Jadran Court [2009] QBCCMCmr 74 (27 February 2009)

Last Updated: 9 March 2009

REFERENCE: 0539-2008

ORDER OF AN ADJUDICATOR

MADE UNDER PART 9 OF CHAPTER 6

BODY CORPORATE AND COMMUNITY MANAGEMENT ACT 1997

Number of Scheme:	13870
Name of Scheme:	Jadran Court
Address of Scheme:	54 Frank Street LABRADOR QLD 4215

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

Joseph Stonham, the Owner of lot 2

I hereby declare that the Body Corporate is not liable for the cost of replacing of the fence which separates the lot 2 exclusive use area from the balance of common property. I further declare that the owner of lot 2 is not required to make the following payments to the body corporate: $639.50 being the costs incurred by the chairman in attending a conciliation between the body corporate and the applicant; $182.87 for “time spent by Chairman with cement contractor, backhoe driver, tow truck driver, police & Mr Stonham”; $75 for mowing of the lot 2 exclusive use area in July 2008. I further declare that the hot water system servicing lot 1 may remain in its current location in the lot 2 exclusive use area. I further declare that proceeds received by the body corporate as a result of the resumption of scheme land are to be paid into the administrative account in accordance with section 146 of the Body Corporate and Community Management (Standard Module ) Regulation 2008.

STATEMENT OF ADJUDICATOR’S REASONS FOR DECISION - REF 0539-2008

“Jadran Court” CTS 13870

THE SCHEME

Jadran Court, Community Titles Scheme 13870, is a subdivision of 11 lots recorded under a building format plan of subdivision (formerly a building unit plan) and is regulated by the Standard Regulation Module.

APPLICATION

The applicant, Mr Joe Stonham has submitted a dispute resolution application under the Body Corporate and Community Management Act 1997 (the Act) seeking an interim order and a number of final orders.

The interim order sought was as follows:

An Interim Order to prevent the creation of a circular driveway and three car parking spaces at a cost of $10,450; additional costs of $1210 for clearance works to facilitate the driveway; and the expenditure of such funds from the sinking fund.

On 15 July 2008 I declined to make such an interim order as the subject resolutions were carried by a majority of lot owners present and voting at the general meeting, and having regard to the recent appeal case of Dindas & Anor v Body Corporate for One Park Road Ors [2006] QDC 302 I was of the view that the power of an adjudicator to make an order that is just and equitable does not entitle an adjudicator to override a legitimate exercise of voting power.

The applicant has also sought the following Final outcomes:

1. An Order to hold the Body Corporate liable for the cost of replacement of the swimming pool fence which was in serviceable order and met the safety requirements of GCCC which has been demolished and for replacement of the new 1.2 metre pool fence section with a solid fence 1.8 M high and for reconstruction of the pool shed previously approved.

2. An Order to reimburse or cancel costs illegally allocated against unit 2 , such costs to be established by an audit of all financial records.

3. An Order to have the hot water cylinder located within the unit 2 EUA but serving the office and laundry of the motel/unit 1, removed from the EUA.

4. An Order to ban the use of Jadran Court Motel Office and Laundry to conduct any new business beyond that approved by a previous order.

5. An Order to have the proceeds of the sale of land to the Roads Authority dispersed to owners in accordance with the Table of entitlements.

Attached to the application were the following documents:

• Attachment “A” - Letter from Strata and body Corporate Services dated 11 February 2008, requesting the applicant to replace the asbestos – cement fence boundary fence with a timber paling fence and to install a fence around the swimming pool. The letter also pointed out that pursuant to section 123 of the Act, where a lot owner fails to maintain their lot, the body corporate is entitled to undertake maintenance work and recover the reasonable cost of carrying out the work from the lot owner. Attached to the letter were a number of quotations;
• Attachment “B” - Reply from Mr Stonham dated 2 April 2008 in which he denies liability for undertaking the work and stating that he has had no prior notice from the body corporate requesting him to undertake the work.
• Attachment “C” - Letter from Mr Stonham to Mr Humphrey, Chairman of the body corporate, requesting removal of a garden shed which, he alleges, has been put in place without GCCC approval;
• Attachment “D” - letter from the applicant to Mr Humphrey, Chairman of the body corporate, requesting replacement of the exclusive use area perimeter fence which had been demolished. This request was rejected by the three members of the committee including Mr & Mrs Humphrey (see attachments E & F).
• Attachment “G” - letter from the applicant to Mr Humphrey, requesting him to remove his hot water system from the exclusive use area;
• Attachment “H” - Letter from the applicant to the Chairman of the body corporate, Mr Humphrey, requesting permission to paint a boundary line and stop sign across the northern driveway defining the EUA.
• Attachment “I” - Letter from the applicant to the Chairman of the body corporate, Mr Humphrey, requesting permission to erect a brick wall and electrically operated gate to define the EUA boundary between the motel office and unit 2.
  

