Pacific Place [2011] QBCCMCmr 1 (4 January 2011)

Last Updated: 27 May 2011

REFERENCE: 0589-2010

ORDER OF AN ADJUDICATOR

MADE UNDER PART 9 OF CHAPTER 6

BODY CORPORATE AND COMMUNITY MANAGEMENT ACT 1997

Number of Scheme:	10530
Name of Scheme:	Pacific Place
Address of Scheme:	117 Pacific Boulevard, BUDDINA QLD 4575

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

Vicki Ayliffe, the Owner of lot 2

I hereby order that: KBW Community Management, of 120 Brisbane Road, Mooloolaba, Qld, 4557, is appointed as administrator to call, hold and chair a general meeting (the meeting) of the body corporate for “Pacific Place” community titles scheme 10530 in accordance with this order and within 3 months of the date of this order for the purpose of the consideration of motions included on the agenda of the meeting and deciding committee executive member positions. The administrator shall hold the appointment for the period beginning on the date of this order until the close of the meeting ordered to be held. I further order that for the purposes of the Body Corporate and Community Management Act 1997 the meeting shall be deemed to be an annual general meeting of the body corporate and shall be called and held in accordance with the Act and the Body Corporate and Community Management (Standard Module) Regulation 1997 (Standard Module). I further order that for the purposes of calling and chairing the meeting, the administrator shall have all the powers of chairperson, secretary and treasurer of the body corporate and of the committee, with the exception of the following powers- To further delegate any of those powers to another person; and To incur any expenditure apart from that reasonably necessary for the calling and holding of the meeting. I further order that the meeting may consider any motion validly before it and the positions of the executive members of the committee shall be determined in accordance with section 13 of the Standard Module. I further order that for the purposes of determining the financial year, the end of the month preceding the month in which the meeting is held is deemed to be the end of the financial year. I further order that the administrator’s fees for this appointment payable by the body corporate will be $110 per hour, including GST. I further order that, in all other respects, the application is dismissed. The above order was appealed in the Queensland Civil and Administrative Tribunal – Appeal No. APL038-11

STATEMENT OF ADJUDICATOR’S REASONS FOR DECISION - REF 0589-2010

“Pacific Place” CTS 10530

APPLICATION

This is an application by the Owner of Lot 2, Vicki Ayliffe (Applicant), against the Owner of Lot 1, Neale Cross (Respondent), seeking the following order: “Unit 2 seeks the consideration and direction of the Adjudicator to have Unit 1 respect By-Law 5 of “Pacific Place CTS 10530” and have the stairwell returned to its original style.”

The Applicant provided grounds to the following effect:

• In November 2009 she phoned the local Council regarding a dangerous sunken roof line that she was unable to convince the Respondent to repair (subsequently repaired at Council’s request).
• As a result of Council’s inspection, Council wrote to the Respondent regarding 3 or 4 stair treads needing to be replaced.
• At a body corporate meeting held on November 24, 2009, the Respondent read a portion of Council’s letter. The Respondent did not give a copy to attach to the Minutes. The Respondent tried to coerce the Applicant into signing the Respondent’s written statement on the back of the Pacific Place by-laws. The Applicant refused to sign same. The Applicant did not give written or verbal permission for the Respondent to demolish the staircase.
• The next morning, 25 November 2009, the staircase was demolished. Many uprights survived and were propped against the fence. The stair treads were replaced in wood, not concrete as previously. To date, the staircase remains without a handrail.
• The Applicant wrote to the Respondent on 26 November 2009.
• A conciliation session was held on 18 May 2010 regarding the matter but failed to resolve the dispute.
• On 10 June 2010 the Applicant wrote to local Council regarding the situation. Council contacted her on 14 July 2010. The Applicant states that, although the Council would not provide her with a copy of the letter they had sent to the Respondent in November 2009, they did say that they had given the Respondent notice to repair the ceiling beam and replace 3 or 4 stair treads. The Applicant further states that Council stated that they had explained to the Respondent the safety issue without a hand rail in place, further to her letter of 10 June 2010.
• Council informs the Applicant that as the Respondent has removed the staircase, the Respondent will have to replace it to current regulation height for staircases to 875cm (prior to demolition it was 830cm). Lot 1’s staircase can be replaced to the original style. The surviving balustrades from the demolition on 24 November 2009 could be used. If more are required and are not available off shelf, new balustrades can be fabricated by a concrete company, attaching a thicker handrail to accommodate Council’s current regulation height of 875cm.
• The Applicant purchased Lot 2 in 2000. She has maintained the stairwell to Lot 2 in good condition. The Applicant likes the presentation of the building, its unique appearance amongst individual styles, its ease of cleaning care living with salt spray and the eco friendliness of the balustrades allowing good cross ventilation on hot sunny days. Lot 2 is the Applicant’s home.
  

