Silvapine Villas [2009] QBCCMCmr 332 (1 September 2009)

Last Updated: 9 October 2009

REFERENCE: 0741-2009

INTERIM ORDER OF AN ADJUDICATOR

MADE UNDER PART 9 OF CHAPTER 6

BODY CORPORATE AND COMMUNITY MANAGEMENT ACT 1997

Number of Scheme:	8160
Name of Scheme:	Silvapine Villas
Address of Scheme:	31 Nyanza Street WOODRIDGE QLD 4114

TAKE NOTICE that pursuant to an application made under the abovementioned Act by Shane and Rebecca Alexander, the owner of Lots 7, 20, 21, 27 and 50

I hereby order that pending a final determination of this application, the body corporate for Silvapine Villas community titles scheme 8160 (including through its committee) shall not: Do anything further to proceed with or implement the minuted resolution on Motion 17 at the Annual General Meeting dated 26 February 2009. Rely on the minuted resolution on Motion 17 or anything done before the date of this order as a consequence of the resolution to: (i) Claim a body corporate debt is owed by an owner of a lot included in the scheme or to claim an owner is liable for an instalment of the contribution fixed by the resolution. (ii) Commence or otherwise proceed with any debt recovery action against a lot owner. 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the date of this order, a further interim or final order for the application is issued, or until the application is withdrawn, rejected or otherwise ended (whichever is the earlier).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 0741-2009

“Silvapine Villas” CTS 8160

The scheme
“Silvapine Villas” community titles scheme 8160 is subject to the Body Corporate and Community Management Act 1997 (Act) and the Body Corporate and Community Management (Accommodation Module) Regulation 2008 (Accommodation Module).

Application
This application is by Shane and Rebecca Alexander (Applicants) against the Body Corporate questioning the minuted result of voting on Motion 17 at the Annual General Meeting dated 26 February 2009 (2009 AGM). The Applicants provided a copy of page 5 of the minutes indicating Motion 17 was carried by ordinary resolution by 6 votes to 5 with 1 abstention. The Motion proposed: “That the Body Corporate raises a Special Levy of $40,000.00/$800.00 per lot plus GST for the purpose of refurbishing the unit carports, due and payable on the first day of April, July and October 2009. Furthermore, that the Body Corporate Committee be authorised to arrange for appropriate quotations (minimum of 2) and to appoint a suitable contractor to carry out the refurbishment required up to a value of $40,000.00 plus GST.”

The Applicants claim a contribution of over $1000 was paid in 2008 to fix the carports and this work has not been completed. They provided a copy of two notices of contributions payable for 1 August 2008 to 31 December 2008, each including a contribution to “Special Fund Repl. Of Car Port Retaining Walls” of $577.50. The Applicants also provided a copy of two notices of contributions payable covering two periods: 1 April 2009 to 30 September 2009, each including a contribution to “Sinking Sp Carport Refurbishment” of $266.67. Each notice included a discount provision of $133.60. The Applicants have provided a Notice of Overdue Levies dated 10 July 2009 showing unpaid levies: ‘Sinking fund’ $133.60; ‘Sinking Sp’ $266.67 and ‘Arrears Notice Fee’ $22.00.

The Applicants want to be considered financial if this contribution is not paid before a general meeting is held as they want to have voting rights. They are also concerned about being charged late or arrears fees and about not being allowed the discount on contributions to the administrative and sinking funds. For these reasons, the Applicants also sought an interim order.

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, submissions were invited from the committee and Prudential Body Corporate Management Pty Ltd (Body Corporate Manager) regarding the interim order application, and a copy of the application was provided to the Body Corporate Manager for distribution to committee members.
Submissions were not made by the stated time. The Body Corporate Manager subsequently informed me that the initial notice had not been received. For this reason, I extended the time to make submissions to 28 August 2009.

Pat Johnson (chairperson) submits the special levy passed at the 2009 AGM had the votes recorded wrong and the levy should not have passed. She says that four of the members who were present at a meeting dated 10 July where it was decided to leave the vote as is until the next annual general meeting have paid the special contribution. The chairperson agrees the Applicants should not have to pay late or arrears fees or the special contribution until the outcome of this application. She states no work has been done on the carports.

Determination
Given section 279(1) of the Act, it is necessary to determine at the outset whether, because of the nature or urgency of the circumstances relating to the application, an interim order is in fact necessary or appropriate. The examples included in the Act under section 279(1) are suggestive of the usual circumstances where an interim order might be made. Both examples are in the nature of injunctive relief. Whilst the range of matters which might be the subject of an interim order is not capable of definition, the Applicants do need to establish that the circumstances of the application warrant the making of an interim order.

