Glades Easthill South [2009] QBCCMCmr 301 (18 August 2009)

Last Updated: 28 September 2009

REFERENCE: 0115-2009

ORDER OF AN ADJUDICATOR

MADE UNDER PART 9 OF CHAPTER 6

BODY CORPORATE AND COMMUNITY MANAGEMENT ACT 1997

Number of Scheme:	30074
Name of Scheme:	Glades Easthill South
Address of Scheme:	5 Easthill Drive ROBINA QLD 4226

TAKE NOTICE that pursuant to an application made under the abovementioned Act by Garret Condon, the Co-owner of Lot 91

I hereby order that the application for an order: That resolution passed outside committee meeting re Garden Mulcher on 15 September 2008 - Attachment C and Resolution passed at committee meeting on 18 November 2008 (Item 13, Headed Mulcher, Page 5 of Minutes) - Attachment D be declared invalid. is dismissed.

STATEMENT OF ADJUDICATOR’S REASONS FOR DECISION - REF 0115-2009

“Glades Easthill South” CTS 30074

Glades Easthill South community titles scheme (Glades Easthill South) consists of 106 lots and common property. The community management statement (CMS) for Glades Easthill South indicates that the Body Corporate and Community Management (Accommodation Module) Regulation 2008[1] (Accommodation Module) applies to the scheme. Department of Natural Resources and Water records show the scheme is registered as Survey Plan 141126, 145052, 149365 and 152040.

APPLICATION

Pursuant to the Body Corporate and Community Management Act 1997 (Act), this application was made by Garret Condon, Co-owner of Lot 91 (applicant) on 10 February 2009. The applicant sought the following order against the Body Corporate for Glades Easthill South (respondent):

That resolution passed outside committee meeting re Garden Mulcher on 15 September 2008 - Attachment C and Resolution passed at committee meeting on 18 November 2008 (Item 13, Headed Mulcher, Page 5 of Minutes) - Attachment D be declared invalid.

PROCEDURAL MATTERS

A related conciliation application was lodged on 23 January 2009[2]. On the advice of Commissioners’ Office staff that application was withdrawn and the current application lodged.

Under section 243 of the Act, a copy of the application was provided to the Body Corporate, with an invitation to the Committee and all owners to respond to the matters raised by the application. Submissions were made by the Committee and 26 owners. The applicant inspected the submissions received and made a written reply.[3]

An issue arose with the distribution of the application. On 16 February 2008 the Commissioner’s Office requested asked the Body Corporate to distribute the application and various related documents to owners. Shortly afterwards the Office was alerted to concerns that not all documents were distributed. The Office contacted the Body Corporate Manager (BCM) who identified an oversight with the distribution and agreed to rectify it. I understand this occurred on 24 February. The Office advised owners could seek an extension of time to make a submission if necessary because of the delay. I have no indication that any party was prevented from responding to this application or otherwise disadvantaged because of the error in the distribution of the application.

A dispute resolution recommendation was made referring the dispute to departmental adjudication. I then investigated the dispute, pursuant to section 271 of the Act, which included reviewing the application and submissions and seeking further information from the parties as detailed below.

MATTERS IN DISPUTE

The application relates to the Body Corporate’s decision to purchase a garden mulcher. The circumstances of the dispute, as outlined in the material provided, can be summarised as follows.

On 15 September 2008 the Committee passed a resolution outside a committee meeting to purchase a garden mulcher with towing attachment at a net cost of $5,454.55. The motion was distributed to seven committee members and was passed with four votes in favour and nil against. The matter was apparently considered again at a Committee meeting on 18 November 2008, in which the approval of the purchase received six votes in favour and nil against.

The November minutes note the mulcher will benefit owners through savings of “...approximately $2,534 to owners of their Council rates as the bin will no longer be required”. It said one green bin would be retained for items that could not be mulched, and further savings would arise from not having to purchase mulch for the gardens. It also advised owners that the mulcher would be available to owners to use during times as designated by the Committee. Further, the minutes indicated that the asset register would be updated with the new mulcher.

