Sanctuary Bay [2009] QBCCMCmr 278 (4 August 2009)

Number of Scheme:	6523
Name of Scheme:	Sanctuary Bay
Address of Scheme:	81 Boykambil Esplanade HOPE ISLAND QLD 4212

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

I hereby order with the consent of the body corporate, that painting contractors will not be engaged by the body corporate in respect of Motion 2 and Motion 3 passed at an extraordinary general meeting on 18th July 2008 until final determination or earlier discontinuance of this application.

I further order that this interim order expires when a further interim order is issued, or when the application is finally determined or discontinued, or upon the expiry of 12 months from the date of this order, whichever is the earliest.

This is an application dated 21st July 2009 and amended on 22nd July 2009 by Stephen Quinn and Carolyn Quinn (Applicants) co-owners of Lot 43 in the scheme against the body corporate of Sanctuary Bay CTS 6523 ( the body corporate) for orders as follows –

The Applicants also seek an interim order that as resolutions 2 and 3 were about painting, that contractors not be engaged “prior to the Commissioner completing an assessment of this application.”

The Applicants also sought direction about the ability of the committee and the role of the body corporate manager.

“Sanctuary Bay” CTS 65223 is a community title scheme governed by the Body Corporate and Community Management Act 1997 (the Act) and the Body Corporate and Community Management (Standard Module) Regulation 2008 (Standard Module). There are 45 lots in the scheme created under a Building Unit Plan of subdivision

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)).

Section 247(3) of the Act allows the Commissioner to refer an application to an adjudicator for consideration for an interim order even though proper notice of the application has not been given to the body corporate or other affected persons, and despite the fact that parties to the application have not been given an opportunity to make a submission about the matters in dispute. It seems to me that the Act allows this process because applications for interim orders often relate to emergency or otherwise urgent circumstances, where it is simply impractical or impossible to allow a period for submissions prior to the consideration of the application for interim orders. It is also relevant that generally the purpose of an interim order is simply to maintain the “status quo” of a situation, and not finally to resolve the matters in dispute.

Section 279(1) of the Act allows an adjudicator to issue an interim order in response to an application “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”. Read together with section 247(3), section 279(1) appears to allow an adjudicator to issue an interim order without any reference to other parties to the dispute.

Notwithstanding that the Act allows for interim orders to be issued without reference to other parties, I am of the view that when possible, it is far preferable and more consistent with the principles of natural justice, to allow affected persons to make a submission about an application (even if the time allowed for submissions is necessarily brief) prior to the determination of an application for an interim order. I therefore sought submissions from the body corporate committee, giving it 10 days in which to return a submission.

The Applicants say that at an extraordinary general meeting held on 18th July 2009, motions 2 and 3 were incorrectly prepared and the voting papers contained anomalies. Two quotations were proposed in Motion 2 for repainting all existing painted structures and painting the tiled roof. The roof has not previously been painted. The Applicants say that these quotations did not separate the cost of painting the painted structures from the cost to paint the roof, and that they should have been itemised separately.

The Applicants believe that the motion to paint previously painted structures should have required an ordinary resolution whereas the cost of painting the roof would have been “an improvement” and required a special resolution. Further, there is no evidence that the roof requires painting.

Motion 3 was about the colours, giving the body corporate two options, either to paint the complex in “the Modern Conservative Colour Scheme” which the Applicants say are “predominately dark grey and cream tones”; or to repaint in the “Mediterranean Colour Scheme.” The motion was passed 22-16 in favour of the “new” colours.

The committee sent an email to lot owners on 12th June 2009 distributing the two colour schemes, and the recommendations for painting. The foreword by the chairman said that a special resolution would be sought at the general meeting about the decision to paint, and an ordinary resolution sought to select one of the two colour schemes.

The Applicants are of the view that the action of the committee to make a material change to the colour scheme away from the Mediterranean theme is unreasonable. They say that the new colours are not aesthetically complementary with the internal roadways.

The Applicants purchased in 2007, and the word “Mediterranean” is used in promotional and marketing material.

The body corporate committee made a submission through the body corporate manager Challenge Strata Management on 3rd August 2009. The body corporate has no objection to an interim order being made in this application, without any admission as to the merits of the final orders sought.

The committee says that no contractors for painting have yet been engaged and the body corporate undertakes not to do so until the final determination of the application.

Since the body corporate has agreed to the making of an interim order, I have ordered that no painting contractors are to be engaged until the final determination of this dispute or earlier discontinuance of this application.

In the meantime, I point out to both parties that amendments to the Standard Module as from 30th August 2008 provide a new section 163 Standard Module which enables the body corporate to make improvements to the common property by ordinary resolution if the cost of the improvement is within the “ordinary resolution improvement range” which is a sum equivalent to $2,000 x the number of lots in the scheme ie. $90,000, and not more than one such ordinary resolution for improvements is made in a financial year. (Section 163(2) Standard Module.) There is no such restriction if the improvement costs not more than the “basic improvements limit” which is a sum equivalent to $300 x the number of lots. (Section 163(1)(a) Standard Module.)

This matter will now be referred to the Commissioner under section 279(4) Act.

Queensland Body Corporate and Community Management Commissioner - Adjudicators Orders

Sanctuary Bay [2009] QBCCMCmr 278 (4 August 2009)