Broadwater Tower [2009] QBCCMCmr 18 (20 January 2009)

Number of Scheme:	9041
Name of Scheme:	Broadwater Tower
Address of Scheme:	17 Bayview Street RUNAWAY BAY QLD 4216

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

I hereby order that the application for interim orders is dismissed.

The application for final orders remains outstanding. There will be an opportunity for persons likely to be affected by any final orders to provide submissions regarding the application for final orders in due course.

Broadwater Tower Community Titles Scheme (Broadwater Tower) is a 132 lot scheme under the Body Corporate and Community Management Act (Act) and the Act’s Standard Module Regulation (Standard Module).

This is an application for interim orders. It arises out of an application by Nikolas Newbury, owner of lot 115 (applicant) against the body corporate for Broadwater Tower (respondent).

The applicant previously lodged an application challenging a resolution by the body corporate that it become a bulk electricity supplier to Broadwater Tower.[1] This involves capital works including the installation of new metering services at a cost of $23,243. The applicant provided a notice indicating that these works are to take place on 21 January 2009.

In the present application, the applicant seeks to prevent the body corporate proceeding with the bulk electricity supply pending the body corporate providing individual owners with more information about matters including actual discounts and the cost of exiting the bulk electricity supply scheme.

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 (Act, 279). Further, any orders granted must be just and equitable in the circumstances (Act, 276).

In determining whether it is just and equitable to grant interim relief it is relevant to briefly consider whether the application raises any serious questions for final determination.

It is also relevant to consider whether any inconvenience likely to result from the interim order is outweighed by the potential detriment alleged in the application. Any evidence that an interim order is necessary to prevent serious or irreparable harm will be significant.

The applicant says that the committee is ignoring a requirement for them to make certain disclosures to residents including related to the option to continue to accept supply from the franchised grid rather than the body corporate and the lack of access to supply from the franchised grid once a resident agrees to accept supply from the body corporate.

The main concern appears to be an alleged cost of $4,000 to $5,000 to each owner if owners accept the proposed rewiring that facilitates purchase of electricity from the body corporate but subsequently need to have this rewiring reversed to purchase electricity directly through the franchised grid. In support of this allegation the applicant has provided a copy of an email from an absentee owner expressing concern that they will need to address these costs if their tenant changes their mind and wants to obtain electricity from another supplier.

Submissions by the body corporate manager on behalf of the committee are to the effect that 128 of the 130 units have accepted the proposal to purchase from the body corporate and that the remaining two units will be wired directly to the franchised grid and free to choose whichever supplier they like over that network. Further, that any other owner who opts out from purchasing from the body corporate subsequently will be able to be wired in the same way.

These submissions indicate that there is a serious question to be determined regarding whether the body corporate should have informed residents of the potential rewiring cost if they proceed now to purchase electricity from the body corporate but subsequently wish to be reconnected to he franchised grid. Similarly, there may be some questions regarding whether an owner will be responsible for rewiring costs if a tenant wishes to obtain electricity from a different supplier or if the tenant would be responsible for those costs themselves.

The applicant has established some justification for an interim order prohibiting any rewiring proceeding pending a final determination of the dispute.

However, it is possible that the applicant will not succeed in establishing any contravention of the legislation and it would be inconvenient for the body corporate to be subject to an interim order prohibiting the work if owners wanted the work to proceed.

The body corporate has submitted that the body corporate committee instructed FR Innsol Pty Ltd to install a bulk electricity meter in December of last year, before this application was received. Further, that arrangements have been made with Energex to cut off all power to the building. It is submitted that this work is due to proceed tomorrow and there are concerns about increased costs and a potential interruption to supply if the body corporate endeavoured to postpone the work at this late stage.

A member of this office has made some further enquiries on my behalf in relation to these issues. Further information provided from the body corporate manager was to the effect that an interim order would disadvantage the majority of owners as they would lose the benefit of cheaper electricity with Silver Energy fees likely to be in the order of 40% cheaper than those of Origin Energy. Further, that the original metres would remain in place and it would appear to be a relatively simple matter for a person to seek reconnection with Origin Energy if they changed their mind. It was therefore suggested that reconnection to the franchised grid would be relatively simple and cheap.

In response, the applicant said that one of the committee members, Bill Edwards, had told him that the cost of changing supplier from the body corporate back to Origin would be around $4,000 to $5,000. However, it appears that this amount may have referred to the costs of rewiring the entire body corporate to the franchised grid. Bill Edwards has informed this office that the body corporate is currently intending to wire two lots separately at a cost of about $800 each and that he considers this would be about the cost a resident would incur if they subsequently wanted to be wired back to the original supplier.

I have concerns about the lack of evidence provided by the applicant about the costs of reconnection or of other persons being likely to change their minds if they were aware there were likely to be costs of reconnection to the franchised grid.

I also have concerns about possible additional costs and lost discounts for owners should I grant the interim order sought.

It is perhaps admirable that the applicant has expressed concern that other owners or occupiers may be participating in the scheme in circumstances where they are unaware of an additional rewiring cost if they wish to exit the scheme. However, upon weighing up the possible detrimental financial implications from the making of the interim order against the possibility of likely financial implications if owners or occupiers subsequently choose to revert to the franchised grid, I am not satisfied it is appropriate to grant the interim order sought.

For these reasons, the application for interim orders is dismissed. If necessary, a final order will be made in due course.

Queensland Body Corporate and Community Management Commissioner - Adjudicators Orders

Broadwater Tower [2009] QBCCMCmr 18 (20 January 2009)