One Bright Point [2011] QBCCMCmr 129 (24 March 2011)

Number of Scheme:	36091
Name of Scheme:	One Bright Point
Address of Scheme:	146 Sooning Street NELLY BAY QLD 4819

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

I hereby order that the body corporate committee may, if necessary, make emergency expenditure from the sinking fund of up to the sum of $155,000.00 on remedial works, the sum of the excess on its insurance policy in respect of claims for cyclone damage, without authorisation from a general meeting.

This is an application dated 8th March 2011, but not received by this Office until 14th March 2011, and amended on 23rd March 2011 by One Bright Point CTS 36091 (the body corporate) for an order that the body corporate may pay an excess of $155,000 on its insurance premium in relation to cyclone damage so that an insurance claim for cyclone damage may be assessed.

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

(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)).

Section 243A Act applies if the commissioner reasonably considers an application should be immediately referred to a dispute resolution officer because it relates to emergency circumstances and it is not appropriate to deal with the application under section 247 Act which deals with interim orders. The commissioner may immediately refer the application to an adjudicator without giving written notice to affected persons pursuant to section 243(1)(c)Act.

The body corporate committee at its meeting on 23rd February 2011 resolved to make this application. It says that the scheme’s insurance specifically covers damage by a cyclone but that the scheme has a $155,000 excess in relation to cyclone damage. Buildings in the scheme were damaged by Cyclone Yasi. In order that an insurance claim may move forward, the scheme must be in a position to pay the excess as per the policy.

Until the claim is assessed, several owners cannot occupy their lots, and the building is at risk of further damage. The matter is urgent and the claim likely to be extensive. The insurers on 18th March 2011 told the body corporate manager that all works are to proceed as quickly as possible, however “the first $155,000 is the excess so this will have to be exhausted first.”

As at 8th March 2011, the scheme had $769,491.69 in its sinking fund but a deficit of $18,960.34 in its administrative fund.

The body corporate has a duty to administer, manage and control common property and body corporate assets reasonably and for the benefit of lot owners. (Section 152(1) Act). It must maintain common property in good condition, including to the extent that common property is structural in nature, in a structurally sound condition. (Section 157(1) Accommodation Module). The body corporate has demonstrated that since the cyclone, it has taken steps to assess the nature and cost of the damage, and to make a claim with its insurers.

On the basis of the submission, I am satisfied that an emergency situation has arisen in the scheme, and that the sum of the excess on the insurance policy, a copy of which was provided in the application, must be applied to repairs prior to the claim being paid out by the insurers CGU Insurance Limited.

Whilst there is no quantum on the total claim for remedial works put forward by the body corporate, it is clearly likely that the repairs will cost in excess of $155,000.00. I hereby authorise that the body corporate committee may, if necessary, make emergency expenditure from the sinking fund of up to the sum of $155,000.00 on remedial works, the sum of the excess on the insurance policy in respect of claims for cyclone damage, without authorisation from a general meeting.

Queensland Body Corporate and Community Management Commissioner - Adjudicators Orders

One Bright Point [2011] QBCCMCmr 129 (24 March 2011)