Hillside Place [2011] QBCCMCmr 29 (31 January 2011)

Last Updated: 21 February 2011

REFERENCE: 0069-2011

ORDER OF AN ADJUDICATOR

MADE UNDER PART 9 OF CHAPTER 6

BODY CORPORATE AND COMMUNITY MANAGEMENT ACT 1997

Number of Scheme:	17852
Name of Scheme:	Hillside Place
Address of Scheme:	10 Beaconsfield Street, Highgate Hill QLD 4101

TAKE NOTICE that pursuant to an application made under the abovementioned Act by the Body Corporate Committee for Hillside Place

I hereby order that an extraordinary general meeting of the Body Corporate for Hillside Place convened for the purpose of considering motions to consider the approval of expenditure for repairs to a leak in the roof of Lot 2 shall not be invalid simply because the requirement for 21 days notice in section 74 of the Body Corporate and Community Management (Standard 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 0069-2011

“Hillside Place” CTS 17852

Hillside Place community titles scheme 17852 (Hillside Place) consists of 11 lots and common property. The community management statement (CMS) for Rhode Island indicates that the Body Corporate and Community Management (Standard) Regulation 2008 (Standard Module) applies to the scheme. Department of Environment and Resource Management records show the scheme is registered as Building Units Plan 101039

APPLICATION

Under the Body Corporate and Community Management Act 1997 (Act), this application was made by the Body Corporate for Rhode Island (applicant) on 28 January 2011 pursuant to a committee resolution passed outside of a committee meeting on 21 January 2011.

The applicant sought a declaratory order to: “...seek permission to convene an Extraordinary General Meeting, with limited notice to owners, to consider motions to approve the quotation to repair the water leak.”

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]

Section 243A of the Act provides as follows:

243A Referral to dispute resolution officer in emergency

(1) This section applies if the commissioner reasonably considers—

(a) an application should be immediately referred to a dispute resolution officer because it relates to emergency circumstances; and

Example of emergency circumstances—

a burst water pipe the repair or replacement cost of which exceeds the body corporate committee’s expenditure limit under the regulation module applying to the scheme

(b) it is not appropriate to deal with the application under section 247.

(2) The commissioner may immediately refer the application to a dispute resolution officer without giving written notice as mentioned in section 243(1).

BACKGROUND

This application relates to expenditure on repairs to a leak in the roof of Lot 2.

The Body Corporate advises that the problem was first raised by the Owner of Lot 2 on 3 June 2010. Repairs were undertaken by Roof Masters on 30 July 2010, however the leak reoccurred. The Body Corporate sought a quotation from Roof and Building Services in October 2010, but they recommended that a registered builder be engaged. The Committee requested three quotes, but while numerous builders were invited to quote, only one quote was received on 14 December 2010 from R&B Madden Builders Pty Ltd. This quote was put to the Committee for consideration.

The Owner of Lot 2 then advised that the problem was getting worse and the Committee says it moved to take more urgent action. The Chairperson visited Lot 2 on 18 January 2011 and determined that leak had resulted in unacceptable living conditions and required urgent repair. The builder was requested to provide a revised quote to meet insurance requirements, and this was supplied on 26 January 2011. The applicant says the builder is able to undertake the work within two weeks.

The quote from R&B Madden Builders Pty Ltd comprises $6,705 (inc GST) to undertake roofing works on Lots 2 and 3, along with $1,020 (inc GST) to repair and paint the damaged walls and ceilings of Lot 2.

DETERMINATION

On the basis of the information provided, and notwithstanding that the issue of leaks in the Lot 2 roof have existed since June 2010, I am satisfied that there is evidence that an emergency exists such that there is a need to progress repairs as soon as practical.

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].

Section 151-153 of the Standard Module provide for the control of spending by a body corporate. The application says that the relevant limit for committee spending limit in this scheme is $2,420[6]. A committee is prohibited from authorising spending above the committee spending limit except in certain circumstances, including where an adjudicator is satisfied that the spending is required to meet an emergency and authorises it under an order[7].

An adjudicator has some scope to authorise expenditure in a situation that is an emergency and where spending must be incurred so urgently that it is not reasonably possible for a general meeting to be called to enable owners to approve the spending themselves. However, where there is some urgency, but not necessary a need for immediate spending, there is alternative option. Section 74 of the Standard 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 a seven day clear notice period would give adequate notice of the required motion to owners. It would allow time for a general meeting to be held and the expenditure motions considered by owners, within the time before the builder is available to undertake the work.

I do not believe this shortening of the notice period would disenfranchise voters or materially disadvantage owners from properly considering issue. It may be that many owners are already of the issue at least in general terms. However, given that there are only 11 owners, I would encourage the Committee to contact all owners directly to explain the issue (if they have not already done so) to address any concerns or queries that might otherwise hinder the passing of the motions. Moreover, the Committee should notify owners that the truncation of the normall notice period has been authorised by this order so that there is no confusion by owners.

I have made the order sought.

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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 159(1) of the Standard Module.

[6] It is noted that the Standard Module provides that the limit is $200 times the number of lot (which would be $2,200 in this scheme on the basis of 11 times $200), unless another amount has been set as the limit by ordinary resolution at a general meeting. It is unclear whether the referenced amount of $2,420 is an amount set at a general meeting, or is a typographic error, but as the difference is not relevant to the application it is not necessary for me to investigate that issue further.
[7] Section 151(1)(d) of the Standard Module