View Pacific [2011] QBCCMCmr 27 (31 January 2011)

Last Updated: 21 February 2011

REFERENCE: 0053-2011

INTERIM ORDER OF AN ADJUDICATOR

MADE UNDER PART 9 OF CHAPTER 6

BODY CORPORATE AND COMMUNITY MANAGEMENT ACT 1997

Number of Scheme:	12064
Name of Scheme:	View Pacific
Address of Scheme:	5 View Avenue SURFERS PARADISE QLD 4217

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

Vincent Bastos, an owner of lot 30

I hereby order that, pending a final determination, body corporate committee members must not enter into any new spending commitment of more than $6,800 on any one project. This is unless the spending is authorised by a resolution passed in general meeting. I further order that, pending a final determination, body corporate committee members must not enter into any new spending commitment of more than $10,000 on any one project without owners being given the opportunity to vote on at least two separate quotations. This is an interim order and will remain in effect for a period of not longer than six 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 This order will automatically lapse upon a final order being made or this application being withdrawn.

STATEMENT OF ADJUDICATOR’S REASONS FOR DECISION - REF 0053-2011

“View Pacific” CTS 12064

Introduction

View Pacific is a 34 unit complex at Surfers Paradise. Vincent Bastos owns unit 30. Mr Bastos has sought an interim order to stop the body corporate for View Pacific from proceeding with various works around the complex.

As an owner, Mr Bastos is required to contribute funds towards any spending by his body corporate. Mr Bastos says the committee and body corporate manager are ignoring the rules and regulations regarding spending of body corporate funds.

When is an interim order justified?

An interim order is normally only justified when:

1. The application raises a serious question that will need to be determined; and
2. The inconvenience likely to result from the interim order is outweighed by the potential detriment if the order is not granted.
   

I will make a determination on these issues with reference to the Body Corporate and Community Management Act (Act) and the Act’s Accommodation Module Regulation (Accommodation Module).

Analysis

1. Serious question to be determined

The owners of units within View Pacific have elected a committee to assist with day to day management of their complex. They have also appointed a body corporate manager to provide administrative assistance with this management.

Any spending by the body corporate must be authorised by the passing of a resolution. The committee can authorise spending up to the committee spending limit (Accommodation Module, 149). Spending above the committee limit must be authorised by a resolution of owners in general meeting. Further, at least two quotations must be obtained before spending above the major spending limit is approved (Accommodation Module 150, 151).

Mr Bastos says the body corporate committee and body corporate manager are ignoring the requirements of the legislation regarding spending. He specifically refers to current or imminent work on painting, concrete rectification and the installation of a pool umbrella. Mr Bastos indicates in his application that he requested copies of the quotations obtained by the body corporate for this spending but this documentation was not supplied.

The body corporate manager has said the works in question were approved by committee resolutions passed on 4 January 2011. However, the body corporate manager has not supplied copies of these resolutions or the quotations considered.

The relevant limit for committee spending in View Pacific will be $6,800 and the major spending limit requiring two quotations will be $10,000.[1] Based on Mr Bastos’ description of the work being performed and the failure by the body corporate manager to provide details of the amount of spending authorised, there is a serious question raised as to whether the body corporate committee has complied with the legislation regulating spending of body corporate funds.

2. Inconvenience from an interim order

Mr Bastos has provided some justification for an interim order prohibiting the planned works and spending. However, it is possible Mr Bastos will not ultimately establish any contravention of the legislation. Also, it would appear that the body corporate has already committed to some of the work with third party contractors and the body corporate might therefore be liable to compensate those third parties if the works did not proceed.

In the circumstances, it is just and equitable to make an interim order prohibiting committee members from entering into any new commitments that involve spending of more than $6,800 on any one project without owner approval (or more than $10,000 without owners choosing between at least two separate quotations). However, it is not appropriate to make an interim order to prevent works that are partially complete or works that the body corporate has already entered into a legally binding contract for.

Conclusion

I will grant an interim order that will temporarily prohibit the committee from entering into new spending commitments that could be contrary to the legislation.

Owners will be given an opportunity to make submissions regarding the present application before any final order is made.

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[1] There is no evidence that owners within View Pacific have passed a resolution to alter the standard spending limits. In that case, the Schedule to the Accommodation Module defines the relevant limit for committee spending to be $200 per lot and the relevant limit for major spending in View Pacific to be $10,000.