BACKGROUND

Jadran Court, Community Titles Scheme 13870, consists of 11 lots and is regulated by the Standard Regulation Module. I understand that lot 1 includes 5 motel units and it would appear that the original developer of the complex, Mr. Versic, resided in lot 2 from where he conducted a letting business for the motel rooms and units in the scheme. Lot 2 is entitled to exclusive use of a common property area which is approximately one quarter of the total site area of 2,398 squares. In the mid to late 1970’s, a swimming pool were built on the exclusive use area at the rear of lot 2.

At an unknown time, a small lean-to structure was erected on the southern side of lot 2. In 2001 a three space carport was erected and used as a parking area, wholly within the lot 2 Exclusive Use Area (EUA). It is claimed that during 2003 Mr Humphrey closed the pool in the lot 2 exclusive use area without the consent of the owner of lot 2. Mr Humphrey also mowed the grass, engaged pool specialists to restore the pool water to acceptable standards and made an area of approximately 10 metres by 15 metres available to all guests as well as the EUA pool. Following disputes regarding the status of the lot 2 common property area, it was determined in a previous adjudication by this Office (500-2003) that lot 2 is entitled to exclusive use of the relevant area in accordance with a by-law created pursuant to a unanimous resolution dated 14 May 1974.

In recent years a number of dispute resolution applications have been lodged with this office regarding Jadran Court. The applicant claims that Mr & Mrs Humphrey, the owners of lots 1, 5 & 6 have conducted an “ongoing vindictive attack” against him under cover of the committee because he is entitled to exclusive use of a large area of common property which they covet.

On this occasion the applicant sought one Interim order and numerous final outcomes. On 15 July 2008 I declined to make the requested interim order as it appeared to me that the decision to undertake the subject works was made by way of a valid resolution of the body corporate in general meeting. Consequently I am now considering the applicant’s request for the final outcomes listed above.

The applicant believes that Mr & Mrs Humphrey are conducting a vendetta against him with a view to taking over the lot 2 EUA and/ or displacing ownership of lot 2. He believes that the committee is continuing to unfairly claim costs and charges against him including an account for $3,500 to replace a fence which he believes was “serviceable”. However the applicant claims that requests by the owners of lot 2 to ensure quiet enjoyment by his tenants are denied or ignored. He also claims that Mr & Mrs Humphrey effectively constituted “the committee” until October 2007 when a larger body corporate committee was appointed.
However no meeting of the committee was held until 8 April 2008 and therefore, there is no committee endorsement of the instruction issued regarding unit 2 between October 2007 and 2008.

The next outcome sought by the applicant is an order to reimburse or cancel costs illegally allocated against unit 2, such costs to be established by an audit of all financial records. The applicant states that the accounts for the scheme have never been audited and the Humphreys continue to claim a range of costs against lot 2 including the following:

• Costs associated with a conciliation between the body corporate and the applicant;
• “time spent with cement contractor, backhoe driver, tow truck driver, police & Mr Stonham;
• Mowing of lot 2 exclusive use area e.g. $75 for grass cutting in July when there was minimal growth;;
• Work done “under Bylaws”.
  

The next outcome sought relates to a hot water system housed beneath a staircase on the exclusive use area in a small cupboard like structure with extensive termite damage. The applicant claims that until this structure and the Humphreys’ garden shed is removed, it is not possible to attend to the EUA fencing in that location.

The applicant is also seeking an order to prevent the use of Jadran Court Motel Office and Laundry to conduct any new business beyond that approved by a previous order. Ther applicant states that all business for the Jadran Court Motel and the holiday flats at 56 Frank Street is conducted at the office and laundry. The office was previously located away from lot 2, but a previous application to have this office moved from the laundry area was refused. The applicant notes that Mr Humphrey is managing access to a building at 58 Frank Street which is being redeveloped and is concernerd that this will lead to additional business being conducted at the office motel which would cause an intolerable disturbance to the occupants of lot 2.