The applicant provides an extract from the caretaker’s contract as follows:

2.5 Materials and Equipment

• (a) The Caretaker shall pay for all equipment necessary to enable the Caretaker to perform the Caretaking Duties. The Body Corporate shall pay for all out of pocket costs for repair and maintenance of the Common Property.
• (b) The Body Corporate shall pay for all chemicals, fuel, fertiliser, plants, gardening supplies and consumables which directly relate to the carrying out of the Caretaking Duties.
  

The applicant says the mulcher was purchased for the use of the caretaker. He argues that, as the caretaker is responsible under the contract to provide all equipment necessary for his duties, if a mulcher is necessary the caretaker should pay for it and the Body Corporate cannot pay for it from Body Corporate funds. He argues the Committee has spent funds which it should not and need not have spent. The applicant asserts also that the Committee has in effect varied the caretaker’s contract without reference to or approval by owners at a general meeting. As such the applicant argues the Committee is in breach of the Code of conduct for committee voting members[4].

On 3 October 2008 the applicant wrote to the Secretary outlining his objections to the purchase. A response from the BCM on 9 December 2008 said the applicant’s letter had been considered by the Committee which noted that the resolution was passed in accordance with the legislative requirements, and the mulcher is owned by the Body Corporate and will be included in the Body Corporate’s asset register. The applicant says this failed to mention the concerns in his letter.

The applicant says the mulcher was subsequently purchased and is housed in a Committee member’s garage. He claims the caretaker has submitted substantial invoices for the supply of labour to use the mulcher, such that he has been given free equipment and paid to use it.

Submissions

The submission by the Chairperson and Secretary of the Committee, and circulars issued by the Committee to owners on the matter, include the following comments:

­ The decision to buy the mulcher was in the best interests of the Body Corporate as it provides benefits to all owners.
­ The large volume of green waste collected twice weekly by the Gold Coast City Council (Council) costs $2,534 a year. The Body Corporate purchases mulch for the gardens, at over $800 last year. The Committee discussed alternatives to reduce these costs.
­ The applicant was present at a Committee meeting on 26 August 2008 when the purchase of a mulcher was discussed. The minutes record the caretaker’s advice on the benefits of a mulcher and the Committee’s discussions on the type of mulcher required. The Committee resolved to arrange for a demonstration and to research the pros and cons of a mulcher.
­ Owners were advised through these meeting minutes that the purchase was contemplated.
­ After viewing mulcher demonstrations the Committee agreed to the purchase on 25 September and confirmed this on 18 November, when the applicant was present.
­ The new mulcher was delivered in late September and stored for two weeks in the Secretary’s garage until an appropriate storage place could be established.
­ The new mulcher is large enough to handle the large amount of material which had been taken away in Council bins and is expected to pay for itself in two years.
­ The mulcher will save $2,534 in Council charges and some $500 in the cost of mulch.
­ A mulcher was previously purchased for $1,990 in November 2004, with the applicant one of the Committee members to approve the purchase. The mulcher proved inadequate for the job and was sold by early 2006 for $785.
­ The mulcher is not equipment that is necessary to perform the caretaker’s duties, but it is a cost saving device for the Body Corporate.
­ There is no variation to the caretaker’s agreement by the purchase of the mulcher.
­ There is no issue with workplace health and safety as operators have the proper protection.
­ They refute claims that the caretaker has submitted invoices for labour to use the mulcher.
­ They consider the application is vexatious which will cost them over $1,000 in BCM fees and they request that these costs be awarded against the applicant.