JURISDICTION

“Pacifc Place” was registered as a building units plan (now known as building format plan) of subdivision on 15 January 1982 comprising 2 lots and common property. The scheme is regulated by the Body Corporate and Community Management Act 1997 (the Act) and the Body Corporate and Community Management (Standard Module) Regulation 2008 (the Standard Module).

This is a dispute between two owners and comes within the dispute resolution provisions of the Act (see sections 226, 227 and 228).

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 authorisation 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)).

SUBMISSIONS

In accordance with section 243 of the Act, a copy of the application was provided to the Respondent with an invitation to respond to the matters raised in the application.

The Respondent made submission to the following effect:

• The Respondent purchased Lot 1 on 21 July 2003. It was tenanted until September 2009 and managed primarily by Ken Guy/Next Property Group (name change). The Respondent and his family subsequently moved in to the property as of 28 September 2009. The Respondent has worked in Japan since April 2003 and is away for extended periods of time.
• Since purchasing the property, the Respondent has had continual problems regarding the body corporate which the Applicant has attempted to run as both Secretary and Body Corporate Manager.
• After seven years and numerous attempts to have matters rectified, almost all issues remain outstanding. To this day the bank accounts for Pacific Place remain in the name of the Applicant and the third and previous owner of Lot 1.
• With regard to the Minutes of body corporate meetings for both October 4, 2003 and November 27, 2009, the Respondent has never received any copies of minutes and most of what is recorded is incorrect.
• The roofline beam was inspected by a building engineer and subsequently repaired as per the recommendations and was organised by Ken Guy Real Estate in March 2007. The roofline beam was repaired again in 2009 at the Respondent’s own expense, not the body corporate’s, after requested by Council and the Applicant made a complaint.
• Stair treads and balustrades have also been repaired after being requested by the tenant in Lot 1 in 2003 and again in 2005. Council’s letter referred to by the Applicant stated “replace the unsafe concrete step treads” not 3 or 4 treads.
• The letter from Council was not read out at the body corporate meeting on 24 November 2009. At the meeting, the Respondent asked, not coerced, the Applicant to sign the copy of the by-laws given to him by her. The Respondent did this to try to get some continuity to the situation as the Applicant continually changes her mind on matters and thinks she can pick and choose which by-laws apply to her. She currently has a pet which violates by-law 11.1. The Respondent does not mind her having a pet but it shows her inconsistency.
• An agreement drawn up between the previous owners of Lot 1 and the Applicant highlights the continual inconsistencies. The Respondent has spoken to the previous owners of Lot 1 and they informed him that their reason for selling was the ongoing disputes and continual conflict with the Applicant, despite having had a deed drawn up.
• The letter from the Sunshine Coast Council stated “replace the unsafe concrete step treads” within 20 business days.
• After consultation with Council Compliance Officer Gary Sheffield, the Respondent was advised to replace the stairs with wooden treads as concrete treads would only rust again. The stairwell remains without a handrail until some agreement on the matter can be resolved.
• All stair treads were replaced due to the damage caused by salt corrosion.
• Sunshine Coast Council regulations state that 1 metre handrails are required if above 1 metre off the ground, which applies in this case. Therefore old balustrades are unusable due to their height and also corroded condition. New balustrades in the same style have not been available for over twenty years.
• As the Respondent and his family were in Japan for most of June and July 2010, on return the Respondent made the necessary enquiries and informed the Applicant of their acceptance of KBW Community Management.
• Lot 1 is also the Respondent’s home. He has spent considerable money repairing the stairwell over the last seven years while he has waited for a response from the Applicant, which did not happen. When faced with having to “replace” within 20 business days, after recommendation, he replaced the stairs with wooden treads.
• The Respondent has no idea of how much is in the sinking fund for Pacific Place as he is not even a signatory to the bank account.
• The Respondent hopes these issues can be finally resolved. He feels the only way this can be achieved is if the body corporate is handed over to a professional management company and all necessary documents lodged and brought up to date.
  

