Parklands at Sherwood [2011] QBCCMCmr 119 (18 March 2011)

Last Updated: 17 June 2011

REFERENCE: 0181-2011

ORDER OF AN ADJUDICATOR

MADE UNDER PART 9 OF CHAPTER 6

BODY CORPORATE AND COMMUNITY MANAGEMENT ACT 1997

Number of Scheme:	39409
Name of Scheme:	Parklands at Sherwood
Address of Scheme:	Egmont Street SHERWOOD QLD 4075

TAKE NOTICE that pursuant to an application made under the abovementioned Act by the Body Corporate for Parklands at Sherwood

I hereby order that an extraordinary general meeting of the Body Corporate for Parklands at Sherwood, convened for the purpose of considering motions relating to the approval and funding for works arising from flood damage, shall not be invalid simply because the requirement for 21 days notice in section 72 of the Body Corporate and Community Management (Accommodation Module) Regulation 2008 is not complied with, provided that the meeting is not held until at least seven (7) days after notice of the meeting is given to all lot owners.

STATEMENT OF ADJUDICATOR’S REASONS FOR DECISION - REF 0181-2011

“Parklands at Sherwood” CTS 39409

Parklands at Sherwood community titles scheme 39409 (Parklands at Sherwood) is a layered scheme comprising four lots and common property. The community management statement (CMS) for Parklands at Sherwood indicates that the Body Corporate and Community Management (Accommodation Module) Regulation 2008 (Accommodation Module) applies to the scheme.

APPLICATION

Pursuant to the Body Corporate and Community Management Act 1997 (Act), this application was made by the Body Corporate for Parklands at Sherwood (applicant) on 22 February 2011, pursuant to a resolution passed outside a Committee meeting on 11 February 2011.

On receipt of the application the Commissioner’s case management sought clarification of the outcomes sought and supporting grounds, and these were subsequently amended.

The applicant now seeks a declaratory order in the following terms:

That the adjudicator rule that the notice period for a general meeting be reduced from 21 days to 7 days so that the flood rectification can be accepted post-haste as the quotations could be withdrawn due to the current demand on trades people resulting in an increase in costs or inability for the body corporate to complete the rectification works.

PROCEDURAL MATTERS

Section 243A of the Act provides that the Commissioner may refer an application immediately to a dispute resolution officer, notwithstanding that affected persons have not been given notice of the application and invited to make submissions as would normally be required under section 243(1). This referral can occur when the Commissioner reasonably considers that the application relates to emergency circumstances and it is not appropriate to deal with the application as an interim order under section 247. The example of emergency circumstances provided in section 243A(1)(a) is when the repair or replacement of a burst water pipe exceeds the Committee’s spending limit.

MATTERS IN DISPUTE

The application relates to expenditure on works necessary to rectify damage caused when the scheme was inundated with flood waters in January 2011.

The application says that at the time of the flooding the Committee acted in the manner it believed most appropriate, and in the interests of the health and safety of owners, to approve emergency works in relation to the flooding. Due to the limited availability of contractors able to undertake emergency and rectification works of this scale, the Committee accepted the offer of a licensed builder, Pradstruct Pty Ltd (Pradstruct), to undertake emergency works from 13 to 16 January 2011 at no cost, and then to continue with clean up and reinstatement works from 17 January 2011, on the basis that they would not claim any margin, profit or supervisors fee.

Emergency works were undertaken to enable residents to return to their apartments. On 23 February 2011 Pradstruct provided a quote for the emergency and subsequent works for the principal and two subsidiary schemes. This included an estimated total cost of $302,844.78 to reinstate recreational facilities in the principal scheme. The quote was accompanied by a spreadsheet, scopes and quotes for the works. The quote is considered to be effectively at cost.

Pradstruct have apparently obtained multiple quotes where possible and advised that they all quotes and costings are available to the Body Corporate. The Body Corporate also obtained a quote from another company who offered to price the works on the basis of cost plus 15% plus a full time supervisor. Another company declined to quote for the work. The applicant also says that Pradstruct is a related company to the scheme’s developer; is the best equipped to understand the impact of the water inundation; and was in a position to mobilise resources and equipment at the time of the flooding.

The application notes that the scheme has over $155,000 in reserves, but that a special levy would be required to fund the works because no provision was or could have been made in the budget for the flood rectification works.

The outcome sought indicates that if the quote cannot be accepted it could be withdrawn which could increase the cost and time for the Body Corporate to complete the rectification works, particularly given the current difficulty accessing tradespeople.

JURISDICTION

I am satisfied that this is a matter which falls within the legislative dispute resolution provisions.[1]

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 claimed or anticipated contravention of the Act or the CMS; or the exercise of rights or powers, or the performance of duties, under the Act or the CMS; or a claimed or anticipated contractual matter about the engagement of a person as a body corporate manager or service contractor; or the authorisation of a person as a letting agent.

An order may require a person to act, or prohibit a person from acting, in a way stated in the order.[2] An adjudicator's order may contain ancillary and consequential provisions the adjudicator considers necessary or appropriate.[3]

DETERMINATION

A body corporate has a duty to administer, manage and control common property and body corporate assets reasonably and for the benefit of lot owners[4]. It must maintain common property in good condition, including to the extent that common property is structural in nature, in a structurally sound condition[5]. The works described in this application are works would appear to be within the scope of the Body Corporate’s legislative responsibilities to undertake.

The body corporate manager has indicated that the works quoted for the principal scheme include costs that have already been incurred. However it does appear that there are more works to be progressed, and moreover there is a need to act promptly to retain the services of Pradstruct. On the basis of the information provided, I am satisfied that emergency circumstances exists such that there is a need to obtain owner approval for the works as soon as practical and to raise a special levy to fund works already undertaken and ongoing.

Section 72 of the Accommodation Module provides that a general meeting must be held at least 21 days after notice of the meeting is given to the lot owners. However, there is some capacity for an adjudicator to make a declaration authorising a shorter notice period. I consider that in the current circumstances, and given that owners will aware of the issue at least in general, a seven day clear notice period would give adequate notice of the required motions to owners.

I do not believe this shortening of the notice period will disenfranchise voters or materially disadvantage owners from properly considering the issues. However, the Committee may need to owners that the truncation of the normal notice period has been authorised by this order so that there is no confusion. The Committee should also note that the calculation of the seven days excludes the date the notice is given and the date of the meeting, and that a notice that is posted is deemed to given when it would be received in the ordinary course of post[6].

I have made the order sought. The EGM may consider motions to approve rectification works and to raise a special levy for those rectification works.

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[1] See sections 227, 228, 276 and Schedule 5 of the Act
[2] Section 276(2) of the Act
[3] Section 284(1) of the Act
[4] Section 152(1) of the Act
[5] Section 157(1) of the Accommodation Module.
[6] Sections 38(1), 39 and 39A of the Acts Interpretation Act 1954.