Adelphi Springs [2009] QBCCMCmr 86 (4 March 2009)

Number of Scheme:	28835
Name of Scheme:	Adelphi Springs
Address of Scheme:	100 Cotlew Street East SOUTHPORT QLD 4215

TAKE NOTICE that pursuant to an application made under the abovementioned Act by Aileen Franklin, a co-owner of Lot 6

I hereby order that the application for an order by Aileen Franklin, a co-owner of Lot 6 against the body corporate for Adelphi Springs community titles scheme 28835 seeking an outcome to invalidate the resolution passed on Motion 8 of ‘General Business’ at the committee meeting dated 1 December 2008, is dismissed.

The scheme
“Adelphi Springs” community titles scheme 28835 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 made on 22 December 2008 by Aileen Franklin, a co-owner of Lot 6 (Applicant) against the Body Corporate seeks an outcome to invalidate the resolution passed on Motion 8 of ‘General Business’ at the committee meeting dated 1 December 2008 (December meeting).

Motion 8 ‘Additional Shade for Pools’ was passed by 7 votes to 0: “to proceed with the quote from Anthony’s Shade Sails at $4,640.00 to install a shade sail to the shallow end of the bottom pool. Because of the uncertainty of the location of any new water tanks and the exact position of the shade sail, the existing umbrella will be dismantled and then repositioned once the shade sail is installed”.

The Applicant claims the committee made the decision without consultation with owners. She submits that while the committee consider they have a duty of care to residents to provide sunshade, the committee have not provided any evidence or documentation of the duty of care or the legal obligation despite requests. The Applicant states the committee is only concerned about the southern pool which negates the argument about duty of care of the main pool which is used by approximately 95% of residents. The Applicant considers the matter should be voted on by owners at the March 2009 annual general meeting, and says approximately 60% of owners have been surveyed and all are against the shade sail for aesthetic and unnecessary expenditure reasons. The Applicant provided an indication of opposition to the resolution dated 8 December 2008 signed by herself and M Bisson. The Applicant also provided an unsigned letter dated 9 December 2008 from Lloyd Foster questioning the resolution. The Applicant submits that the southern pool was constructed over 10 years ago and no complaint has ever been submitted.

Interim order
The Applicant sought an interim order to put a hold on the resolution on Motion 8 pending a final outcome. On 19 January, 2009 I dismissed the application for an interim order.

Submissions to the Commissioner
On 21 January 2009, the Commissioner provided a copy of the application to Sargeant Strata (Body Corporate Manager) for distribution to the owner of each lot (excluding the Applicant) and the committee, with an invitation to respond to the matters raised in the application (s 243, Act). Submissions were made by the committee and a number of lot owners.

The committee submits that it has resolved not to take any action regarding the installation of the shade sail pending the outcome of this dispute. It relies on the submissions it made in relation to the interim order application. I summarised the committee submissions in the reasons for the interim order [at page 2]:

The committee submits that the only survey it is aware of is the abovementioned letter dated 8 December 2008. It says the minutes of the December meeting were circulated to all owners and to date the committee is aware of the opposition of 5 owners. The committee states the proposed shade would cover about 30% of the pool and the decision was made as the pool is totally unprotected from the sun and the shade would provide an amenity for residents and their children. The committee says it would also like to install a similar shade sail over the main pool but due to existing peripheral shade sails and adjacent umbrellas, the cost is not justified at this time. The committee provided a photograph saying it shows the absence of shade at the southern pool. The committee says there is only one umbrella at the pool. The committee submit the proposed shade sail is within its jurisdiction, was determined in accordance with the legislation, and it would not be able to carry out its functions if it could not decide matters due to beliefs of a minority of owners.

The chairperson submits the property is ten years old, requires upgrades and consideration of enhancements to modernise its facilities. She states that one enhancement is a shade cover over one of the two swimming pools as currently there is no shade over the water at any time of the day. Ms Wilkes adds that a shade sail is not simply an enhancement, but a necessity in the Queensland climate. She submits that the committee has only heard from five people about the resolution.

The owners of 19 lots (including one late submission) supported the application variously stating:

Adjudication
A dispute resolution recommendation has been made under section 248 of the Act referring the dispute to departmental adjudication.

Jurisdiction
An adjudicator may make an order that is just and equitable in the circumstances to resolve a dispute about a claimed or anticipated contravention of the Act; or the exercise of rights or powers, or the performance of duties, under the Act (s 276(1), Act).

The application was made within 3 months of the December meeting satisfying the time limit for an application of this nature (s 242, Act).