Finally, the applicant believes that the only fair means of distributing the monies payable to the body corporate for the resumption of land for roadworks would be to distribute the funds in accordance with the “Table of Entitlements.

SUBMISSIONS

A submission was sought from the Body Corporate committee at the interim stage and subsequently, submissions were sought from all lot owners as well as the body corporate committee.

Submissions made by the body corporate committee included the following:

• The circular driveway is of more benefit to lot owners than the motel because motel guests only the use the space for a short period when they check in;
• The proposal had not previously been rejected but was deferred;
• The widening of the road removes two off site parking areas in close proximity to the scheme and parking has been allocated to owners and visitors on the proposed circular driveway ;
• Persons visiting the owners, tenants and motel guests have previously parked on the road adjoining the scheme however the roadway has now been widened and there is no longer any on street parking and this is why further allocation of parking areas has been made on the circular driveway;
• If cars were to park on the southern driveway as suggested by Mr. Stoneham, owners/ occupiers would not be able to access their garages as the driveway is currently too narrow;
• Some two days before the EGM the applicant circulated a letter to all owners putting forward his opinion as to why the circular driveway should not be approved;
• Construction of the circular driveway was approved at the EGM by a majority of votes;
• The applicant was not entitled to vote because he is “unfinancial”;
• It was intended that part of the compensation paid to the body corporate by the Main Roads department for the resumed land could be used to finance the driveway;
• It is claimed that the applicant has two “illegal units” on his lot;
• The fence surrounding the pool was in a state of disrepair and not compliant with pool fencing legislation;
• The body corporate previously resolved to appoint Mr Brian Humphrey as a handyman and to pay him for work undertaken. This was a unanimous decision of the body corporate and he believes that as his charges are reasonable he is saving money for the body corporate. Therefore he believes that he should not have to refund money to the body corporate;
• Mr Humphrey had to organise tradesmen to undertake work on lot 2 after letters to the applicant, requesting that he undertake certain work, were ignored;
• The garden shed was approved at an extraordinary general meeting and the shed that was eventually installed was 9.8 square metres. It is located on common property and does not occupy the car washing area;
• In relation to the request for an order that Mr. Humphrey reinstate the repaired section of the perimeter fence, it is claimed that fencing panels were removed by a contractor installing flashing in lot 2 when the Humphreys were on holidays. The contractors did not reinstall the panels and are still on the ground. It is suggested that the applicant should contact the contractorwho did the repairs in the first place. Further, they are not aware that the applicant has been troubled by squatters and that rubbish was dumped by a person unknown to the body corporate;
• The hot water system has been in place since the building was constructed in 1974
• Termites were discovered in the old storage shed which was subsequently treated with insecticide;
• As the hot water system and plumbing have been in place since 1974, they can see no need for it to be removed;
• The sign previously attached to the corner post said “private property” rather than “stop” and was removed by a person unknown;
• In 2005 an adjudicator ordered that the Humphries could run their motel business subject to compliance with by-laws and they are entitled to traverse the common property;
• They believe that the bottom ground floor units in lot 2 are “not compliant” and have been built without GCCC or body corporate approval although an adjudicator previously deemed the units to have been approved by the body corporate. It is claimed that the first of these two units was originally the office and rumpus room for lot 2 and the second unit was built over the original driveway without council or body corporate approval;
• The office does not service the flats in 58 Frank Street as that building is now derelict and the majority of laundry is taken offsite, so use of onsite laundry facilities is minimal;
• The body corporate does not agree with the proposal to install a gate wholly within unit 2 EUA because the gate would impede access to the office door and motel unit door, cars belonging to unit 2 would not be able to reverse out of the carport area and it would not be possible to open the gate without causing detriment to all owners.
• The request for the fence was not denied but the committee asked for further information regarding height, colour and noise. The area needs to be surveyed in order for the request to be reconsidered. It would be impossible to not step onto the exclusive use area as it is next to the door and the proposed gate would prevent people from using the door;
• Although an order was issued stating that the owners of lot 1 are permitted to continue their letting and motel business, they believe the applicant does not want the motel business to continue;
• As regards distribution of the proceeds from land resumption, the preference of the committee is that the matter go to an EGM to be voted upon and the proceeds placed in the administrative fund or returned to owners. It is submitted that the fairest way of distributing the proceeds would be to place the monies in the administrative fund as the Humphreys own lots 1, 5 & 6 and would obtain the most money i.e. monies would be distributed as follows:
  

