Sandown [2011] QBCCMCmr 179 (27 April 2011)

Last Updated: 17 June 2011

REFERENCE: 0358-2011

INTERIM ORDER OF AN ADJUDICATOR

MADE UNDER PART 9 OF CHAPTER 6

BODY CORPORATE AND COMMUNITY MANAGEMENT ACT 1997

Number of Scheme:	10524
Name of Scheme:	Sandown
Address of Scheme:	4 Montana Road MERMAID BEACH QLD 4218

TAKE NOTICE that pursuant to an application made under the abovementioned Act by Mr. Trevor Matthews, the owner of Lot 8 and Ms. Peg Forbes, of Lot 4

I hereby order that the application for the following interim orders: That the committee motions listed below be declared invalid and that any related work in progress on or off site be ordered stopped pending the final outcome. 1. motion 7/3/2011 to supply and install stairs for $3234; 2. motion 11/4/2011 to enclose old entry area $3215.30; 3. motions which are claimed to have been made at committee meeting on 2/4/2011 (yet unpublished) but which relate to activities to the front entrance or its services; 4. any future motions or work proposed to be authorised to the front entrance or its services to be stopped pending a final order; That motion 9 on the AGM voting paper “enclose old entry stairs” be invalidated, (or alternatively not acted upon). That Carol Matthews (committee member and previous secretary) be authorised under regulation 65(2) to call and control an EGM of all owners, to seek assistance in preparation of reports and to put motions and explanatory notes together with costs to owners regarding dispute items and present the results to an adjudicator for final order. That AGM motion 11 “paint basement ceiling” be invalidated (or alternatively) not acted upon pending a final order. That owners’ motions 13 to 22 on the AGM voting paper be voted upon without interference or adverse rulings by the Chairman or BCM; That an order be made to provide Trevor Matthews with a key to the pump room and switch room so that he may initially examine the fire pump failure; That the work on the fire pump/ motor be stopped until a professional electrical engineer is chosen to lead the review, define the scope of work and supervise the tests and commissioning and to provide information to Carol Matthews for owners. is dismissed.

STATEMENT OF ADJUDICATOR’S REASONS FOR DECISION - REF 0358-2011

“Sandown” CTS 10524

The scheme

“Sandown” community titles scheme 10524 is subject to the Body Corporate and Community Management Act 1997 (Act) and the Body Corporate and Community Management (Standard Module) Regulation 2008 (Standard Module).

Application

This application is by Mr Trevor Matthews, the owner of Lot 8 and Ms Peg Forbes, of Lot 4 (Applicants) against the Body Corporate seeking the following interim orders:

• That the committee motions listed below be declared invalid and that any related work in progress on or off site be ordered stopped pending the final outcome.

1. motion 7/3/2011 to supply and install stairs for $3234;

2. motion 11/4/2011 to enclose old entry area $3215.30;

3. motions which are claimed to have been made at committee meeting on 2/4/2011 (yet unpublished) but which relate to activities to the front entrance or its services;

4. any future motions or work proposed to be authorised to the front entrance or its services to be stopped pending a final order;

• That motion 9 on the AGM voting paper “enclose old entry stairs” be invalidated, (or alternatively not acted upon).
• That Carol Matthews (committee member and previous secretary) be authorised under regulation 65(2) to call and control an EGM of all owners, to seek assistance in preparation of reports and to put motions and explanatory notes together with costs to owners regarding dispute items and present the results to an adjudicator for final order.
• That AGM motion 11 “paint basement ceiling” be invalidated (or alternatively) not acted upon pending a final order.
• That owners’ motions 13 to 22 on the AGM voting paper be voted upon without interference or adverse rulings by the Chairman or BCM;
• That an order be made to provide Trevor Matthews with a key to the pump room and switch room so that he may initially examine the fire pump failure;
• That the work on the fire pump/ motor be stopped until a professional electrical engineer is chosen to lead the review, define the scope of work and supervise the tests and commissioning and to provide information to Carol Matthews for owners.
  

The applicants also seek the following final outcomes:

• That the front entrance, stairs and its services remain substantially as they were originally, with necessary retiling save that a review and investigation of an alleged condemned stairway might require removal and replacement of the existing old stairs at minimal cost and the review to be presented to owners;
• That authorised work by committee be identified and removed by the BC and the costs of unauthorised work and restoration is recovered from individuals who approve such work and expenditure;
• That motion 9 of the AGM voting paper is set aside.
• That motion 11 of the AGM voting paper be set aside;
• That the fire pump be promptly repaired and commissioned on the conditions set out above;
• That a decision of the committee relating to BC “improvements” including those to common property are made a restricted issue for committee reserved by ordinary resolution, for the decision by ordinary resolution of the body corporate.This proposal shall be made to owners generally as set out above.

