Royal Palm [2011] QBCCMCmr 279 (28 June 2011)

Last Updated: 19 July 2011

ADJUDICATOR’S ORDER
Office of the Commissioner
for Body Corporate and Community Management

CITATION:	Royal Palm [2011] QBCCMCmr 279
PARTIES:	The Body Corporate for Royal Palm CTS 9098 (applicant) N/A (respondent) All owners (affected person/s)
SCHEME:	Royal Palm CTS 9098
JURISDICTION:	Sections 227(2) of the Body Corporate and Community Management Act 1997 (Qld) (Act) (Declaratory orders) and The Body Corporate and Community Management (Accommodation Module) Regulation 2008 (Accommodation Module).
APPLICATION NO:	0601-2011
DECISION DATE:	28th June 2011
DECISION OF:	J.D.M.Underdown, Adjudicator
CATCHWORDS:	DECLARATORY ORDER FOR REDUCING NOTICE PERIOD FOR HOLDING GENERAL MEETING – circumstances of necessity of timely repairs. Section 72 Accommodation Module; section 157(1) Accommodation Module.

ORDERS MADE:

I hereby order that an extraordinary general meeting of the body corporate convened for the purpose of the adoption of an administration fund budget and a sinking fund budget, and the fixing of contributions payable, will not be held to be invalid simply because the requirement of section 72 Body Corporate and Community Management (Accommodation Module) Regulation 2008 of 21 days’ notice is not complied with, provided that the meeting is not held until at least seven clear days notice of the meeting has been given to all lot owners, that is the day of sending out the notice and the day of the meeting shall not count as part of the notice period. I further order that the body corporate shall give notice of the proposed general meeting to owners by electronic means where possible, in addition to the sending out of written notices to each owner at his or her address for service, or to being given personally, pursuant to section 68 Body Corporate and Community Management (Accommodation Module) Regulation 2008.

REASONS FOR DECISION
APPLICATION

[1] This is an application dated 27th June 2011 by the body corporate for Royal Palm CTS 9098 for a declaratory order that the notice period for the holding of a general meeting be reduced from 21 days to seven days.
[2] The general meeting proposes to consider a motion to approve funding for the pool renovation approved at an annual general meeting on 22nd June 2011.

JURISDICTION

[3] “Royal Palm” CTS 9098 is a 152-lot community title scheme at Palm Beach on the Gold Coast governed by the Act and the Accommodation Module. The application is to be resolved under the Act and the Accommodation Module which applies the Act, because it seeks a declaratory order to curtail the notice provisions for general meetings which are provided in the Accommodation Module.
[4] Section 227(2) Act provides that a body corporate may make an application for a declaratory order which is considered to be “a dispute” for the purposes of the Act even though there is no respondent to the application.
[5] Section 276 Act provides that an adjudicator to whom the application is referred may make an order that is just and equitable in the circumstances in the context of the scheme.

SUBMISSIONS

[6] The body corporate says that in anticipation of an extraordinary general meeting to be convened on 22nd June 2011, an interim order was made by an adjudicator on 17th June 2011 in another dispute lodged with this Office, about the reasonableness of the body corporate entering into contracts for pool refurbishment which would cost the body corporate “around $1 million”.
[7] The adjudicator was concerned about whether the refurbishments had been budgeted for in the sinking fund, and whether the levying of a special contribution might be necessary. He ordered that the body corporate not take any action to refurbish the pool if the motion to refurbish the pool was carried at the extraordinary general meeting, “unless the body corporate adopts a budget or special levy that covers the cost of putting the resolution into effect.”
[8] At the extraordinary general meeting held on 22nd June 2011 the body corporate authorised the refurbishment of the pool area and perimeter fencing by votes 72 – 26 by a motion in the alternative with 61 votes for the work to be carried out by Made Constructions for $909,137.00 “plus an allowance of 5% of the total cost of the project for any unforeseen contingencies” to come from the sinking fund
[9] In his reasons for decision in the interim order, the adjudicator included a view that in order not to delay repairs/refurbishment, “if a sufficient number of owners want the pool refurbishment to proceed they might wish to call a further extraordinary general meeting at which appropriate budgets or special levies can be adopted.” He also mentioned, that if the refurbishment works were urgent, then an order could be sought to reduce the notice period for the meeting.
[10] The body corporate says that no special levy is required. The body corporate has already increased the sinking fund levy in order to cover the pool restoration based on a sinking fund forecast by Leary and Partners in 2006. However, on 22nd June 2011, the committee established a new sinking fund forecast including expenses for the pool restoration in 2011.
[11] The body corporate want to put this budget to a general meeting as soon as possible. It says that the work can only be done in the cooler months when the pool is not in high demand, and the work will take about 12 weeks. The pool needs to be available for the school holidays commencing mid-September 2011. The body corporate is also concerned about losing the cost of the tender currently approved.
[12] The pool currently leaks about 8,000 litres of chemically treated water a day estimated to cost the body corporate about $56 per day in lost water and $54 per day in lost chemicals.
[13] The body corporate says that owners will not be disadvantaged by a reduced notice period.
[14] The body corporate proposes to call a general meeting on or about 6th July 2011 “to consider adopting budgets.”

DECISION

[15] 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 (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).
[16] It seems that whatever refurbishments may be agreed to the swimming pool area, the pool itself is in a dire state of repair and leaking badly. This is a poor environmental state of affairs, as well as costly and wasteful to the body corporate.
[17] I was concerned that the application now made by the body corporate was not simply to thwart the outcome of application 0531-2011, but made in pursuance of the interim order. I sought from the body corporate a copy of the proposed motions for the next general meeting.
[18] The two motions of substance proposed are for the adoption of an administrative fund budget and the adoption of a sinking fund budget, in each case including the fixing of the contribution. There seems to me to be no reason why these two motions should not be put to the vote at a general meeting.
[19] I note that there are 152 owners in this scheme and that the body corporate has just held a general meeting on 22nd June 2011. The next meeting proposed to be held “on or about” 6th July 2011.
[20] Since it is now 4.30pm on 28th June 2011, the proposed meeting date is now only 8 days way, so that I am of the view, that seven “clear days’” notice, that is excluding the day of the meeting and the day on which the notices are sent out, cannot be given unless the notices are sent out today to all owners, which despite the best efforts of this Office and the body corporate manager, I consider unlikely.
[21] Section 39A Acts Interpretation Act says that notice is deemed to be effected at the time at which a letter would be delivered in the ordinary course of post, unless the contrary is proved.
[22] I note that the body corporate will also give notice by electronic means where possible.
[23] However, I am of the view that notice less than seven “clear” days is not reasonable to enable owners to view and digest the proposed budgets, and explanatory schedule, ask any questions they might need to ask, and cast their votes. There is also a real concern that some owners may be disenfranchised if less than seven clear days’ notice is given.
[24] I therefore order that in the circumstances of repairs required to the swimming pool being undertaken expeditiously and in the winter months, that the body corporate may reduce the period of notice of 21 days required by section 72 Accommodation Module.
[25] A general meeting for the adoption of an administration fund budget and a sinking fund budget, and the fixing of contributions payable, will not be held to be invalid simply because the requirement for 21 days notice is not complied with, provided that the meeting is not held until at least seven clear days notice of the meeting has been given to all lot owners, that is the day of sending out the notice and the day of the meeting do not count as part of the notice period.