The Applicant exercised her right to inspect the submissions made and submitted a reply to the following effect:

• Prior to the purchase of Lot 1, it was clearly stated that the Applicant did not want to change balustrade design;
• Local Council’s request to the Respondent dated 4 November 2009 to “replace the unsafe concrete step treads” has resulted in the Respondent’s demolition of the staircase without approval and valid documentation respecting the by-laws and without professional engineering substantiation.
• The Respondent should re-install concrete stair treads, replace the surviving balustrades, and/or have extra balustrades fabricated by a concrete company. A thicker handrail would then accommodate local Council’s new staircase regulation height of 875cm. This would satisfy Council regulations and the ambience of the duplex’s architectural design.
  

DECISION

Replacement of Staircase

Both parties were notified by letter dated 18 November 2010, that in relation to the replacement staircase, I required further information from both parties. In that letter, it was noted that the Owner of Lot 1 asserted that it was not practicable to maintain the previously existing treads and balustrades and that in order to comply with current building regulations and council requirements, it was practicable to replace the staircase with the materials used. The Owner of Lot 2 asserted that “Unit 1’s staircase can be replaced to the original style. The surviving balustrades (uprights) from the demolition on 24 November 2009 could be used. If more are required and not available off shelf, new balustrades can be fabricated by a concrete company, attaching a thicker handrail to accommodate Council’s current regulation height of 875cm”.

The Owner of Lot 1 was requested to provide the following further information:

• Provide evidence that the new staircase leading to Lot 1 complies with current Council and Building Code of Australia requirements: and
• Advise the cost of replacing the staircase in its current form and who paid for this cost.
  

The Owner of Lot 2 was requested to substantiate her claim that Unit 1’s staircase can be replaced to the original style by providing a quotation from an appropriate professional to do this, noting that the new staircase must comply with current Council and Building Regulations.

The parties were requested to provide the further information required of them, by close of business on 17 December 2010.

A letter dated 30 November 2010 was received from the Owner of Lot 2 on 6 December 2010, advising that she is of the view that she should not be the party required to contact contractors to obtain a quotation to return the staircase to its original condition as she was not the party who has caused the change in the design in the staircase in the first instance. The Owner of Lot 2 also took objection to a comment made in our letter of 18 November 2010 that I was of the preliminary view that if I were to grant the order sought (that the stairwell be returned to its original style) both owners would share the costs of the new staircase equally, in accordance with the contribution schedule lot entitlements for the scheme. It had been noted that, according to registered building units plan number 4659, the staircases leading to both units are common property and as such, responsibility for their maintenance and/or replacement lies with the body corporate under section 159 of the Standard Module, not with any particular owner. The Owner of Lot 2 advised that she agrees to share the costs of the general maintenance and/or replacement of items in common property. However, this is not a case of general maintenance and/or replacement of common property, she stated, and she does not agree to share the costs of returning the staircase to its original condition because the staircase should not have been altered to its current condition in the first instance and the work was undertaken without the consent of the body corporate.