Thirteen submissions from owners oppose the application and support the Committee’s decision to purchase the mulcher. Some comments include:

­ The Committee acted in the best interests of owners.
­ The mulcher will save on the cost of removing garden waste and reduce Council rates.
­ The mulcher will save on the cost of outside contractors.
­ The mulcher will save on the need to buy expensive mulch.
­ The mulcher will have environmental benefits in reducing waste sent to landfill.
­ The mulcher will improve the upkeep of the gardens, which will maintain property prices.
­ The mulcher will remain a Body Corporate asset.
­ If the caretaking agreement says the caretaker must pay for all equipment it may be time to update the agreement.
­ The applicant was on the Committee that purchased a mulcher in 2004 for the Body Corporate, with no indication of a variation of the caretaker’s contract.
­ The application is frivolous, petty and time wasting.
­ The applicant has a long history of interfering.
­ There is concern about the costs associated with the application.
­ There is a request that any order be made that the applicant reimburse the Body Corporate for its costs in relation to this application.

Thirteen submissions from owners support the application. These include comments such as:

­ There are concerns as to the process followed for the purchase of the mulcher, particularly the lack of consultation with owners regarding the amendment to the agreement.
­ The caretaking agreement requires the caretaker to purchase and own all equipment required to perform their duties.
­ If the mulcher is not necessary to perform the caretaker’s duties, why was it bought and why has the caretaker being paid to use it?
­ The responsibility for maintenance, service, insurance and other running costs is queried.
­ The real reason previous mulcher was sold was that the caretaker wouldn’t use it because it was too much work or two time consuming. It proved to be a waste of money.
­ The current Committee were informed of the outcome of the previous mulcher purchase.
­ The argument that a previous Committee did not use due process to purchase a mulcher does not mean that it is ok for the current Committee to do the same.
­ There is a query that the mulcher is being stored under a plastic tarpaulin in a humid climate. One owner is concerned owners will later be asked to pay for a shed to house the mulcher.
­ The Committee claims the caretaker has not invoiced the Committee for labour to use the mulcher, but an invoice from the Hanson Family Trust dated 29 November 2008 in the amount of $346.50 was for labour to remove soggy garden waste that had been set aside to put through mulcher but they had been advised would clog the mulcher. The invoice also refers to a quantity of fresh trimmings being put through the mulcher and stored.
­ The caretaker is stockpiling trimmings to mulch later and then charging the Body Corporate to remove material that he let get too soggy to mulch.
­ Another invoice apparently from Clean Cut Tree Service dated 8 August 2008 was in the amount of $4,955 for “tree work” and a travel tower hire. Some owners say the same contractor was brought back in January 2009, with no invoice to date, to do more trimming and mulching and the contractor took the mulch away. The owners claim the cuttings could have gone through the new mulcher and so why was it not used.
­ There are queries about workplace health and safety issues for owners using the mulcher as well as insurance issues.
­ Concerns are raised regarding the delay in the distribution of the application attachments and a circular distributed to owners.

The applicant’s reply to submissions includes the following additional comments:

­ The Committee made the decision to purchase, own, maintain, insure and house the mulcher at the request of the caretaker. The decision was not fully researched by the Committee or the caretaker, and neither considered the implications of the purchase.
­ The Committee claims the mulcher is not ‘necessary’ but will give long term savings.
­ When he was on the Committee a mulcher was purchased at the request of the then caretaker. He believes it was sold because the caretaker did not have time to use it.
­ In Committee minutes on 17 February 2009 are referred to. These note the caretaker is trialling different plant material through the mulcher as not all will mulch. It also comments that there is too much plant waste in the estate to not have a Council pick-up bin, and that Clean Cut Services did another hard cutback which removed 6 tonne of plant matter.
­ The applicant queries what the savings are if an additional waste bin is required.
­ The supplier of the new mulcher says that green waste should be mulched soon after cutting as the machine cannot handle wood which has dried out.
­ If the caretaker is occupied with mulching, outside contractors will be employed apparently at least twice a year for some $8,000 to do the regular pruning.
­ Claims of no caretaker invoices to use the mulcher are refuted with the November invoice.
­ The mulcher will required permanent housing if it is to be maintained in working order.
­ He queries who will decide what costs for the mulcher will be attributed to the Body Corporate use and what to the caretaker’s rental obligations.
­ The offer for owners to use the mulcher is ‘ludicrous’ because the supplier advises that training is needed prior to use.
­ The mulcher puts additional stress on the caretaker and gives him less time to do the usual mowing and trimming duties.
­ The Committee were advised of the issue with the first mulcher.
­ The fact that there was one mistake does not make a second ok.
­ In six years in the scheme this is the first application he has lodged with the Commissioner.

