Redlynch Grove Apartments [2009] QBCCMCmr 265 (24 July 2009)

Number of Scheme:	36924
Name of Scheme:	Redlynch Grove Apartments
Address of Scheme:	434-446 Kamerunga Road REDLYNCH QLD 4870

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

I hereby order that pending the final resolution of this dispute resolution application the body corporate for Redlynch Grove is not to implement or act upon any resolution on motions 13, 16 and 17 to be considered at the AGM for the scheme to be held on 27 July 2009.

The applicant states that he is seeking the above orders on a number of grounds including the following:

The applicant states that the committee has proposed motion 10 which relates to the Caretaking Agreement for the complex. Motion 10 proposes that the schedule to the caretaking agreement be varied to clear up uncertainties regarding the obligations of the caretaking service contractor. It is proposed to amend the schedule to state that the caretaker should be reasonably in attendance or contactable and that common areas and car parking areas should be cleaned. The explanatory note states that “The variation allows for this”.

The applicant further states that the caretaking service contractor’s staff failed to carry out cleaning duties in stages 2 & 3 of the complex, stating that they were not being paid for this work. However when confronted with evidence that it had been paid, the caretaking service contractor abandoned the site. The applicant also states that other staff failed to clean the garden areas between December 2007 and mid January 2008 and also resigned. As a result, the body corporate issued remedial action notices and sought to terminate the caretaking service contract and claim damages from the caretaking service contractor. However, it is claimed that the caretaking service contractor has managed to stack the body corporate committee which “suspended “ the application before the Commercial and Consumer Tribunal proceedings.

The applicant does not believe that this motion is for the benefit of lot owners but in the interests of the caretaking service contractor which takes little interest in meeting its contractual obligations. He also believes that if the motion is carried, the committee “will lift the suspension “ of the application and that the caretaking service contractor “will use the amendment to the agreement as part of their defence”.

Motion 11 relates to the changing of locks on all front doors at a cost of $20 per lot. The reason given for this motion is that previous committee members have refused to return the master key for the existing locks, giving rise to security concerns. The applicant states that the real reason for this motion is to prevent committee members from accessing common property, stairwells and foyers to check if the caretaking service contractor has been performing its contractual obligations.

Motion 12 imposes a 10 kph speed limit on the site and secondly, allows resident children, under adult supervision, to ride bicycles and scooters on the left hand side of the roadway in Redlynch Grove. The applicant believes that this discriminates against children who ride skateboards and roller blades. The applicant also states that use of bicycles and scooters in the complex creates a danger and nuisance.

Motion 13 relates to a proposal to obtain and erect a sign prohibiting glass in the swimming pool area which is opposed by the applicant on the basis that existing signage already prohibits glass in the pool area.

Motion 14 relates to a proposal to obtain and erect a sign requesting pool users to not use the pool area between 9 pm and 6 am in order to limit noise. The applicant believes that this is in conflict with the current by-laws.

Motions 16 and 17 we submitted by the owner of lot 2 but the applicant claims that this was done at the behest of the caretaking service contractor.

That independent legal advice is to be obtained by the body corporate to investigate the past conduct of the current committee specifically as to:

For the total amount not exceeding $5,000 with funds to be met from the administration fund.

That in the event that the findings of the investigation into the conduct of the current committee, identifies a possible claim for damages that further legal advice be sought and a claim for damages pursued. Any action taken will be for a total expenditure not exceeding $10000 with funds to be met from the administration fund. against individual members of the committee
as identified in the investigation.

As the applicant correctly points out, motions similar to motions 16 and 17 were previously considered at the EGM held on 18 February 2009 and challenged in this forum. However, those motions (i.e. the ones considered on 18 February) did not require authorisation of any expenditure. In response to my inquiries I was then advised that the purpose of those motions was to make a preliminary decision as to whether or not legal advice should be obtained and were not expenditure motions.

The applicant argues that motions 16 and 17 are expenditure motions and are invalid for the following reasons:

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 authorization 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) deal with the making of interim orders and 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 an interim order is 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] 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.

This application was originally submitted on 10 June but subsequently required extensive amendment during the case management process in order to clarify the matters in issue and relief sought. Accordingly, it has not been feasible to seek submissions from the parties in respect of the interim orders sought. However, I do propose to seek submissions from the committee and all lot owners prior to making final orders.

While I am permitted to make Interim orders on an ex parte basis, 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[2] and any order granted must be just and equitable in the circumstances.[3]
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.

At this point in time I do not believe that the balance of convenience favours an order invalidating motions 10, 11, 12 and 13. Nor does the balance of convenience favour making an order prohibiting the implementation of any resolution upon motions 10 to 13. I am not convinced that these motions should be declared invalid and in any case do not believe it would be appropriate to make such orders until all lot owners, and the committee have been given an opportunity to make submissions.

However I do have concerns regarding the applicant’s claim that motion 14 conflicts with the by-laws for the scheme which would have the effect of rendering motion 14 and any resolution upon that motion, invalid. Accordingly I propose to order that pending the final resolution of this dispute resolution application, the body corporate for this scheme is not to implement any resolution upon motion 14.

The applicant argues that motions 16 and 17 are invalid for the following reasons:

I also have some concerns regarding motions 16 and 17. Firstly, there is some ambiguity in motion 16 in that it refers to “conduct of the current committee” whereas it is my understanding that the purpose of the motion is to authorise an investigation of the previous committee.

Secondly, I note the submission by the applicant that there is no provision for this spending in the budget. From the information which I have received to date, I believe that there is some truth in this argument and agree that a special levy would be required to meet this expenditure.

that pending the final resolution of this dispute resolution application, the body corporate for Redlynch Grove is not to act upon any resolution upon motions 14, 16 and 17 to be considered at the AGM for the scheme to be held on 27 July 2009.

This dispute resolution application will be further dealt with in accordance with the usual processes undertaken by this office which may include seeking further submissions from the respondents and other lot owners. A final order regarding the application will be made in due course.

[1] Section 279 of the Act
[2] Section 279 of the Act
[3] Section 276 of the Act

Queensland Body Corporate and Community Management Commissioner - Adjudicators Orders

Redlynch Grove Apartments [2009] QBCCMCmr 265 (24 July 2009)