This item is necessary due to frequent abuses by committee in the matter of improvements incompetently executed, failed projects and uncontrolled expenditure.

The applicant refers to a committee motion that was carried at the AGM held on 18 April 2009, whereby it was resolved re-tile all common areas of foyers, lift interior and the basement entry at a cost of $14,799 plus an amount of $4,000 allowed for the cost of the tiles. The applicants state that work was performed on floors 1 to 4 but not the ground floor. They also state that from December 2009 to March 2011, the committee worked on a “concealed plan” to completely rework the ground floor/ entrance, doorways and entry stairs. Work on the ground floor foyer did not commence until November 2010. They further state that except for the entry stairs, all existing tiles were removed. By a motion passed outside a committee meeting it was resolved that a further $3,025 would be paid to have the ground floor tiled. The applicants also state that the treasurer paid the tiler $20,019 although they believe the work was incomplete.

The applicants believe that the committee secretly engaged the tiler to undertake the following work:

• Build a new stairway and handrails in a different location;
• “brick up” and fit aluminium cladding at the old entrance building line;
• Remove the existing glazed wall and entry door with an electric latch;
• Fit new entry door elsewhere with new support lintels;
• Remove and relocate 15 mail boxes and a 15 station intercom plus lighting;
• Replace the intercom system with a video system which the applicants believe would cost more than $20,000 “with no owner benefit”.
  

The applicants also advise that they submitted 11 motions the 2011 AGM on 21 January 2011. However, the applicants believe that the body corporate manager forwarded these motions to the committee “who took immediate steps in secret to pre-empt and defeat our motion 3 to re-tile the existing entrance stairs”.

The applicants also state that “during February L Ryan had a contractor prepare a quote to build new stairs to the right of the existing ones and had a development application prepared in respect of this work, prior to obtaining authority to do so from the committee. They believe that 7 owners opposed this and submitted 7 notices of opposition to challenge the resolution made outside a committee meeting. The applicants made a further objection on 28 March 2011 but have not received a response to this or their earlier notices of opposition.

Trevor Matthews and Carol Matthews attended the budget committee meeting on 2 April 2011 but noted that the agenda was “totally sanitised and uninformative” and “listed nothing in relation to the last few months of committee machinations in secret”. The applicants further state that G. Marling read the letter by Mr. Matthews regarding the fire pump and stated that there would be no review of the matter. Also at that meeting Mr. Howard stated that he wanted to have the concrete garage ceiling painted and K Thompson stated that she must have quotes by next Wednesday.

After a short break L. Ryan announced that a motion to enclose the front entrance and to fit new stair handrails was needed. The applicants further state that K. Thompson said that the old stairs had been condemned and G. Marling said that this was verified by an engineer’s report. Six of the seven voted in favour of a motion to accept a quote from Beta Aluminium Products to supply a 7.9 metre by 1 metre balustrade for $2,398.

The applicants also raise concerns regarding a motion for consideration outside a committee meeting issued on 11 April 2011, relating to a quotation by House of Style Pty. Ltd. to undertake the following work at a cost of $3,215.30:

• To provide 900mm high wall to fill in old entry rendered and painted to match existing walls;
• To provide 2300 x 1400 fixed glass panel at old entry.
  

More specifically, the applicants submit that:

• Under the guise of re-tiling foyers, the committee arranged for the refurbishment of the front entrance area at a cost exceeding $20,000 when most owners opposed this work;
• The replacement of the front entry area involves “improvements” rather than repairs;
• The relevant limit for committee spending is $4,500 but the committee has broken the one project down into various small projects to keep the individual cost of each small project below $4,500;
• The committee has deliberately conducted its affairs in secret to prevent owners having input into decision –making;
• The committee has failed to review the adequacy of budget provision for the various proposals;
• The committee are seeking to legitimise its activities by including motion 9 on the agenda for the next AGM on 30 April
• They do not believe it was necessary for the committee to have the entry stairs rebuilt at a cost of approximately $3,000;
• They believe that the garage ceiling does not require painting, that the work amounts to an “improvement” rather than maintenance and there is no provision for this work in the maintenance budget. It is therefore claimed that the committee resolution relating to the painting of the car park ceiling is invalid ;
• It is also claimed that the committee resolution to engage Eagle Pumps gold Coast Pty. Ltd. to undertake repairs fire pump and electric motor at a total cost of $3,672.50, is invalid.
  

Submissions

Pursuant to section 271 of the Act, the committee and body corporate manager were invited to make submissions regarding the interim orders sought.