At my request, the Commissioner’s Office contacted the Body Corporate seeking comment on the additional arguments raised in the applicant’s reply. The Body Corporate provided the following:

­ Information about the size of the scheme and landscaping and garden maintenance issues.
­ A copy of the caretaking agreement is provided, noting that this has not been altered since it was signed (27 March 2002) and that a Garden Maintenance Policy as referred to in the agreement has never been adopted.
­ The caretaking duties do not include pruning. It is doubtful that the caretaker has any pruning responsibilities under the agreement but the current caretakers have agreed to maintain, including pruning, the area at the front of each home with contractors engaged to prune other areas. The contractor areas, primarily the boulder wall areas, have been maintained by contractors paid by the Body Corporate since the scheme was established.
­ The opinion of the caretaker in February that a bin may still be required has not proved to be the case. Over 90% of cuttings generated by the caretaker have been mulched and used on gardens. Matter unable to be mulched has been placed in a bin hired by the caretaker.
­ The caretaker bin is estimated to cost the Body Corporate $300 over 12 months, against a saving of $2,534 per annum on the returned Council bin.
­ No mulch has been purchased since the new mulcher was bought. This has resulted in an estimated saving of $1,200 to $1,500 in mulch expenditure over 12 months.
­ The original estimate of a two year payback on the cost of the mulcher now appears to be conservative based on current experience.
­ A contractor undertook pruning on 8 August 2008 prior to the decision to purchase the mulcher. Pruning in January was necessary because of significant growth since August. The use of contractors has no bearing on the decision to purchase a mulcher.
­ The mulcher is stored under a waterproof cover that provides adequate protection.
­ Insurance of the mulcher is included in the existing policy with no additional premium.
­ At the time of purchase the Body Corporate and the caretaker agreed that the caretaker would not be paid additional remuneration to use the mulcher.
­ Two committee members have been trained to use the mulcher and provide assistance, at no charge, when the volume of cuttings are excessive. There are now five trained operators and more can be trained on request.
­ Invoices from the caretaker in November 2008 are unrelated to the mulcher, relating to the removal of leaves collected and stored prior to the purchase of the mulcher which had been damaged by rain and needed to be disposed of.
­ The costs claimed by the applicant are disputed. The use of contractors will not vary. There are no additional labour costs. There is no need for a shed.
­ A second set of blades has been purchased for $68 and are expected to last three years.
­ The mulcher is a sound financial outlay for the Body Corporate.
­ The caretaker did not request the mulcher – it was suggested by the committee and individually researched by the caretaker and two committee members.
­ Under the caretaker’s duties it is not necessary for the caretaker to own a mulcher.
­ The previous caretaker advised that the previous mulcher was too noisy and not adequate for the work involved.
­ The caretaker reports that the new mulcher handles fresh and dried material well.
­ The purchase of the mulcher was well researched and costed prior to the decision.

The applicant’s response to this information refers to an amendment to the gardening policy which forms part of the caretaker’s contract and claims the cost of this amendment is more than the savings from the mulcher. Comment is made about the development of the scheme and garden maintenance responsibilities. He reiterates that it is contrary to the caretaking agreement for the Body Corporate to own equipment for the use of the caretaker.

JURISDICTION

Section 276(1) of the Act provides that adjudicators 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 claimed or anticipated contravention of the Act or the CMS; or the exercise of rights or powers, or the performance of duties, under the Act or the CMS; or a claimed or anticipated contractual matter about the engagement of a person as a body corporate manager or service contractor; or the authorisation of a person as a letting agent.

