Verve Broadbeach [2009] QBCCMCmr 177 (6 May 2009)

Last Updated: 3 June 2009

REFERENCE: 0356-2009

INTERIM ORDER OF AN ADJUDICATOR

MADE UNDER PART 9 OF CHAPTER 6

BODY CORPORATE AND COMMUNITY MANAGEMENT ACT 1997

Number of Scheme:	36416
Name of Scheme:	Verve Broadbeach
Address of Scheme:	173 Old Burleigh Road BROADBEACH QLD 4217

TAKE NOTICE that pursuant to an application made under the abovementioned Act by Mervyn Carey, a co-owner of Lot 31 and Murray Phillips, a co-owner of Lot 51

I hereby order that pending a final determination of this application, the body corporate for Verve Broadbeach community titles scheme 36416 (including through its committee) shall not proceed with, implement or otherwise act upon the resolution passed on Motion 20 at the Annual General Meeting dated 20 March 2009. I further order that in all other respects, the application for an interim order by Mervyn Carey, a co-owner of Lot 31 and Murray Phillips, a co-owner of Lot 51 is dismissed. This interim order has effect until 12 months have elapsed from the date of this order, a further interim or final order for the application is issued, or until the application is withdrawn, rejected or otherwise ended (whichever is the earlier).

STATEMENT OF ADJUDICATOR’S REASONS FOR DECISION - REF 0356-2009

“Verve Broadbeach” CTS 36416

The scheme
“Verve Broadbeach” community titles scheme 36416 is subject to the Body Corporate and Community Management Act 1997 (Act).

Application
This application dated 17 April 2009 (amended 27 April 2009) is by Mervyn Carey, a co-owner of Lot 31 and Murray Phillips, a co-owner of Lot 51 (Applicants) against the Body Corporate. The Applicants seek the following outcomes:

1. To have all matters of dispute restored to comply with the Act, namely compliance with scheme by-laws:
   1. Visitor Parking (owner/occupiers not to park in Visitor Parking Regulated Areas).
   2. Parking Vouchers approved by the committee to be placed face up on the visitors dashboard identifying the unit that the visitor is visiting be enforced or the offending vehicles be towed away as approved by the committee.
   3. Keeping of Animals (owner/occupiers not to keep/allow animals on a lot or common property without Body Corporate's written approval).
   4. Correspondence (to be directed to the secretary, and not the chairperson or any member of the committee).
   5. Power of Committee (when the committee makes rules relating to the common property that they enforce these rules by way of issuing a breach notice on the offending party, together with the appropriate follow-up action).
2. To have the committee comply with the resolution passed at the Annual General Meeting dated 31st March 2008 (2008 AGM) whereby the motion to leave the foyer air conditioning running from 7.00am until 7.00pm, and now operating from 5.30am until 6.00pm which was defeated, to be turned off and the committee pay the Body Corporate for all running costs incurred since they disregarded the resolution passed and turned the air conditioning unit on to suit their personal needs.
3. To have the minutes of the meeting dated the 5th June 2008 show a correct recording of the meeting to reflect the events that occurred as requested.
4. To have motions presented for the Annual General Meeting dated the 20th March 2009 (2009 AGM) that has been left out of the meeting included.
5. Motions that were passed at the 2008 AGM and subsequently overturned illegally at the committee meeting dated the 5th June 2008 be restored.
6. To have all rulings made by the committee after the conclusion of the meeting dated the 5th June 2008 be declared invalid due to the chairperson, secretary and 2 committee positions being elected outside the terms of the Act, with these positions failed to be appointed within the 30 day time frame and their election approximately some 90 days thereafter without an EGM being called for nominations.
7. To invalidate the election of those committee members that were elected at the 2009 AGM that were members of the previous year’s committee, and to call for new nominations to fill these vacant positions. This new committee should have the interests of Verve Broadbeach CTS 36416 as a priority and one which declares a conflict of interest when the need arises.
   

The Applicants have sought an interim order that the resolution passed on Motion 20 at the 2009 AGM be declared invalid and that all proposed work be stopped. The Applicants provided a copy of the minutes of the 2009 AGM. Motion 20 was resolved by ordinary resolution:

(a) that the Body Corporate authorises Verve Broadbeach Pty Limited ACN 100 384 423 (‘VBPL’) to construct a wind buffer on the Anne Avenue entry of the building to supplement the existing windbreak (‘the Works’);
(b) that the Body Corporate agrees to grant access to VBPL, its agents, employees and contractors for the purpose of completing the Works;
(c) that the Body Corporate agrees to execute, sign or consent to any application for approval that VBPL is required to obtain in order to complete the works;
(d) that the Body Corporate notes that VBPL is undertaking the work at its own cost and will effect and maintain and will ensure that its contractors effect and maintain all necessary insurances relating to the Works during the Works;
(e) that the Body Corporate releases VBPL from any further claim in relation to the operation or effectiveness of the completed wind buffer on Anne Avenue;
(f) that the Body Corporate acknowledges the agreement of VBPL to carry out the Works does not amount to an admission of any failure to complete the building;
(g) that the Body Corporate releases VBPL from any further obligation in relation to the construction with respect to the following:

1. the separate pool and spa;
2. the gas heating system provided for the pool;
3. the omission of a ‘wet edge’ feature of the pool;
4. the non-provision of a water feature in the building Anne Avenue entry; and
5. the design and construction of the basement car park;

(h) that, subject to paragraph (a), any work the Body Corporate wishes to undertake to alter the built form of the building will be undertaken at its own cost and without recourse to or claim against VBPL;
(i) that the Body Corporate is authorised to enter into a deed to give effect to these releases.