Investigation
On 27 February 2009, I requested a member of the commissioner’s office contact the Body Corporate Manager for details about the installation of the shade sail and about the timing of the next annual general meeting. The Manager stated the shade sail has not yet been installed and that the notice for the annual general meeting to be held in late March had not been given to owners.

Decision
Interim order
In the statement of reasons for making the interim order, I stated [at pages 2 to 3]:

...The resolution on Motion 8 related to installing a shade sail at the shallow end of a pool. In the absence of claims to the contrary, I am satisfied the pool and its surrounds are part of the common property for the scheme. A body corporate must administer the common property for the benefit of lot owners (s 94(1)(a), Act). A body corporate must act reasonably in anything it does under section 94(1) including making a decision (s 94(2), Act). A body corporate’s duties about common property include administering, managing and controlling the common property reasonably and for the benefit of lot owners (s 152(1)(a), Act).

A body corporate consists of all lot owners (s 31, Act). It chooses a committee each year. The Act (and in this case, the Accommodation Module) confers powers on the committee and also limits the things which the committee can do. A committee decision is a decision of the body corporate provided for example, the decision is not on a restricted issue for the committee or the decision is not on a proposal involving spending above the relevant limit for committee spending (s 100, Act; s 42 and s 149, Accommodation Module). The committee must act reasonably in making a decision (s 100(5), Act). In the absence of any information to the contrary, the relevant limit for committee spending for this scheme is $24,600.00 ($200 multiplied by the 123 lots included in the scheme – schedule, Accommodation Module).

The Applicant has not raised any questions about the way the committee decided Motion 8. It is not being claimed that the December meeting was incorrectly called or the way the Motion was decided did not comply with the legislation.

The Applicant is concerned about the lack of committee consultation with owners. However, the Applicant has not referred to a particular legislative provision which could be relied on to suggest consultation should have occurred. It is not being claimed that the committee did not give notice of the meeting to owners as required by the Accommodation Module, or that owners were excluded from attending the meeting...

The committee has submitted that owners have been given a copy of the minutes of the December meeting. While owners are entitled to be advised of a committee resolution, it is relevant that the Accommodation Module does not make provision for owners to stop a committee resolution from being implemented by notification of opposition to the resolution...

I am satisfied from the information provided that the committee has the power to make a decision of the nature it made on Motion 8. There is nothing to suggest the cost of the proposed work exceeds the relevant limit for committee spending. Neither has it been argued that the decision is a restricted issue for the committee. The Applicant has not shown that the proposal is contrary to a previous Body Corporate decision...

December meeting
In the abovementioned reasons, I stated the applicable law with respect to a committee’s power to make a decision on an issue of the nature being disputed in this application. There is nothing in submissions to the Commissioner to suggest that the decision on Motion 8 was made on an issue restricted for the committee or that it committed expenditure above the relevant limit for spending. Further, no question has been raised about the way the December meeting was called or the way the Motion was decided.

It has been submitted that the agenda for the meeting did not make mention of the Motion. The notice of a committee meeting must be accompanied by an agenda (s 45(4), Accommodation Module). The agenda states the substance of issues to be considered at the meeting (s 47(1), Accommodation Module). However, the committee may also consider other issues raised at the meeting (s 47(2), Accommodation Module). The fact that the notice of the December meeting did not include a reference to the proposal to install a shade sail does not affect the validity of the decision made on Motion 8.

Owners supporting the application have submitted there should have been some consultation by the committee. While the committee may have taken this action before proceeding to a vote, there is nothing to support a view that consultation was required by the legislation.

Improvement to common property
The committee resolved to have work carried out on common property to install a shade sail structure. In my view, the installation of a permanent shade sail is an improvement.

An improvement includes a structural or non-structural change (‘improvement’ defined schedule 6, Act). In the Body Corporate for The Phoenician community titles scheme 27745 v Herme Pty Limited BD2346/05, Judge Durward SC DCJ stated: “The meaning of the term "improvements" is to be ascertained by reference to the context in which it is used in "Part 8 - Property Management" of the module [p 43]. Part 8 proscribes matters about property management for a community title scheme ... The context is clearly one of permanency and attachment to the land...The term "improvement" is used in the module in the context of the common property: it denotes some physical thing that enhances the value of the property..." [p 44]. (Note: This decision was based on the previous Body Corporate and Community Management (Accommodation Module) Regulation 1997. Chapter 8 of the Accommodation Module contains equivalent provisions to the referenced Part 8.).

