Paloma [2010] QBCCMCmr 29 (21 January 2010)

Number of Scheme:	9524
Name of Scheme:	Paloma
Address of Scheme:	93 - 97 Albatross Avenue MERMAID BEACH QLD 4218

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

I hereby order that pending a final order, the Body Corporate for Paloma shall not replace or repair, nor authorise the replacement or repair of, the windows in Unit 3.

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

Paloma community titles scheme 9524 (Paloma) consists of 12 lots and common property. The Community Management Statement (CMS) for Paloma indicates that the Body Corporate and Community Management (Standard Module) Regulation 2008 (Standard Module) applies to the scheme. The Department of Environment and Resource Management records show the scheme is registered as Building Units Plan 5681.

This is an application for interim orders lodged by Mr P W Jones, Co-owner of Lot 4 (applicant) on 18 December 2009 under the Body Corporate and Community Management Act 1997 (Act).

The applicant seeks an interim order against the Body Corporate for Paloma (respondent) in the following terms:

An interim order preventing the body corporate from implementing the decision made 4/12/2009 to contract O’Brien Window Maintenance from undertaking the replacement of the eastern window in Unit 3 pending a final determination of this matter.

An order requiring the Committee of the Body Corporate to engage experts to determine which windows at Paloma need replacing and to replace those windows in a programmed way and repair those windows that need repairing.

In accordance with section 247 of the Act, the Commissioner for Body Corporate and Community Management has referred the application to me to decide whether the nature or urgency of the circumstances of the application warrant an interim order. The Commissioner has referred the application notwithstanding that affected persons have not been given notice of the application or afforded an opportunity to make submissions about the application[1]. In the circumstances, I have provided the Body Corporate Committee (committee) with a limited opportunity to make a written submission in response to the interim application. Submissions were received from Ms Nanette Blair, Mrs Janice O’Conner and Mr Gregory O’Connor in due course.

On 15 January 2010 our Office received an email from committee member, Nannette Blair, stating that the windows for Unit 3 were being installed by O’Brien Window Maintenance (OWM) on 21 January 2010. On 19 January 2010 I requested that a member of our Office contact the Body Corporate Manager, Tania Campbell, and enquire as to whether the body corporate would provide an undertaking not to perform any work on the windows pending the interim order.[2] On 19 January 2010 Ms Campbell sent an email to our office stating the following:

“I have spoken to O’Brien window Mtce and they advised that materials have not been received for the window of unit 3. I requested that they not proceed with any work until a decision has been made on this matter and they agreed to contact me prior to commencing any work at Paloma.”

This application relates to the applicant’s request to postpone the replacement of the windows in Unit 3 pending the final order. The circumstances of the dispute are as follows:

In September and October 2009, the committee authorised the replacement of the windows in two committee members’ units, each at a cost of $2,390.00, to be paid from the sinking fund.

On 4 December 2009, the committee passed a motion to replace the windows of Unit 3 (owned by committee member Gregory O’Connor). The relevant motion is set out below:

Quotes were tabled from O’Brien Window for $1,323.00 and $2,390.00 to replace windows on the northern and eastern side of these windows.”

The minutes indicate that replacement of the windows in Unit 3 was passed with four votes in favour of the motion and two votes against the motion, but the replacement of the windows in Unit 1 was defeated with three votes in favour of the motion and three votes against the motion.

The applicant states that the committee are ‘using the system’ to spend body corporate monies on their own units to the exclusion of any proper consideration of the needs of other units. Further, the applicant states that the committee are spending body corporate money without any objective and independent consideration of the works required.

The applicant wants the replacement of the windows in unit 3 postponed pending a final order so that an expert can be engaged to determine which windows need replacing and/or repairing, thereby allowing for any such works to be conducted in a programmed way.

In support of his arguments, the applicant refers to a previous Adjudicator’s order (reference number) 0256-2009[3] which deals, in part, with issues concerning the maintenance and improvement of windows within this scheme. The applicant notes the following section of the Adjudicator’s order:

“I would suggest that the appropriate course of action is for the Committee to contact the window contractors and ask them to identify which windows are in genuine need of repair or preventative maintenance, and request separate quotes for those windows which require replacement and those which it may be desirable to replace at the same time. It may be that each contractor could provide differing quotes based on whether all work is done together or not.

These quotes should then be submitted separately to a general meeting, with the former requiring an ordinary resolution and the latter requiring an ordinary or special resolution depending on the quantum of the work. The explanatory notes for the motions can set out any benefits of doing both at the same time, such as cost savings and uniformity. It is then for owners at a general meeting (rather than the Committee or the applicant) to make the decision whether circumstances warrant the replacement of windows that might not otherwise be necessary to replace. “

Submissions were made from Ms Nanette Blair, Mrs Janice O’Conner and Mr Gregory O’Connor opposing the application. These submissions made the following comments:

On 20 January 2010, I requested that a member of our Office contact Ms Nanette Blair and ask the following questions:[4]

The file note of the conversation indicates that Ms Nanette Blair stated the following:

I am satisfied that this is a matter which falls within the legislative dispute resolution provisions.[5] 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:

(b) the exercise of rights or powers, or the performance of duties, under the Act or the CMS; or

(i) the engagement of a person as a body corporate manager or service contractor; or

An order may require a person to act, or prohibit a person from acting, in a way stated in the order.[6] An adjudicator's order may contain ancillary and consequential provisions the adjudicator considers necessary or appropriate.[7]

Section 279(1) of the Act allows an adjudicator to make an interim order if satisfied, on reasonable grounds, that an interim order is necessary because of the nature or urgency of the circumstances of the application.