It is within the jurisdiction of a department adjudicator to consider the validity or reasonableness of a Committee resolution, and to the extent that this application addresses that matter I am satisfied that the application falls within the legislative dispute resolution provisions.[5]

However, certain body corporate disputes, described in the Act as ‘complex disputes’[6] cannot be determined by a departmental adjudicator. Pursuant to section 229(2) of the Act, these matters are reserved for the determination of the Commercial and Consumer Tribunal or a specialist adjudicator appointed by the Commissioner and with the agreement of the parties under section 264 of the Act. Complex disputes include disputes about specified ‘contractual matters’.

In addition, it is a general principle that the interpretation of contracts and the application of contractual law is beyond the scope and expertise of departmental adjudicators. Therefore, to the extent that the applicant seeks interpretation or enforcement of the caretaking contract, whether within the scope of a complex dispute or not, the issue would be for the Commercial and Consumer Tribunal, or a specialist adjudicator, or a court of competent jurisdiction to determine as applicable.

An order may require a person to act, or prohibit a person from acting, in a way stated in the order.[7] An adjudicator's order may contain ancillary and consequential provisions the adjudicator considers necessary or appropriate.[8]

DETERMINATION

The key issues for consideration in this matter are whether the Committee resolutions to purchase the garden mulcher where valid under the legislation and were reasonable.

Authority to approve purchase

The resolutions approved the purchase of a Body Corporate asset at a net cost of $5,454.55. Unless the Body Corporate has set some other limit, and I have not been advised that they have, the Committee spending limit in this scheme is $21,200 ($200 x 106 lots)[9]. There is no indication that the Body Corporate has resolved that such matters are restricted issues, and the purchase does not otherwise fall within the scope of a restricted issue for the Committee[10]. On that basis the purchase and expenditure was prima facie within the authority of the Committee to approve.

Contractual terms

The applicant claims the Committee was not authorised to approve the purchase because it amounted to an amendment to the contract with the caretaker. Pursuant to section 112 of the Accommodation Module, the Body Corporate can only amend a contract engaging a service contractor if passes an ordinary resolution in which no votes are exercised by proxy and the material forwarded for the meeting includes the terms and effect of the amendments. In certain circumstances the vote must also be by secret ballot. Clearly the Body Corporate has not passed a resolution to amend the caretaker’s agreement and the Committee has no authority to do so.

However I do not accept the applicant’s argument on this matter. There is nothing before me to indicate that the Committee had any intention of amending the contract or that there has been any actual variation or attempt to vary to the actual or terms of the contract.

The fact that a party may have a requirement to do a certain thing under a contract does not mean that the failure of that party to do that thing, or the decision of the other party to the contract to do the thing themselves, amounts to an amendment to the contract. Rather it is a decision not to strictly enforce the contract. If the caretaker was if fact required to purchase a mulcher under their contract (which I will comment on further below), the decision of the Committee to purchase a mulcher itself is simply a failure to, or a decision not to, strictly enforce compliance with the contract. Whether that decision is reasonable or justifiable or not is a separate question. For these reasons I am satisfied that there has been no variation of the contract terms themselves.

Owner consultation

Some owners have suggested that there should have been more consultation with owners on the decision. While this may be desirable, and perhaps should be contemplated by the Committee in future, there is no such legislative requirement.
Owners are notified of matters before a committee, receive minutes of committee meetings [11], and are able to attend committee meetings[12]. Through these mechanism owners are put on notice of Committee decisions and are able to discuss their concerns with the Committee. To mandate a higher level of consultation on Committee business would arguably defeat the purpose of having a Committee to consider the day-to-day business of a body corporate. Notwithstanding that, there is nothing that prevents an owner putting a motion to a general meeting seeking to revoke a Committee decision, or from challenging a decision in this Office.

Given these issues, it follows that the Committee’s decision was one that it was technically entitled to make under the legislation.

Reasonableness

The Committee clearly had the legislative authority to purchase the mulcher. The question then is whether its decision was reasonable in the circumstances.