Lots 1, 5 & 6 (Humphries) $10,250.54

Lot 2 (Stonham) $ 7,115.93

Lot 3 $ 1,567.30

Lot 4 $ 1,567.30

Lot 7 $ 1,783.49

Lot 8 $ 1,567.30

Lot 9 $ 1,567.30

Lot 10 $ 1,567.30

In response, the applicant made the following submissions:

• The body corporate has admitted that all staff and clients of the motel trespass onto the lot 2 exclusive use area when entering the office;
• The body corporate has not denied that the laundry truck and miscellaneous vehicles trespass onto the lot 2 exclusive use area;
• The body corporate wrongly claims that an audit was conducted some time in the recent past;
• Although the submission makes much of the condition of the lot 2 EUA “pool shed”, the reality is that the body corporate, and particularly Mr.Humphrey wilfully demolished the shed without the sanction of the owners or the GCCC.
  

INSPECTION

In order to gain an appreciation of the various matters in dispute I conducted a site inspection and met with the applicant and the chairman of the body corporate on 26 February 2009. At this meeting I was able to ascertain the location of the exclusive use area, demolished fence, pool shed, garden shed and cupboard housing the hot water system.

JURISDICTION

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

(c) a claimed or anticipated contractual matter about-

(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)).

DETERMINATION

The applicant has sought a number of orders in total including an Interim Order to prevent the creation of a circular driveway and three car parking spaces at a cost of $10,450; additional costs of $1,210 for clearance works to facilitate the driveway; and the expenditure of such funds from the sinking fund. On 15 July 2008 I declined to make such an interim order as the subject resolutions were carried by a majority of lot owners present and voting at the general meeting, and having regard to the appeal case of Dindas & Anor v Body Corporate for One Park Road Ors [2006] QDC 302 I was of the view that the power of an adjudicator to make an order that is just and equitable does not entitle an adjudicator to override a legitimate exercise of voting power.

I therefore turn to the final outcomes sought by the applicant which are summarised below:

1. An Order to hold the Body Corporate liable for the cost of replacement of the swimming pool fence which was in serviceable order and met the safety requirements of GCCC which has been demolished and for replacement of the new 1.2 metre pool fence section with a solid fence 1.8 M high and for reconstruction of the pool shed previously approved.

2. An Order to reimburse or cancel costs illegally allocated against unit 2 , such costs to be established by an audit of all financial records.

3. An Order to have the hot water cylinder located within the unit 2 EUA but serving the office and laundry of the motel/unit 1, removed from the EUA.

4. An Order to ban the use of Jadran Court Motel Office and Laundry to conduct any new business beyond that approved by a previous order.

5. An Order to have the proceeds of the sale of land to the Roads Authorithy dispersed to owners in accordance with the Table of entitlements.

Outcome 1

As the parties would be aware, the demolition of the fence dividing the EUA from the balance of common property was the subject of a previous adjudication by this Office (757-2005). While the applicant claims that the fence was in “serviceable condition”, this is at odds with evidence provided by the body corporate (including photographs) showing a fence primarily constructed from unpainted asbestos cement which, I think it is fair to say, was in a poor state of repair. The fence was unpainted, covered with mould, leaned to a significant degree, and had cracked in a number of places.

Having regard to the earlier determinations by this Office and the by-laws for the scheme, there is no doubt that lot 2 is entitled to exclusive use of the subject area. However, the by-law which grants the exclusive use to the respondent is silent on the question of responsibility for maintenance.

The Body Corporate and Community Management Act 1997 and the Body Corporate and Community Management (Standard Module) Regulation 2008, make it clear that the owner who obtains the benefit of an exclusive use by-law is responsible for the general maintenance of the part of the common property to which the exclusive use by-law applies, unless the by-law itself makes some specific provision about maintenance and operating costs.

Section 173 of the Standard Module (previously section 123 of the Body Corporate and Community Management (Standard Module) Regulation 1997) provides -

Conditions and obligations under exclusive use by-law

(1) If the owner of a lot included in the scheme to whom rights are in the first instance given under an exclusive use by-law agrees in writing, the by-law may impose conditions (which may include conditions requiring the owner to make a payment or periodic payments to the scheme’s body corporate or the owners of lots included in the scheme, or both).
(2) An exclusive use by-law is taken, in the absence of other specific provision in the by-law for maintenance and operating costs, to make the owner of the lot to whom exclusive use or other rights are given responsible for the maintenance of and operating costs for the part of the common property to which the exclusive use by-law applies.