The Applicants argue the committee elected the chairperson and the secretary to handle discussions with the developer. The Applicants submit that both the chairperson and the secretary have relationships with the developer. The Applicants are concerned that the outcome of discussions has been heavily loaded in favour of the developer because of the conflict of interest of Body Corporate officials. They believe the result is not in the best interests of the Body Corporate. The Applicants say the chairperson’s report to the 2009 AGM was in glowing terms of his discussions and the chairperson did not allow any debate. The Applicants consider that further discussions should be held to obtain a better result for owners.

The Applicants provided a copy of:

• Page 5 of the minutes of the committee meeting dated 5 June 2008 where (at Item 4 of Other Matters) it is minuted that the committee discussed outstanding issues relating to the original construction of the building and that concerns were raised about no self enclosed spa, no wet edge pool, no heat pump for the pool, no water feature at the front door and underground car park turning circles. It was resolved that the treasurer and Diana Scoot meet with the developer to negotiate a suitable outcome on behalf of the Body Corporate.
• The minutes of the committee meeting dated 22 August 2008 where (at Item 15 of Matters Arising From Previous Minutes) it is noted that Diana Scott and Jim Cummane met with the developer who agreed to assess the items and provide a report addressing the concerns.
• An email sent 11 November 2008 from Barry Morris to Diana Scott listing each of the items stated in the abovementioned Motion 20(g) and the corresponding action.
• The minutes of the committee meeting dated 22 January 2009 indicating (at Item 9 of Matters Arising From Previous Minutes) that a report was tabled from Barry Morris of Amalgamated Property Group addressing the spa, the pool, the water feature and the underground car park turning circles. The committee resolved to accept the response and to submit a motion to the Body Corporate to approve the installation of the wind barrier and once completed to execute a Deed of Release with Amalgamated Property Group in relation to the matters covered in the report.
• The Chairman’s Report which (at pages 3 and 4) deals with the “Owner/Developer Proposal”.
• A 12 page letter from Murray Phillips sent to Jennifer Berry of Stewart Silver King and Burns (the Body Corporate Manager) on 19 March 2009 that he says “should be viewed and acted upon by The Committee in conjunction with” the 2009 AGM. Pages 2 to 4 of the letter deal with Motion 20. The writer says Motion must be ruled out of order stating: the there is no comeback for the construction of the wind buffer; owners have not been given documentation about the method of construction; there is not a heated spa/separate filtration system and it would be costly to rectify; the omission of the wet edge pool feature and the water feature may affect the value of a lot or an owner’s investment; the car park does not comply with the BCA Codes which has been confirmed by Independent Traffic reports; the developer’s offer will leave the Body Corporate open to litigation; and the Motion is not in the best interests of the Body Corporate.
  

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”.

An order may require a person to act, or prohibit a person from acting, in a way stated in the order (s 276(2), Act). An adjudicator's order may contain ancillary and consequential provisions the adjudicator considers necessary or appropriate (s 284(1), Act).

Investigation
In accordance with the investigative powers of an adjudicator stated in section 271 of the Act, on 28 April 2009 I invited submissions from the committee regarding the interim order application, and a copy of the application was provided the Body Corporate Manager for distribution to committee members.

Submissions made on behalf of the committee consent to an interim order being made preventing the Body Corporate from carrying out the work referred to in Motion 20. The committee does not consent to an interim order being made to declare Motion 20 invalid submitting the Applicants have not demonstrated why ruling the Motion invalid is urgent (s 279(1), Act). The committee cites previous adjudications on Cherwood Lodge [2005] QBCCMCmr 704 (13 December 2005) and Boston on Belgrave [2005] QBCCMCmr 157 (18 March 2005) stating the appropriate course of action is to order that the Body Corporate not act on the Motion until such time as a final determination of the application can be made.

The first community management statement for the scheme held by the registrar of titles, Department of Environment of Resource Management shows that Verve Broadbeach Pty Ltd ACN 100 384 423 (VBPL) is the original owner for the scheme.

Determination
The Applicants dispute the resolution passed on Motion 20 which (in part) authorises: VBPL to construct a wind buffer; and the Body Corporate to enter into a deed to release VBPL from any further obligation in relation to items specified in the resolution. Given the committee’s submissions, there is nothing to suggest the work mentioned in the resolution has been completed or that a deed has been executed. For this aspect of the interim order sought, I am satisfied the Applicants have demonstrated urgent circumstances to warrant consideration of the interim order application.

In the absence of contrary material, it would seem the resolution refers to work being, or not being carried out on scheme land. The parts of scheme land mentioned in the resolution would appear to be common property. The resolution may or may not also refer to items which could be classified as body corporate assets.

A body corporate’s general functions include administering common property and body corporate assets for the benefit of lot owners (s 94(1)(a), Act). A body corporate must act reasonably in anything it does under section 94(1), including making a decision for the subsection (s 94(2), Act). A body corporate’s duties include administering, managing and controlling common property and body corporate assets reasonably and for the benefit of lot owners (s 152(1), Act).

It would seem the basis of the Applicants’ arguments is that the resolution passed on Motion 20 is not in the best interests of owners. In the absence of contrary argument and given the committee submissions, I am satisfied the Applicants have raised a question about the resolution to be determined. For this reason, I have made an interim order in relation to the implementation of the resolution.

The committee rightly question the necessity to void the resolution made on the Motion by interim order. For the purposes of determining the interim order application the Applicants do need to demonstrate urgent circumstances exist. I am not satisfied from the grounds provided that circumstances exist to warrant consideration, on an interim basis, as to whether the resolution is contrary to the legislation and void. For this reason, this component of the application for an interim order is dismissed.

This application will now be administered in accordance with the Act and the normal processes of this Office. The application will be finally determined in due course.