One of the secondary objects of the Act is to “balance the rights of individuals with the responsibility for self management as an inherent aspect of community titles schemes.” In light of this objective, a decision of a body corporate should only be overturned if it is unreasonable or unlawful. To do otherwise would seem to be an “unwarranted interference in the ability of the body corporate to make its own decisions, and to independently manage its affairs as contemplated in the secondary objects of the Act.”[13]

Section 94(2) of the Act requires that a body corporate must act reasonably in performing its obligations, including in making or not making decisions. Similarly, section 100(5) of the Act provides that a committee must act reasonably in making a decision. Where this does not occur, an adjudicator may intervene to make an order that is just and equitable to resolve a dispute, including declaring a decision purportedly passed to be void or to give effect to a motion or proposal that was not passed.

Authorities indicate that a legislative obligation to act reasonably is satisfied if the decision is ‘objectively’ reasonable[14] and that the test of reasonableness requires a balancing of factors in all the circumstances according to the ordinary meaning of the term ‘reasonable’[15]. There is no particular formula for reasonableness. Ultimately, it is a question of fact. The principles articulated in the case law include that the expression 'reasonable' should be given a broad, commonsense meaning[16]; that the question is not whether a decision was “correct” but whether it is objectively reasonable[17]; and that a "logical and understandable basis for the decision" is a factor in determining the reasonableness of a decision but does not necessarily mean a decision is reasonable as important matters may have been overlooked or discounted[18].

I will consider in turn the various issues raised by parties in relation to the decision to purchase the mulcher. In weighing these issues up, I will have particular regard to the information before the Committee at the time it made its respective decisions.

It is arguably relevant to consider whether the Committee failed to investigate or take into account obviously relevant information before making a decision. However it is arguably not appropriate to overturn a decision that was otherwise justifiable if facts later come to light which, had they been known at the time, may have affected the decision or the reasonableness of the decision.

Cost savings

The primary arguments for the mulcher were the savings in the cost of mulch and the Council bin. These are logical considerations and, based on the information before me, appear to have been borne out in period since the mulcher was purchased.

The applicant refers to trimming work done recently by outside contractors. The applicant suggests such work will cost some $8,000 a year. However I am not satisfied that the applicant has demonstrated that the purchase of mulcher will require the Body Corporate to spend $8,000 that it would not otherwise have spent. There is some implication that there is a need to engage outside contractors to do work that the caretakers will no longer have time to do because they are busy mulching, but this is not explained or substantiated. The Body Corporate asserts that external contractors were engaged prior to the purchase of the mulcher for these tasks.

I am not satisfied on the evidence provided that the Body Corporate has incurred additional caretaker labour costs arising from the mulcher. It seems that the November 2008 invoice was for work unrelated to the mulcher purchase.

Queries are raised as to the responsibility for the operating costs of the mulcher, including maintenance. Of course these issues should be taken into account by any body corporate in deciding to purchase an asset of this nature, and they should be a factor in evaluating the financial pros and cons of the decision. However, if the mulcher was purchased by and owned by the caretaker, it could be argued that Clause 2.5 of the caretaker’s agreement would still require the Body Corporate to be responsible for consumables associated with the operation of the mulcher (such as fuel and possibly replacement blades). Moreover, I am not satisfied from the material provided that the mulcher will result in significant maintenance costs.

The applicant and some submissions have said there will be an additional cost to construct a shed to house the mulcher. The applicant suggests $8,000 for this shed and one submission suggests $10,000. However this appears to be raised as mere speculation, without substantiation that there is an intention to build a shed, or that a shed is actually necessary, or any clear basis for the claimed costs of such a shed. Certainly the Body Corporate argues it is not necessary.

Similarly, the applicant suggests there will be a need to spend some $2,000 for a ‘pen’ to house mulch. In support of this the applicant provides invoices from the caretaker in early 2008, which includes $924 to “construct and build mulch area”. The applicant does not substantiate the claim of $2,000 and gives no indication of how the other amounts on the invoices are relevant. However, more importantly, the applicant does not explain why the fact that a mulch storage area was constructed a year ago indicates another is required. Again, this appears to be mere speculation.