Submissions made on behalf of the committee on 20 April 2011 included the following:

• The work referred to by the applicants was commissioned following the receipt of a report by an engineer, Mr. Kilmister, who raised serious liability issues in relation to the condition of the original entrance steps to the building. As a consequence of receiving the report, the committee obtained the necessary certification and approvals for the work;
• At the 2009 AGM, the body corporate resolved to set the committee spending limit and the relevant limit for major spending at $300 per lot. Therefore the committee spending limit and the relevant limit for major spending in this scheme is $4,500;
• As the next committee meeting was not scheduled until April, a decision was made by flying minute in March to proceed with the installation of the new entrance steps after quotations were sourced. This work has already been completed;
• The only other resolution made at the last committee meeting relating to the front entrance, concerns the installation of balustrades to the new stairs. As the required number of objections have not been lodged regarding this decision, it is suggested that there are no grounds for intervention;
• A supplementary proposal is to decommission the old unsafe steps and enclose the areas per motion 9 on the upcoming AGM agenda. Although safety issues will arise for the body corporate if there is delay.
• There are no future motions proposed regarding the front entrance;
• There is no evidence to suggest that the committee has acted unlawfully or failed to comply with any adjudicators’ orders;
• It is not appropriate to make an order that owners’ motions 13 to 22 on the AGM voting paper be voted upon without interference or adverse rulings by the Chairman or BCM. The issue of rulings by a Chairman and any ensuing rights of the meeting itself, are determined by the Regulation Module and there is no evidence to suggest that any other course of action will be followed;
• There is no valid reason advanced as to why Mr. Matthews should be provided with a security key to body corporate infrastructure, particularly that associated with fire safety and it is not appropriate to make such an order on an interim basis;
• The fire pump motor has already been repaired, and the cost, which was well under the committee spending limit, is the subject of an insurance claim.
  

Decision

In accordance with section 247 of the Act, the Commissioner for Body Corporate and Community Management has referred the application to me. Section 276(1) of the Act provides that an adjudicator may make an order 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. An order
may require a person to act, or prohibit a person from acting, in a way stated in the order (s 276(2), Act). An adjudicator's order may contain ancillary and consequential provisions the adjudicator considers necessary or appropriate (s 284(1), Act).

The making of interim orders is further governed by sub-sections 279(1) & (2) of the Act which provide as follows: -
(1) The adjudicator may make an interim order if satisfied, on reasonable grounds, that an interim order is necessary because of the nature or urgency of the circumstances to which the application relates.
Examples
1. The adjudicator may stop the body corporate from carrying out work on common property until a dispute about the irregularity of proceedings has been investigated and resolved.
2. The adjudicator may stop a general meeting deciding or acting on a particular issue until it has been investigated and resolved.
(2) An interim order
(a) has effect for a period (not longer than 1 year) stated in the order; and
(b) may be extended, varied, renewed or cancelled by the adjudicator until a final order is made; (c) may be cancelled by a later order made by the adjudicator; and
(d) if it does not lapse or is not cancelled earlier, lapses when
(i) the application is withdrawn; or
(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. ...

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[1] and any order granted must be just and equitable in the circumstances.[2] In determining whether it is just and equitable to grant interim relief it is relevant to briefly consider whether the application raises any serious questions for final determination. It is also relevant to consider whether any inconvenience likely to result from the interim order is outweighed by the potential detriment alleged in the application. Any evidence that an interim order is necessary to prevent serious or irreparable harm will be significant.

At this point in time I am considering an application for the following interim orders:

• That the committee motions listed below be declared invalid and that any related work in progress on or off site be ordered stopped pending the final outcome.

1. motion 7/3/2011 to supply and install stairs for $3,234;

2. motion 11/4/2011 to enclose old entry area $3,215.30;

3. motions which are claimed to have been made at committee meeting on 2/4/2011 (yet unpublished) but which relate to activities to the front entrance or its services;

4. any future motions or work proposed to be authorised to the front entrance or its services to be stopped pending a final order;

• That motion 9 on the AGM voting paper “enclose old entry stairs” be invalidated, (or alternatively not acted upon).
• That Carol Matthews (committee member and previous secretary) be authorised under regulation 65(2) to call and control an EGM of all owners, to seek assistance in preparation of reports and to put motions and explanatory notes together with costs to owners regarding dispute items and present the results to an adjudicator for final order.
• That AGM motion 11 “paint basement ceiling” be invalidated (or alternatively) not acted upon pending a final order.
• That owners’ motions 13 to 22 on the AGM voting paper be voted upon without interference or adverse rulings by the Chairman or BCM;
• That an order be made to provide Trevor Matthews with a key to the pump room and switch room so that he may initially examine the fire pump failure;
• That the work on the fire pump/ motor be stopped until a professional electrical engineer is chosen to lead the review, define the scope of work and supervise the tests and commissioning and to provide information to Carol Matthews for owners.
  

