Waterside Runaway Bay [2008] QBCCMCmr 81 (7 March 2008)

Number of Scheme:	34678
Name of Scheme:	Waterside Runaway Bay
Address of Scheme:	27 - 29 Madang Crescent RUNAWAY BAY QLD 4216

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

I hereby order

That the AGM scheduled for 10 March 2008 may proceed;
That motion 10 (including any amendments made to motion 10) may be voted upon at the AGM;
That owing to the possibility that a resolution based upon motion 10 could be invalid, the Body Corporate is to refrain from acting upon any resolutions based on motion 10 until a final order has been made in respect of this dispute resolution application.

THE SCHEME

Waterside Runaway Bay is a 10 lot scheme registered as a building unit plan (now known as a building format plan) and operating under the Body Corporate and Community Management (Standard Module) Regulation 1997 (the Standard Module).

APPLICATION

The applicants are Barrie & Olivia Johnston, the owners of lot 1 who seeks the following Interim Order:

That the body corporate be restrained from considering Motion 10 at the upcoming Annual General Meeting to be held on Monday 10 March 2008 or alternatively the body corporate be restrained fromacting on the motion pending final determination of this application.

A declaration that lot 1 was granted exclusive use of the deck extension pursuant to a resolution without dissent of the body corporate passed on 6 February 2007.

An order directing that the body corporate sign and cause to be lodged a new community management statement including a by-law granting to the owner of lot 1 exclusive use of the extension of balcony from lot 1 (which encroaches onto common property) and an exclusive use plan in accordance with the resolution without dissent of the body corporate passed on 6 February 2007.

BACKGROUND

Waterside Runaway Bay is a 10 lot scheme registered as a building unit plan and by contract dated 6 February 2007 the applicants purchased lot 1 from Zenrich Pty. Ltd. (“the developer”) by contract dated 6 February 2007 which was conditional upon the purchasers being granted exclusive use of that part of the extension to the balcony that encroaches upon common property.

The applicants state that on 6 February 2007, the developer, who was the owner of all lots in the scheme at the time of the contract, caused the body corporate to hold an extraordinary general meeting to approve the construction of the deck and also granted to them exclusive use of that part of the extension to the balcony that encroaches upon common property. Attached to the application was a copy of the minutes of the EGM held on 6 February 2007 which include the following

Resolved that permission be granted for construction of a timber deck 1.36 metres by 4.56 metres which will extend the existing ground floor terrace in front of lot 1.

Resolved that permission be granted for the above extension of the balcony that encroaches onto the common property to be included in the Exclusive Use areas allowed for by the owners of Lot 1.

However it is claimed that the body corporate has failed to lodge the community management statement including a by-law evidencing the grant of exclusive use. Further, on 15 February, the body corporate manager issued a notice of annual general meeting which contained Motion 10 “that the deck extension of unit 1 be restored to common property”.

Requests by the applicants to have the motion withdrawn have been rejected by the body corporate manager and, it is alleged, the body corporate has now taken the position that it is not now possible to lodge a new CMS evidencing the grant of exclusive use because 3 months have elapsed from the date that the resolution was passed on 6 February 2007.

The applicant’s position is that as they have been granted exclusive use of certain common property, a resolution without dissent (i.e. requiring their consent) is required to divest them of their right to exclusive use.

Accordingly, the applicants are seeking an order directing that the body corporate sign and cause to be lodged a new community management statement including a by-law granting to the owner of lot 1 exclusive use of the extension of balcony from lot 1 (which encroaches onto common property) and an exclusive use plan in accordance with the resolution without dissent of the body corporate passed on 6 February 2007.

That the body corporate be restrained from considering Motion 10 at the upcoming Annual General Meeting to be held on Monday 10 March 2008 or alternatively the body corporate be restrained from acting on the motion pending final determination of this application.

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

(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)).

Sub-sections 279(1) & (2) provide that -
(1) The 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.
Examples
1. The adjudicator may stop the body corporate from carrying out work on common property until a dispute about the irregularity of proceedings has been investigated and resolved.
2. The adjudicator may stop a general meeting deciding or acting on a particular issue until it has been investigated and resolved.
(2) An interim order
(a) has effect for a period (not longer than 1 year) stated in the order; and
(b) may be extended, varied, renewed or cancelled by the adjudicator until a final order is made; (c) may be cancelled by a later order made by the adjudicator; and
(d) if it does not lapse or is not cancelled earlier, lapses when
(i) the application is withdrawn; or
(ii) the commissioner gives the person who made the application a written notice under section 241 rejecting the application; or
(iii) a final order is made by an adjudicator to whom the application is referred. ...

At this point in time, I am concerned with the application for interim orders and the threshold issue of whether interim orders are warranted. An interim order will not be granted unless is it necessary due to the nature or urgency of the circumstances to which the application relates.[1] Any order granted must be just and equitable in the circumstances.[2] The examples in section 279 of the Act indicate the usual circumstances where an interim order might be made and are in the nature of injunctive relief.

While it is not possible to exhaustively define what matters might be the subject of an interim order, an applicant needs to establish that the circumstances warrant an interim order. An interim order will not be made if the only urgency relates to an applicant’s desire to resolve or expedite the matters in dispute, or where the nature of the circumstances are such that the matter is not capable of being dealt with in the context of an interim order.

As an interim order can be considered on an ex parte basis an adjudicator must be satisfied that the application raises serious questions to be determined and that the balance of convenience between the parties justifies the grant of injunctive relief. That is, an adjudicator must 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. Of particular relevance is evidence that an interim order is necessary to prevent serious or irreparable harm.

At this point in time I am dealing only with the request for an Interim Order which, the applicant states, is urgently required. In such circumstances section 247 of the Act contemplates that submissions may be dispensed with before making an interim Order. I believe that the balance of convenience favours the granting of the requested interim Order and I also believe that the most appropriate course for me to take is to allow the AGM scheduled for Monday 10 March to proceed, and to allow motion 10 to be considered and voted upon at the AGM, but order that the body corporate is not to act upon any resolution based upon motion 10 pending final determination of this application.

This matter will now be investigated in accordance with the usual processes undertaken by this office and a final order regarding the application will be made in due course.

Queensland Body Corporate and Community Management Commissioner - Adjudicators Orders

Waterside Runaway Bay [2008] QBCCMCmr 81 (7 March 2008)