Previous mulcher

An issue raised on both sides is the previous purchase of a mulcher which apparently proved unsuccessful. If it is the caretaker’s responsibility to purchase a mulcher, it is unclear why the applicant agreed in 2004 to the Body Corporate purchasing a mulcher. The fact that a Committee acted inappropriately in the past (and I make no comment on whether the 2004 decision was appropriate or not), does not make a later similar decision appropriate. It is also arguable that the previous decision may have led the Committee to believe it was legitimately able to buy a mulcher or at least that there was no inherent problem with purchasing a mulcher. The fact that a previous Committee considered that there were reasons to purchase a mulcher appears to somewhat support the current Committee’s reasoning.

Others imply that the ‘failure’ of the previous mulcher purchase should have been a reason not to purchase this mulcher. The current Committee were apparently aware of the previous purchase before making their decision. I am not satisfied that the circumstances are directly comparable such that the circumstances of the previous purchase should have convinced the Committee not to purchase this mulcher. It was not unreasonable of the Committee to believe that a much larger machine would resolve the previous problems. A related issue was that the previous caretaker allegedly refused to use the mulcher. However I consider that it would have been reasonable for the Committee to believe that this problem would not arise with a different caretaker, who argued supported the purchase and believed would be more suitable to the task.

I have received no evidence that the new mulcher is not adequate to the task currently required of it and the Body Corporate asserts that it is adequate. There is also no evidence that the current caretaker is not actually using the mulcher.

Insurance

In regard to insurance, I assume the Body Corporate already has public risk insurance covering the common property and scheme assets, as required by section 185 of the Accommodation Module. If required, the Body Corporate can contact their insurer to clarify whether the ownership of a mulcher is required to be disclosed to the insurer or has any impact on the premium for public risk insurance. Similarly, it may be appropriate to confirm whether the current insurance policies held by the Body Corporate would cover the theft of or damage to the mulcher as a Body Corporate asset. The Body Corporate asserts that the current insurance policy covers the mulcher, although details are not provided. Ultimately the applicant has not demonstrated any significant risk or financial impact in this regard, or that there is inadequate insurance coverage.

Health and safety

Concerns are also raised regarding health and safety issues regarding the use of the mulcher. The Committee have commented that operators have the ‘proper protection’ to use the mulcher. It appears that the applicant’s primary concern relates to the suggestion that the mulcher be available for owners to use. It is unclear whether any owner in fact has any interest in using the mulcher but if owners do use mulcher the Body Corporate should ensure that such owners are first given any necessary instruction or training in how to use the mulcher. It appears this has occurred with some committee members. Regardless, I do not see how this issue is an argument for the Body Corporate not purchasing a mulcher at all.

Caretaker’s responsibilities under their contract

For the reasons outlined above (under “Jurisdiction”), it is beyond the scope of my role to determine whether it is in fact a requirement of the caretaker under the contract to purchase a mulcher. If owners believed that this was a requirement which they wish to enforce, they could seek a Body Corporate resolution to enforce the contract in this respect. Given the complexity of contract law, parties should consider seeking legal advice on this matter, and should be conscious of the costs of such advice and of pursuing any legal action in respect of the contract.

Without seeking to make any determination or to advise the parties on this matter, I will make some observations based on the comments in the applications and submissions. I would suggest that it is not automatically clear that the contract requires a mulcher to be purchased by the caretaker. To determine this question would require consideration of a range of matters including the specific duties required of the caretaker under the contract and an interpretation of what was actually ‘necessary’ (as opposed to preferable or desirable) to undertake those specific duties. However, the Committee’s position that a mulcher is desirable for the Body Corporate in the respect of cost savings for the Body Corporate, but is not actually necessary for the performance of caretaker’s duties, is certainly an arguable one.

If in fact the caretaker was required to purchase a mulcher under the contract of engagement, there is a question as to why the Body Corporate, including previous Committees, have apparently not made any attempt to request or require the caretaker to purchase a mulcher previously.