I note that an inspection of the premises has been conducted by Mr. Kilmister, a structural engineer and building surveyor who made the following observations in his report dated 6 December 2010:

• The front entrance steps were moving away from the parent building;
• At the date of inspection the gap exceeded the tolerance limits in the masonry code AS3700 and was continuing to grow;
• The ingress of water into the gap would lead to spallind and could also impact on insurance coverage in the event of an accident;
• The steps should be removed and brought up to standard to comply with the Building Code of Australia;
• Once the steps are removed, any signs of “concrete cancer” should be attended to.
  

On the evidence at hand, I do not believe that there was anything untoward about the decision of the committee to obtain the necessary approvals for the construction of the new stairs. I understand that this work is now completed and hence there is no basis for making an interim order regarding that work. Further, given that the new steps have been completed, I can see little benefit to anyone in making an interim order that the balustrade not be installed.

I understand that there were no further resolutions made at the last committee meeting regarding the front entrance.

The next matter that I turn to is the request for an interim order that the work on the fire pump/ motor be stopped until a professional electrical engineer is chosen to lead the review, define the scope of work and supervise the tests and commissioning. In this regard I note the advice received from the body corporate manager that the fire pump motor has already been repaired, and that the cost, which is well under the committee spending limit, is the subject of an insurance claim. Accordingly, the application for an interim order to prevent repairs to the fire pump is otiose. The applicants’ request for permission to inspect the pump room and switch room will be considered in the context of whether the requested final orders should be made.

However I do note the applicants’ allegation that the committee has broken down one project into various small projects to keep the individual cost of each small project below $4,500, which is the relevant limit for committee spending. At this point in time I do not have sufficient information at hand to make a ruling on this matter but do propose to consider this in deciding whether final orders should be made.

While much of the applicants’ material concerns allegations that the committee has exceeded its powers, the applicants are also seeking orders that any resolutions on certain motions to be considered at the next AGM, not be acted upon. These include Motion 9 regarding the enclosure of the old entry stairs; and motion 11 regarding the painting of the basement ceiling.At this point in time I am not satisfied that there is sufficient grounds to invalidate a resolution upon either motion and therefore do not propose to make interim orders regarding motions 9 and 11.

The next matter that I turn to, is the request for an interim order that “That Carol Matthews (committee member and previous secretary) be authorised under regulation 65(2) to call and control an EGM of all owners, to seek assistance in preparation of reports and to put motions and explanatory notes together with costs to owners regarding dispute items and present the results to an adjudicator for final order. I do not believe it is appropriate to make an interim order empowering a particular lot owner to call an EGM with an absolute discretion as to what matters will be included on the agenda for that meeting. I my view, section 67 of the Standard Module Regulation provides sufficient scope for concerned lot owners requisition an extraordinary general meeting. That section provides as follows:

Requirement for requested extraordinary general meeting
(1) An extraordinary general meeting (a requested extraordinary general meeting) of the body corporate must be called if a notice asking for an extraordinary general meeting to consider and decide motions proposed in the notice is--
(a) signed by or for the owners of at least 25% of all the lots included in the community titles scheme; and
(b) given to the secretary or, in the secretary's absence, the chairperson or, if the committee has not yet been chosen, given to the original owner.
(2) The secretary may be presumed to be absent if a notice is given to the secretary at the address for service of the body corporate, and no reply is received within 7 days.
(3) A requested extraordinary general meeting--
(a) must be called, within 14 days after the notice is given under subsection (1), by the person to whom the notice is given; and
(b) must be held within 6 weeks after the notice is given.
(4) A requested extraordinary general meeting of the body corporate may be called even though the body corporate's first annual general meeting has not yet been held.

Finally, I do not believe it is appropriate for an adjudicator to make an order, which purports to prospectively dictate to the Chairman of the Annual General Meeting, that he may not make any ruling upon motions 13 to 22. Obviously, if there are any concerns regarding the chairmanship of the meeting, these can be addressed after the meeting in accordance with the dispute resolution provisions of the Act.

For the above reasons I am not satisfied that interim orders are necessary to prevent serious or irreparable harm and am not satisfied that the balance of convenience favours the making of the interim orders sought. The application for interim orders is therefore dismissed.

The application for final orders remains on foot and will be dealt with in accordance with the usual processes undertaken by this Office, including calling of submissions in relation to the final orders sought.

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[1] Section 279 of the Act
[2] Section 276 of the Act