Arriva [2011] QBCCMCmr 35 (7 February 2011)

Number of Scheme:	39225
Name of Scheme:	Arriva
Address of Scheme:	Ferry Road West End QLD

TAKE NOTICE that pursuant to an application made under the abovementioned Act by the body corporate for Arriva community titles scheme 39225

I hereby authorise the committee of the body corporate for Arriva community titles scheme 39225 to engage:

TJV Electrical to undertake the rectification works stated in the quotation dated 25 January 2011 at a cost not to exceed $30,105.00 (plus GST).
Eletech Pty Ltd to undertake the rectification works stated in the quotation dated 20 January 2011 at a cost not to exceed $81,293.00 (plus GST).

This application was made to the commissioner on 1 February 2011. It was amended on 4 February. The commissioner has referred the application to an adjudicator under section 243A of the Body Corporate and Community Management Act 1997 (Act) without giving written notice pursuant to section 243(1) of the Act. Section 243A provides the commissioner may refer an application immediately to an adjudicator if he reasonably considers the application relates to emergency circumstances and it is not appropriate to deal with the application under section 247 of the Act.

The application was made as a consequence of the resolution of the committee by voting outside a committee meeting dated 4 February (s 54, Body Corporate and Community Management (Accommodation Module) Regulation 2008). A decision of the committee of this nature is a decision of the body corporate (s 100(1) and (2), Act and s 42(1)(e)(iv), Accommodation Module).

The body corporate seeks immediate authorisation to approve quotations from TJV Electrical to rectify an electrical switchboard and from Eletech Pty Ltd to rectify lifts. It provided a copy of a quote from TJV Electrical dated 25 January for $30,105.00 (plus GST) and a copy of a quote from Eletech dated 20 January for $81,293.00 (plus GST).

The body corporate states the quoted work is necessary to rectify defects caused when the scheme was inundated with flood water. It submits that, as a consequence of the flood, the building does not have operable lifts (residents have to climb up to 8 stories to access their apartments), and the basements cannot be used without operable lights and exhaust ventilation. On 20 January, Eletech quoted for the work necessary to reinstate the lifts damaged from water. The body corporate also provided a copy of a quotation from ThyssenKrupp Elevator Australia dated 25 January after its inspection of “the flood damaged lift”. On 25 January, TJV Electrical stated the recent flooding damaged electrical equipment.

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 (s 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 (s 157(1), Accommodation Module). The quotations refer to defects in the lifts and in basements. The survey plan for the scheme (SP 213042) indicates levels A and B of the building are common property. It is apparent from the material that extensive work is necessary to maintain common property in good condition.

Given legislative constraints, the amounts of spending stated in the quotes from TJV Electrical and Eletech exceeds the amounts that can be approved by the committee. Unless the body corporate has decided otherwise (which is not argued), the committee spending limit is $11,400.00 or $200 multiplied by the 57 lots included in the scheme (relevant limit for committee spending, defined schedule, Accommodation Module). It would also seem the quoted amounts are also more than the relevant limit for major spending for the scheme of $10,000 (defined schedule, Accommodation Module).

In these circumstances, the committee could call a general meeting for owners to consider an appropriate motion/s (s 63, Accommodation Module) or it could seek authorisation from an adjudicator (s 149(1)(c) and (3), Accommodation Module). The committee could also give effect to the proposals if the spending is necessary to comply with: a statutory order or notice given to the body corporate; or the order of an adjudicator; or the judgment or order of a court (s 149(1)(d) and (3), Accommodation Module).

There is nothing to suggest section 149(1)(d) is relevant. At least 21 days notice of a general meeting must be given to lot owners (s 72, Accommodation Module). The body corporate states if the quoted work is delayed until an extraordinary general meeting is convened, there will be further delays ordering parts which would result in a prolonged period of reduced habitability of the building. In my view, this is a significant consideration. I am satisfied the committee has explained why the time delay in convening an extraordinary general meeting would be to the detriment of the body corporate.

In these circumstances, the committee may only give effect to the proposed spending if an adjudicator is satisfied the spending is required to meet an emergency and authorises it under an order made under the dispute resolution provisions (s 149(1)(c), Accommodation Module). An adjudicator may make an order that is just and equitable in the circumstances (including a declaratory 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 (s 276(1), Act).

On the basis of submissions, I am satisfied an emergency situation has arisen in the scheme and that the quoted spending is required.

The body corporate provided 2 quotations to maintain the lifts: from Eletech and ThyssenKrupp. It would appear given the difference of the quoted amounts that ThyssenKrupp contemplates more work than Eletech. The body corporate states Eletech is the contracted supplier and maintenance firm for the lifts, going to an outside contractor would be more expensive and Eletech would not warrant work carried out by an outside contractor. With respect to the electrical work, the body corporate states the committee was not able to source an alternate electrical quotation and TJV Electrical was recommended by the scheme’s developer. It would also seem from the quote that TJV Electrical has already carried out rectification work on the scheme since the flood. In my view, the committee has demonstrated it is not practicable to obtain more than 1 quotation for the rectification work. The body corporate relevantly submits the expenditure is to be met from the sinking fund which it anticipates will be reimbursed by contributions fixed at an extraordinary general meeting scheduled to be held later this month.

In the circumstances, I am satisfied it is appropriate to authorise emergency spending in the terms sought.

Queensland Body Corporate and Community Management Commissioner - Adjudicators Orders

Arriva [2011] QBCCMCmr 35 (7 February 2011)