Comments have also been made about whether the caretaker has invoiced the Body Corporate in relation to the use of the mulcher. I have considered this issue in regard the question of the cost effectiveness of the mulcher. However, for the same reasons that it is beyond my role to determine whether the caretaker is required to purchase a mulcher or not, I am similarly unable to make a determination as to what the caretaker is or is not able to charge for under the contract.

Frivolous and vexatious applications

Some submissions have argued that the applicant is a frequent complainant, that this application is frivolous or vexatious and that the applicant should pay the Body Corporate’s costs in responding to the applicant.

Section 270(1)(c) of the Act provides that an adjudicator may dismiss an application if satisfied that the application is frivolous, vexatious, misconceived or without substance. If an application is dismissed on that basis, section 270(3) empowers an adjudicator to award costs incurred by the respondent in defending the application without merit. Costs may be awarded up to $2,000 against the applicant and, in awarding costs, the adjudicator may have regard to previous applications made by the applicant.

In the circumstances I am not satisfied that there is any basis to determine that the application is frivolous and vexatious or award costs in this matter. Although the applicant has not been successful in this matter, he has raised a genuine issue.

Conclusion

I am satisfied that in deciding to purchase a garden mulcher the Committee has not amended or attempted to amend the contract engaging the caretaker. Moreover, I am satisfied that the decision to purchase the mulcher was within the authority of the Committee to decide.

It is beyond the scope of my role to interpret the contract with the caretaker and to make any determination as whether the caretaker is in fact required to purchase a mulcher, and so whether there has been any failure by the Body Corporate to enforce the requirements of the contract. Parties may wish to pursue these questions separately if appropriate.

Having regard to all the issues raised, and given the information before the Committee at the time the decisions were made, I not satisfied that the applicant has sufficiently demonstrated that the Committee’s decisions were unreasonable. Although there are clearly differing views on whether the mulcher should have been purchased, and whether it will ultimately be a cost effective option for the Body Corporate, I am of the view that it was a justifiable decision for the Committee to make. For that reason I have dismissed the application.

The dismissal of the application does not prevent the applicant or any other owner submitting a motion to rescind or overrule the Committee decisions. However, as the mulcher has already been purchased, the proponents of such a motion should also consider whether they also wish to seek a resolution to sell or otherwise dispose of the mulcher, recognising that this may result in a financial loss to the Body Corporate.

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[1] As of 30 August 2008 the new Accommodation Module came into force, replacing the Body Corporate and Community Management (Accommodation Module) Regulation 1997 which applied until that date.
[2] Reference 0059-2009
[3] See sections 246 and 244 of the Act respectively
[4] Schedule 1A of the Act
[5] See sections 227, 228, 276 and Schedule 5 of the Act
[6] Defined in Schedule 6 of the Act
[7] Section 276(2) of the Act
[8] Section 284(1) of the Act
[9] Section 150 of the Accommodation Module
[10] Section 42 of the Accommodation Module

[11] See section 45 of the Accommodation Module regarding the giving of notice of committee meetings, section 54 which includes the provision of notice of motions voted on outside committee meetings, and section 55 which provides for the distribution of minutes of committee meetings.
[12] Subject to the requirements of section 51 of the Accommodation Module
[13] Adjudicator K Ryan in Massey Lodge [2004] QBCCMCmr 356 (15 July 2004), paras 13- 14

[14] Greiner v Independent Commission Against Corruption (1992) 28 NSWLR 125.

[15] Secretary, Department of Foreign Affairs and Trade v Styles [1989] FCA 342; (1989) 88 ALR 621.

[16] Ashworth Frazer Limited v Gloucester City Council [2001] UKHL 59; [2001] 1 WLR 2180 at paragraph 5.

[17] Commonwealth Bank of Australia v Human Rights and Equal Opportunity Commission (1997) 150 ALR 1 pp34, 38.

[18] Commonwealth Bank of Australia v Human Rights and Equal Opportunity Commission, pp34, 38.