A body corporate may make an improvement to common property if the improvement is authorised in a way stated in section 161 of the Accommodation Module. Section 161(1) provides a tiered approach to the type of authorisation required before an improvement may be made. Section 161(1)(a) provides that the body corporate may make improvements to the common property if the cost of the improvements is not more than the ‘basic improvements limit’ for the scheme: in this case the limit is $36,900 (123 lots multiplied by $300 – s 161(5)). A committee decision is a decision of the body corporate (s 100(1), Act). As there is no evidence that the committee has been restricted from making a decision to make an improvement to common property, section 161(1)(a) allows the committee to make a decision on this issue provided the cost does not exceed its relevant limit for committee spending. It is clear in this case that the cost for the installation of the shade sail is within the relevant limit for committee spending and the ‘basic improvements limit’.

In these circumstances, I am satisfied the committee had the power to make the decision it did on Motion 8. As I indicated in the reasons for the interim order, there is no opportunity under the Accommodation Module for owners to internally oppose a committee resolution.

Given the arguments being made, the Applicant may be relying on the legislative provisions relating to acting reasonably. However, I do not consider a serious issue has been raised on this point. The committee has stated its reasons for making the installation. The Applicant disagrees. However, I do not consider that the Applicant has demonstrated, or that there is a basis to suggest, the committee has acted unreasonably in making the decision. I am not satisfied that in the circumstances, the fact that a shade sail is not being installed at another outdoor pool is significant. Nor am I satisfied that the existence of an indoor pool is relevant. The Applicant has not demonstrated that it is likely that the installation will for example, have a detrimental affect on common property, or her use and enjoyment of the common property or her lot. Neither has the Applicant shown that it could be found the installation of a shade sail will not be of benefit to owners. The fact that the Applicant may oppose the resolution or have a different opinion to the committee does not demonstrate there is a serious issue to warrant making an interim order in the terms sought.

Section 100(5) of the Act provides that the committee must act reasonably in making a decision. In determining whether the committee acted reasonably in deciding Motion 8 it is appropriate to consider if the decision is objectively reasonable: Greiner v Independent Commission Against Corruption (1992) 28 NSWLR 125. The objective test requires a balancing of factors in all the circumstances according to the ordinary meaning of the term ‘reasonable’: Secretary, Department of Foreign Affairs and Trade v Styles [1989] FCA 342; (1989) 88 ALR 621 (see also McKinnon v Treasury [2006] HCA 45 per Hayne J at p61).

The committee has stated its reason for making the decision. The stated primary purpose of the shade sail is to provide protection from the sun. It is apparent from the photos of the pool provided by the committee that there is minimal direct protection. In the Queensland climate, the dangers of exposure to the sun are well documented. The Cancer Council of Queensland (CCQ) is an organisation whose “goal is cancer control through all actions that aim to reduce the burden of cancer on individuals and the community” (http://www.cancerqld.org.au/aboutUs). The CCQ website refers to the Queensland Skin Cancer Prevention Strategic Plan 2008-2013 stating: “The Plan aims to reduce the incidence of skin cancer in Queensland by creating sustainable policy and environmental changes to ensure Queenslanders can be protected from the sun’s ultraviolet radiation.” The 16 page Plan states: “Skin cancer is a major public health issue in Australia. Queensland records the highest rates of melanocytic and non-melancytic skin cancer (NMSC) in the world” [page 4]. The Council website states: “shade is an effective way to protect your skin from ultraviolet radiation” and that “Shade cloth acts as a physical barrier to ultraviolet radiation”.

In this context, consideration of a prevention strategy such as the installation of a shade sail that provides cover for an outdoor swimming pool would not be unreasonable. In my view, it would be quite reasonable for a body corporate (including through its committee) to give consideration to and to implement such a strategy. While some owners disagree with the position taken by the committee, there is objective evidence that a shade sail is an effective way to prevent skin cancer. The shade sail is proposed to be installed on a part of common property which would be expected to be used during the hottest part of the day and given the location of the scheme, particularly during the hotter months of the year.

Some owners have made submissions about the possible impact on the use and enjoyment of their lots or the common property caused by the installation of a shade sail. However, on balance I consider there is a justifiable basis to find the committee has acted reasonably in making the decision on Motion 8.

As indicated in the reasons for the interim order, it would seem the Applicant has proposed a motion to the forthcoming annual general meeting about this issue. It will be a matter for owners to determine whether they, in general meeting, make a decision contrary to that made by the committee. This order does not affect the Body Corporate’s ability to vote on an appropriate motion about the installation of a shade sail. The order is limited to the question of whether the committee decision on Motion 8 at the December meeting was contrary to the legislation.

Queensland Body Corporate and Community Management Commissioner - Adjudicators Orders

Adelphi Springs [2009] QBCCMCmr 86 (4 March 2009)