In particular, the words "make the owner of the lot...responsible for the maintenance of and operating costs for the part of the common property to which the exclusive use by-law applies" (Standard Module, 173(2)) are broad enough to contemplate the owner taking responsibility for a fence, or other boundary structure, that was erected to create the exclusive use area. If the fence primarily benefits the exclusive use area of an individual owner rather than the body corporate as a whole then maintenance of that fence would be part of the "operating costs" of that exclusive use area. This means that the individual owner, not the body corporate, should be responsible for maintaining the fence. This applies irrespective of whether the fence in question is technically located just within the area, just outside the area, or on the boundary of the exclusive use area.

Therefore, as the exclusive use by-law does not specify who must maintain the fence around the exclusive use area, the owner of lot 2 is responsible for the maintenance and operating costs of the exclusive use area and all improvements in the exclusive use area. This is distinguishable from the situation where the fence is a more general boundary for the benefit of the body corporate as a whole. For example, if a fence is erected to separate scheme land from adjoining land that is not part of the scheme, such a fence is likely to be the responsibility of the body corporate as a whole and regulated under the Dividing Fences Act 1953 (Act, 311). .[1]

Section 121 of the Standard Module would have been applicable to the circumstances of this case (see now section 171 which is almost identical) and this section provided as follows:
Body corporate may carry out work required of owners and occupiers
(1) This section applies if the owner or occupier of a lot included in the community titles scheme does not carry out work that the owner or occupier has an obligation to carry out under—
(a) a provision of the Act or this regulation, including a provision requiring an owner or occupier to maintain a lot included in the scheme; or
(b) a notice given under another Act or a Commonwealth Act; or
(c) the community management statement, including the by-laws; or
(d) an adjudicator’s order; or
(e) the order of a court.
(2) The body corporate may carry out the work, and may recover the reasonable cost of carrying out work from the owner of the lot as a debt..

As stated in my previous decision dated 14 June 2006, I believe that the owner of lot 2 failed to adequately maintain the EUA fence which also served as the pool fence. In the absence of co-operation by the owner of lot 2, the body corporate was therefore entitled to undertake remedial work pursuant to section 121 of the Standard Module (now section 171) and replace a number of .
asbestos cement sheets with panels of wire pool fencing

I note from photographs submitted with this office that the “pool shed” referred to by the applicant was a crudely built lean-to structure. It consisted of an asbestos cement roof screwed to three timber beams supported by three lengths of tubular steel and three lengths of hardwood. While there is some dispute as to whether the body corporate requested the applicant to demolish this structure before Mr Humphrey decided to do so on behalf of the body corporate, I do note from the photographs that the timber posts and beams had suffered extensive termite damage and that the structure did not have walls, fascia or guttering. On balance I believe that In the absence of co-operation by the owner of lot 2, the body corporate was entitled to undertake remedial work pursuant to section 121 of the Standard Module (now section 171) by demolishing this structure which had fallen into an obvious state of disrepair.

Outcome 2

The next outcome sought by the applicant is an order to reimburse or cancel costs illegally allocated against unit 2, such costs to be established by an audit of all financial records. I note that the applicant has been a lot owner for almost 7 years and in my view it would not be just and equitable to order that the body corporate engage an auditor to conduct such an audit. However I also note that the applicant has set out a number of specific instances where the body corporate and/ or the Humphreys have claim certain costs against lot 2. These including the following:

• Costs of $639.50 associated with a conciliation between the body corporate and the applicant;
• The amount of $182.87 for “time spent by Chairman with cement contractor, backhoe driver, tow truck driver, police & Mr Stonham;
• Mowing of lot 2 exclusive use area e.g. $75 for grass cutting in July when there was minimal growth.
  

In the absence of an order by an adjudicator pursuant to section 270 of the Act, I do not believe that the body corporate is entitled to claim from the applicant the sum of $639.50 which alleged to be the cost of attending to a conciliation application lodged with this Office by the applicant.

Secondly, in the absence of an order of an adjudicator or judgment by a Court of competent jurisdiction, I do not believe that the body corporate is entitled to claim the amount of $182.87 from the applicant.