The Applicants question a resolution of the Body Corporate to fix a special contribution to be levied on each lot owner. It would seem the Body Corporate has acted on the resolution, the Applicants have not paid an instalment of the contribution, and as a consequence the Body Corporate has not allowed a discount on the payment of a contribution and has charged an arrears fee. The Applicants are concerned about ongoing charges and about being able to vote in general meeting while this matter is in dispute. It is apparent from the resolution that another instalment of the contribution is due in October. In my view, the Applicants have demonstrated urgent circumstances to warrant consideration of the interim order application.

To assist me in determining whether it is just and equitable to grant relief at this stage, before full and final consideration of all the issues raised, I consider it relevant to briefly consider whether the Applicants raise any serious legal question that will need to be determined. If a serious legal question is raised, then it may be appropriate to make an interim order to attempt to preserve the integrity of the matters in dispute pending the final determination.

The extract of the minutes of the 2009 AGM provided by the Applicants indicate Motion 17 was passed by ordinary resolution. The Applicants state the Motion was not passed. While the Applicants have not provided any material to substantiate this claim, it is significant that the chairperson has not disputed the Applicants’ statement. The chairperson submits it has been decided not to change the result of voting on Motion 17. It is uncertain where the claimed subsequent decision was made or the basis for making the decision. There is no evidence the Body Corporate has convened a general meeting since the 2009 AGM. Also, the relevance of some owners having paid the contribution is unclear.

The Motion proposed fixing a special contribution; a contribution that can be fixed if “a liability arises for which no provision, or inadequate provision, has been made” in a budget (s 139(2), Accommodation Module). There is no evidence that a liability had arisen with respect to carport refurbishment at the time of the 2009 AGM. Given the Motion’s terms, it would seem a liability had not arisen. In this regard, there is a question about the appropriateness of considering the Motion.

The Motion proposed authorising the committee to spend no more than $40,000 to refurbish carports. Unless the Body Corporate has set another amount as the relevant limit for committee spending, the spending limit for the committee is $10,000 (50 lots multiplied by $200, s 149 and schedule, Accommodation Module). The Body Corporate can specifically authorise spending above this limit (s 149(1)(a)). In most cases (and it would seem in this instance), the Body Corporate cannot do so if the spending is above the relevant limit for committee spending and the relevant limit for major spending (s 149(3)).
Unless the Body Corporate has set another amount as the relevant limit for major spending, the major spending limit for this scheme is $10,000 (schedule, Accommodation Module). A quotation above both relevant limits must be considered in general meeting (s 150, Accommodation Module). While the Body Corporate may have set other limits and while there may be a possibility that spending on the carport refurbishment may be less than the relevant limit for major spending, in the circumstances there is a question about the Body Corporate authorising the committee to spend the amount proposed in Motion 17.

In my view, the Applicants have raised a question to be determined about Motion 17. As I have indicated, there are other issues that may require consideration. The Applicants have shown that the Body Corporate has acted on the minuted decision by requiring owners to pay instalments of the special contribution. There may be an issue about the Body Corporate using the non-payment of an instalment of this contribution to disallow a discount on other contributions and to impose arrears fees. While the Applicants have not demonstrated that a general meeting is proposed to be called, I consider the Applicants are entitled to interim relief from paying an instalment of the contribution fixed by the minuted decision or any other amount sought by the Body Corporate as a consequence of their not having paid an instalment. I also consider it is appropriate that the interim order apply generally and not just to the lots owned by the Applicants. There is nothing to suggest the work proposed in the Motion is urgent or that it is vital that owners pay contributions to meet costs incurred. For these reasons, I have made the interim order.

I also note that the Applicants seek reimbursement of the application fees. Section 280 of the Act provides:

“280 Order for payment of application fees

(1) This section applies if—

(a) the applicant for an adjudication application made a conciliation application for the same dispute; and

(b) the respondent to the adjudication application was the respondent to the conciliation application; and

(c) the commissioner ended the conciliation application under section 252K because the respondent failed, without reasonable excuse, to participate in the department conciliation.

(2) If asked by the applicant, the adjudicator may order the respondent to pay to the applicant the amount paid by the applicant under section 239(1)(c) as fees for the conciliation application and adjudication application.”

It is apparent the Applicants made a conciliation application. I am satisfied from the Conciliation Certificate dated 28 July 2009 that the conciliation application ended because the Body Corporate did out make reasonable attempt to participate in conciliation. The Applicants have asked that the Body Corporate pay the conciliation application fee ($59) and the fees for the adjudication application ($123). This issue will be considered should the application proceed to final determination.

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.