second carpark AL. It is noted that unit 58 has confirmed its agreement to use carpark AL and grant unit 57 use of carpark AM per usage over the past 25 years. In effect this licence preserves that status quo for 3 years.

5. That the committee include a resolution seeking authority to conduct the said court case and for expenditures in excess of their approval limit. That this resolution also be by postal vote.

Background

The applicants own lot 57 which is a penthouse unit at Boulevard North. The applicants believe that lot 57 should have two car spaces but claim that due to an error in the community management statement, only one car space has been allocated for the exclusive use of lot 57. The body corporate was previously granted an order that the occupiers of lot 57 vacate the disputed car space as it is not for their exclusive use, although the applicants have lodged an appeal against that order.[1]

In March 2007 the applicants lodged a dispute resolution application with this Office, seeking an extraordinary general meeting to be held to correct a number of alleged deficiencies concerning the annual general meeting for Boulevard North held on 24 February 2007. The applicants initially submitted that there were a number of irregularities at the annual general meeting of 24 February 2007, including failures to properly authorise expenditure. However, the applicants later conceded that the body corporate had subsequently addressed most of their concerns at an extraordinary general meeting on 29 June 2007.

The matter of continuing concern for the applicants was the failure of owners to adopt motions submitted by the applicants that would have provided for the grant of the disputed car space for the exclusive use of lot 57.

On 26 November 2007, Adjudicator Toohey of this office found that while the committee had recommended that owners vote against the applicants' motions, there was nothing to stop owners voting on the issue and the committee should not have felt constrained to recommend a vote against the motion. He therefore made orders that the applicants were at liberty to resubmit motions concerning the car parks at the annual general meeting scheduled for 23 February 2008.

The applicants state that motions were submitted within 14 days and included in the papers distributed two months later on or about 1 February 2008.

However, on 19 February 2008 a circular was distributed to owners by the committee under cover of a letter dated 12 February 2008 in which the committee recommended against voting for motions 11, 12, 13, 14 and 15. This circular included the following statements:

The committee’s solicitors advise that a very strong case exists and the matter should result in a decision in favour of the Committee which is endeavouring to represent the interests of all owners.

The matter was referred to the Body Corporate Commissioner for an independent decision and the Commissioner declared that the claims made by the owners of lot 57 were invalid and found in favour of the body corporate committee.

Due to the lengthy history of this matter the committee considers the most appropriate course of action is for the relevant authorities to determine the outcome.

The applicants contend that the above circular is misleading for the following reasons:

• The legal advice did not consider the possibility of an error in the 1982 by-laws and was regarded as “kerbside” by the applicants;
• Any “declarations” were made by an adjudicator and not the Commissioner;
• the relevant Community Management Statement is erroneous and “creates a fraud on the minority”;
  

In support of their application, the applicants have obtained the following written statement from a director of the company which originally developed the building:

It is my recollection that the two car park units which would otherwise have been allocated to the two apartments at the top of the building, would both be allocated to the one penthouse apartment at the top of the building. I confirm that there was never any intention to have unallocated car park units.
It is therefore argued that the 2 carparks were not assigned to unit 57 owing to an error in the original by-laws

Submissions

As stated above, the application for interim orders was received on 20 February and relates to a meeting scheduled for 23 February. Obviously, submissions could only be sought for a short period of time i.e. for a period of approximately 24 hours. Obviously a significant period of time will be allocated for the body corporate and any other affected persons to make submissions before final orders are issued.

By way of facsimile received at 9:40Am on Friday 22 February solicitors for the body corporate made the following submissions:

• The applicants have demonstrated a long history of dissatisfaction regarding the allocation of car parking spaces in the scheme and the committee was entitled to circulate the explanatory note by resolution of the committee and in response to the supporting information published by the applicants;
• Two body corporate committees have received independent and professional advice that there is no means of granting exclusive use of an additional car parking space other than by way of a resolution without dissent passed at a general meeting;
• It is true that an adjudicator appointed by the Commissioner found that the applicants are not entitled to exclusive use of the relevant car parking space, but the fact remains that a resolution without dissent is required;
• The applicants are entitled to dispute the adjudicator’s findings in the District Court and have in fact done so;
• The committee has received advice that the appeal is unlikely to succeed and believes that the decision of the adjudicator should be complied with in the meantime;
• There is no reason for any postal votes to be declared invalid;
• the adjudicator will have an opportunity to decide on the validity of motions 11 – 15 and any resolutions based on those motions after the meeting has been held;
• information received from directors of the development company does not change the legal position as this is a matter for the body corporate to decide by resolution without dissent.
  

Jurisdiction

Section 279(1) of the Act allows an adjudicator to make an interim order if satisfied, on reasonable grounds, that an interim order is necessary because of the nature or urgency of the circumstances of the application.

Further section 247 of the Act provides as follows:

247 Referral of application for interim order
(1) This section applies if the commissioner reasonably considers that an application for an interim order should be referred to a conciliator or an adjudicator because of the nature or urgency
of the circumstances to which the application relates.
(2) The commissioner may refer the application to—
(a) a department conciliator for department conciliation; or
(b) an adjudicator for adjudication under this chapter.
(3) The referral may be made even though—
(a) notice of the application has not been given under section 243; or
(b) all persons entitled, under that section, to make submissions about the application have not had an opportunity to make submissions.

Decision

This dispute resolution application was referred to me pursuant to section 267 of the Act for consideration as to whether an interim order should be granted and at this time, I am primarily concerned with the issue of whether an interim order is warranted. In any consideration of an
application that seeks an interim order, it is necessary to determine 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 are suggestive of the usual
circumstances where an interim order might be made. Whilst the range of matters that 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.

For it to be just and equitable to grant injunctive relief pending a final determination, I would need to be satisfied that the application raises serious questions to be determined and I would also need
to be satisfied that the balance of convenience between the parties justifies the grant of injunctive relief. That is, I would need to balance the inconvenience of granting relief now if final orders are
ultimately refused against the inconvenience of refusing relief now if final orders are ultimately granted.

At the AGM scheduled for 23 February 2008, owners are being asked to consider various motions submitted by the applicants including a motion that the body corporate consent to the registration of a new community management statement so that the applicants have exclusive use of a second car parking space. Obviously, notice of the meeting, the agenda, and voting papers were issued at least 21 days prior to the meeting. At this point in time, it is impossible for me to know what the outcome of the AGM may be. It could well turn out to be the case that the motions submitted by the applicants are successfully carried.

While section 42C of the Standard Module provides submitters of motions with an opportunity to provide the Secretary with an explanatory note to accompany each motion, there is no provision in the legislation for the submitter to require the Chairman to table correspondence and adjourn the meeting at the submitters request. While the Chairman may have a discretion to do so under the general law governing the conduct of meetings, I do not believe that I am empowered to make such an order, particularly in circumstances where postal votes have already been lodged.

For the above reasons I believe that the application for interim Orders should be dismissed. I do not consider that the balance of convenience favours granting the requested relief at this stage. I believe that this dispute can only be satisfactorily resolved by way of a final order after affording the body corporate and all affected parties the opportunity to lodge submissions.

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[1] Boulevard North, Order 0949-2006, ID Rosemann, 24 April 2007, presently being appealed as Burrell v Body Corporate for Boulevard North CTS 9833, District Court (Brisbane) 1590 of 2007.