A facsimile dated 8 December 2010 was received from the Owner of Lot 1 on 15 December 2010 reiterating the difficulties he has experienced in his attempts over the last 7 years to have some involvement in the administration of the body corporate and the refusal of the Owner of Lot 2 to cooperate in this regard. In relation to the replacement of the staircase, the Owner of Lot 1 states that the balustrades from the demolition were not in a re-useable condition due to the fact that the salt corrosion went up the centre metal rod of the balustrade. He further stated that after extensive research to many companies, he was unable to find anyone that could provide this type of balustrade except in France, Spain and Canada. The companies he spoke to in Australia, he states, were all unable to help or tell him where these could be made as they have not been available for 20 years. The Owner of Lot 1 provided a copy of a certificate dated 23 November 2010 from North Shore Building Approvals certifying that the replacement staircase complied with the Building Act 1975. The Owner of Lot 1 also advised that the total cost of replacing the staircase, which has been paid in full by him, was $3,126. Copies of invoices substantiating this amount were also provided. The total cost comprised $1,425 for the new hand rail, $1,100 for the replacement treads, $490 for certification fees and $111 for Council fees.

In light of the information received from both parties, I am compelled to dismiss the application in so far as it relates to the replacement of the staircase leading to Lot 1. The Owner of Lot 2 has failed to substantiate her claim that Unit 1’s staircase can be replaced to the original style, by providing a quotation from an appropriate professional to do this after being requested to do so. The Owner of Lot 2 submits that it is simply not possible to replace it in that fashion. I accept submission from the Owner of Lot 2 that he attempted to communicate with the Owner of Lot 1 in relation to the staircase replacement and endeavoured to obtain her approval, but that the Owner of Lot 2 was uncooperative. On the basis of written communication to the Owner of Lot 1 from the Sunshine Coast Regional Council, I accept that it was necessary to replace the staircase. I note that the new staircase complies with current Council and building regulations. In the circumstances, I am of the view that the new staircase leading to Lot 1 is appropriate and should be permitted to remain as is.

I am of the view that the full cost of replacing the staircase leading to Lot 1 should have been met by the body corporate as part of its legislative responsibility in maintaining common property in good condition. At the meeting ordered to be held pursuant to this application, the Owner of Lot 1 might consider submitting a motion that the Owner of Lot 2 reimburse him half of his costs in replacing the staircase.

Appointment of Administrator

By definition, a community titles scheme is a subdivision of land into two or more lots and common property.[1] Every owner of a lot is automatically a member of a body corporate.[2] Amongst other things, a body corporate is required to:

• Establish and keep an administrative fund and a sinking fund;[3]
• Maintain an account kept solely in the name of the body corporate at a financial institution;[4]
• Keep proper accounting records and prepare for each financial year a statement of accounts showing the income and spending (or receipts and payments) of the body corporate for the financial year;[5]
• Maintain common property in good condition;[6]
• Insure, for full replacement value, the common property and body corporate assets;[7] and
• Maintain public risk insurance of the common property and relevant assets[8].
  

It is apparent that the body corporate is failing to meet many of its legislative obligations, particularly those pertaining to financial management and maintenance. In the circumstances, I am satisfied that the appointment of an administrator is necessary to authorise a person to call and hold a general meeting of the scheme, and allow it to thereafter proceed on a proper legal basis. The legislation includes provisions to the effect that: An order appointing an administrator may be the only order the adjudicator makes for an application or may be made to assist the enforcement of another order made for the application[9]; and if an adjudicator appoints an administrator to perform obligations of the body corporate, the committee for the body corporate or a member of the committee, anything done by the administrator under the authority given under the order is taken to have been done by the body corporate, committee, or member.[10]

Each party was requested, by letter dated 2 November 2010, to provide a maximum of three quotes for an administrator to call and convene a general meeting of the body corporate. Both parties have nominated KBW Community Management to act as administrator to convene a general meeting for the scheme. Michelle Williamson of KBW Community Management has quoted $110 per hour, including GST to do this, however if KBW were appointed as body corporate managers at that meeting, there would be no cost for the meeting.

I have therefore decided to appoint KBW Community Management. As stated in our correspondence to both parties dated 2 November 2010, the costs of the administrator are to be shared equally amongst the owners of the two lots as the contribution schedule lot entitlements for the scheme are equal.

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[1] See section 10 Act
[2] See section 31 Act
[3] See section 146(1) Standard Module
[4] See section 146(5) Standard Module
[5] See section 154(1) Standard Module
[6] See section 159 Standard Module
[7] See section 178 Standard Module
[8] See section 187 Standard Module
[9] Section 276(4) Act
[10] Section 278 Act