Thirdly, on a balance of probabilities, I am not satisfied that the exclusive use area lawn required mowing in July 2008 and indeed the body corporate has not provided any evidence to indicate that this area required mowing or that the body corporate authorised Mr Humphrey to mow this area. Accordingly I do not believe that the applicant is required to pay the sum of $75 to the body corporate.

Outcome 3

On 26 February I inspected the structure housing the hot water system. I noted that the hot water system is located under a staircase in the exclusive use area and I was informed that it has been located in this area for many years. The applicant claims that until this structure and the Humphreys’ garden shed is removed, it will not be possible for him to erect a timber fence separating the exclusive use area from other common property. However as the hot water system servicing lot 1 has been located in this part of the EUA for many years, I consider that it would be unreasonable and inequitable to require its removal.

It should be noted that section 115O of the Land Title Act 1994 makes provision for easements in favour of lots for utility services and utility infrastructure in the following terms:
(1) An easement exists in favour of a lot and against other lots and common property for supplying utility services to the lot and establishing and maintaining utility infrastructure reasonably necessary for supplying the utility services.
(2) However, the exercise of rights under the easement must not interfere unreasonably with the use or enjoyment of the lot or part of common property against which the easement lies.

The principle of acquiescence may also operate to deny the owner of lot 2 the right to object to something that has in fact been in place for a number of years, giving rise to an inference of assent.

In the course of my inspection I noted that the timber framework of the structure housing the hot water system has been damaged by termite activity and will require replacement in the near future. The owner of lot 1 may wish to modify the structure so that the door faces out toward the common property (that is not part of the exclusive use area).

This would enable the applicant to fence off the EUA (apart from the hot water system cupboard) and the owner of lot 1 would be able to access the hot water system cupboard without entering the fenced off area.

Outcome 4

The applicant is seeking an order to ban the use of Jadran Court Motel Office and Laundry to conduct any new business beyond that approved by a previous order. The applicant noted that Mr.Humphrey was controlling access to a building at 58 Frank and was concernerd that this would lead to additional business being conducted at the motel office. However, at our on-site meeting on 26 February, Mr Humphrey stated that he was only involved with 58 Frank street to the extent of ensuring that squatters in that building did not engage in anti-social behaviour which would impact on Jadran Court.

As stated previously, I am not aware of any by-law which prohibits the conduct of a letting business in the scheme and in any event, it could be considered unreasonable and inequitable to require the Humphreys to move their operations elsewhere after carrying on their business from the same premises for a number of years.

However this would not exempt the owners of lot 1 from complying with scheme by–laws regarding:

• Noise & nuisance;
• Vehicles;
• obstruction of common property; and
• behaviour of invitees.
  

Outcome 5

Finally, the applicant believes that the only fair means of distributing the monies paid to the body corporate for the resumption of land would be to distribute the funds in accordance with the “Table of Entitlements”.

The committee states that the decision whether the proceeds should be placed in the administrative fund or returned to owners, should be made at an EGM, although it believes the fairest way of distributing the proceeds would be to place the monies in the administrative fund as the Humphreys own lots 1, 5 & 6 and would obtain the most money i.e. monies would be distributed as follows:

Lots 1, 5 & 6 (Humphrey) $10,250.54

Lot 2 (Stonham) $ 7,115.93

Lot 3 $ 1,567.30

Lot 4 $ 1,567.30

Lot 7 $ 1,783.49

Lot 8 $ 1,567.30

Lot 9 $ 1,567.30

Lot 10 $ 1,567.30

Given that the lot owners contribute to the administrative fund in accordance with the above contribution lot entitlements, I do not personally believe that one method of distribution would be less fair than the other. However it should be noted that section 146 of the Body Corporate and Community Management (Standard Module ) Regulation 2008 provides as follows:

146 Administrative and sinking funds
(1) The body corporate must establish and keep an administrative fund and a sinking fund.
(2) The body corporate must pay into its administrative fund any amount received by the body corporate that is not required under subsection (3) to be paid into its sinking fund.
(3) The body corporate must pay into its sinking fund—
(a) the amount raised by way of contribution to cover anticipated spending of a capital or non-recurrent nature (including the periodic renewal or replacement of major items of a capital nature and other spending that should be reasonably met from capital); and
(b) amounts received under policies of insurance for destruction of items of a major capital nature; and (c) interest from investment of the sinking fund.

Having regard to the above provision, I do not believe that the body corporate has any option other than to pay the proceeds of the resumption into the administrative fund.

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[1] See for example adjudicator’s decision in The Gardens 810-2003