At this time, I am concerned with the application for an interim order and the threshold issue of whether interim orders are warranted. An interim order will not be granted unless is it necessary due to the nature or urgency of the circumstances to which the application relates.[8] Any order granted must be just and equitable in the circumstances.[9] The examples in section 279 of the Act indicate the usual circumstances where an interim order might be made and are in the nature of injunctive relief. While it is not possible to define the range of matters that might be the subject of an interim order, an applicant needs to establish that the circumstances warrant an interim order. An interim order will not be made if the only urgency relates to an applicant’s desire to resolve or expedite the matters in dispute, or where the nature of the circumstances are such that the matter is not capable of being dealt with in the context of an interim order.

It is not appropriate to consider the substantive issues in the application in detail at this time. But to determine whether it is just and equitable to grant interim relief, it is relevant to briefly consider the issues raised in the application. As an interim order can be considered on an ex parte basis, an adjudicator must be satisfied that the application raises serious legal questions and that the balance of convenience between the parties justifies injunctive relief. That is, an adjudicator must balance the inconvenience of granting relief now if final orders are ultimately refused against the inconvenience of refusing relief now if final orders are ultimately granted. Of particular relevance is evidence that an interim order is necessary to prevent serious or irreparable harm.

The applicant raises several objections to the replacement of the windows in Unit 3. In particular, the applicant seems to dispute the reasonableness of the committee’s decision to replace the windows of Unit 3, stating that the committee are ‘using the system’ to spend body corporate monies on their own units to the exclusion of any proper consideration of the needs of other units. Further, the applicant disputes the spending undertaken by the committee, stating that the committee are spending body corporate money without any objective and independent consideration of the works required.

The submissions from the committee members, on the other hand, state that the decision to replace the windows in Unit 3 was reasonable as the motion was correctly presented at the committee meeting and the quotation from OWM indicated that the windows needed replacing. Further, the committee members’ state that the quotation could be approved by the committee as it was within the committee spending limit.

Section 151(2) of the Standard Module states that if a series of proposals forms a single project, the cost of carrying out any 1 of the proposals is taken to be more than the relevant limit for committee spending if the cost of the project, as a whole, is more than the relevant limit (underlining mine). The submissions received indicate that there may be the need for “several more new window frame replacements, including Units 4...and Unit 7...”. Further, it appears from the information provided that Unit 1 may also need further window replacements or repairs on the northern side of the Unit.

It is unclear from the information provided whether the window work proposed for Unit 3 is an ‘individual project’ or but one aspect within a series of works which form ‘one window maintenance project’. Further, investigation is needed to determine this issue.

If the window work proposed for Unit 3 is an individual project, it appears that the quotation for the replacement of the windows may be within the committee spending limit. However, if the window work proposed for Unit 3 is but one aspect of a larger window maintenance project, I question whether the costs of the project, ‘as a whole’, would fall within the committee spending limit[10] and consequently be a decision that the committee could make.[11] Section 151(1) of the Standard Module states that the committee may only give effect to a proposal involving spending above the relevant limit for committee spending, if the spending is specifically authorised by ordinary resolution of the body corporate or all owners within the scheme have given written consent for the spending.

Therefore, based on the information before me, I am satisfied that there is a serious question to be determined regarding the replacement of the windows in Unit 3.

In considering whether to grant the interim order sought, it is relevant to balance the inconvenience of granting relief now if final orders are ultimately refused against the inconvenience of refusing relief now if final orders are ultimately granted. Despite the fact that OWM have been contracted by the committee and have ordered the relevant parts, I am satisfied that any inconvenience caused to the body corporate by granting relief now and postponing the implementation of the motion, is less than the inconvenience of refusing relief now if final orders are ultimately granted.

On balance I am satisfied that the applicant has presented sufficient evidence of genuine concerns relating to the proposed replacement of the windows in Unit 3. Accordingly, I have made an order that the body corporate shall not replace or repair, nor authorise the replacement or repair of, the windows in Unit 3 pending a final order.

EFFECT OF AN INTERIM ORDER

The matter will now proceed in accordance with the normal processes undertaken by this Office. In the first instance I intend to refer the application to the Commissioner with a recommendation that conciliation be conducted in respect of the dispute. If conciliation is unable to resolve the dispute, the matter will proceed to the investigation of the final order, including calling further submissions.

All parties should note the provisions of section 279(2) of the Act, which provides that:

(2) An interim order—

(ii) the commissioner gives the person who made the application a written notice under section 241 rejecting the application; or

(iii) a final order is made by an adjudicator to whom the application is referred.

I have provided that this interim order has effect for a period of not longer than twelve months. It is the responsibility of the applicant to apply to extend this order if no final determination has been made within that period. This Office will not automatically renew an interim order and the order will automatically lapse upon a final order being made or this application being withdrawn.

[1] Section 247(3) of the Act.
[2] See the investigation powers of an adjudicator pursuant to section 271 of the Act.
[3] Paloma [2009] QBCCMCmr 236 (23 June 2009).
[4] See the investigation powers of an adjudicator pursuant to section 271 of the Act.
[5] See sections 227, 228, 276 and Schedule 5 of the Act.
[6] Section 276(2) of the Act.
[7] Section 284(1) of the Act.
[8] Section 279 of the Act.
[9] Section 276 of the Act.
[10] The Dictionary of the Standard Module defines the “relevant spending limit for committee spending” as the amount last set as the relevant limit by an ordinary resolution of the body corporate, or if there is no amount set, an amount worked out by multiplying $200 by the number of lots included in the scheme.
[11] Section 42 of the Standard Module states that a decision which requires an ordinary resolution of the body corporate is a restricted issue for the committee.

Queensland Body Corporate and Community Management Commissioner - Adjudicators Orders

Paloma [2010] QBCCMCmr 29 (21 January 2010)