Riverpoint Apartments [2011] QBCCMCmr 23 (27 January 2011)

Last Updated: 21 February 2011

REFERENCE: 0054-2011

ORDER OF AN ADJUDICATOR

MADE UNDER PART 9 OF CHAPTER 6

BODY CORPORATE AND COMMUNITY MANAGEMENT ACT 1997

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

Body Corporate

STATEMENT OF ADJUDICATOR’S REASONS FOR DECISION - REF 0054-2011

“Riverpoint Apartments” CTS 40785

APPLICATION

This is an application dated 24th January 2011, and amended on 25th January 2011 by the body corporate for Riverpoint Apartments CTS 40785 (the body corporate) for a declaration that it may reduce the 21 day period required for holding an extraordinary general meeting in order to put a motion(s) for the raising of a special contribution to meet repair works required urgently following flood damage in the week 10th – 14th January 2011.

JURISDICTION

“Riverpoint Apartments” CTS 40785 is a community title scheme governed by the Body Corporate and Community Management Act 1997 (the Act) and the Body Corporate and Community Management (Accommodation Module) 2008 (Accommodation Module). There are 129 lots in the scheme created under a Building Format Plan of subdivision.

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) a claimed or anticipated contravention of the Act or the community management statement; or

(b) the exercise of rights or powers, or the performance of duties, under the Act or the community management statement; or

(c) a claimed or anticipated contractual matter about-

(i) the engagement of a person as a body corporate manager or service contractor for a community titles scheme; or

(ii) the authorisation of a person as a letting agent for a community titles scheme.

An order may require a person to act, or prohibit a person from acting, in a way stated in the order (section 276(2)). An adjudicator's order may contain ancillary and consequential provisions the adjudicator considers necessary or appropriate (section 284(1)).

Section 243A Act applies if the commissioner reasonably considers an application should be immediately referred to a dispute resolution officer because it relates to emergency circumstances and it is not appropriate to deal with the application under section 247 Act which deals with interim orders. The commissioner may immediately refer the application to an adjudicator without giving written notice to affected persons pursuant to section 243(1)(c)Act.

SUBMISSIONS

The building was inundated on 11th January 2011, taking out all the plant and equipment in the basement, and power to the building was cut. The pumps were inoperable and all motors were damaged. The body corporate has submitted a claim to its insurers but is not sure when or if it will be met.

The body corporate has prepared a damage report and a preliminary estimate of costs for the clean-up, hire of plant and equipment, purchases involved in the clean-up, temporary electrical power and supply, pump equipment, rubbish disposal, repairs to the electricity supply and switchboards, repairs to ducting and air-conditioning, replacement of pumps and sensors, repairs to sewer and stormwater pumps, repairs to 8 lifts and replacement of lift equipment, pool pumps, entry roller door, fire doors, painting and “miscellaneous.”

The total estimate is $551,341.35 including supervision and co-ordination of the repairs, exclusive of GST.

Two contractors, SDF Electrical Pty Ltd and Schindler Lifts have been consulted, with SDF being able only to give an estimate of between $150,000 and $200,000 for its part in the repairs.

Owners cannot “realistically live there without power/lifts/security, communications and safety, eg. having fire pumps etc. working.” There is also a cost to investor owners in not being able to rent out their units. The committee wishes to reiterate the urgency of reinstating services as soon as possible.

At a committee meeting held on 21st January 2011, the body corporate resolved to put a motion to a general meeting for a “special levy” of $88.79 per contribution schedule lot entitlement to raise funds to pay for repairs to the common property. The body corporate is due to hold its annual general meeting (AGM) on 31st January 2011, and hoped to add such a motion to the agenda even though the notices for the AGM had been sent out. The proposed motion was that the special contribution be levied in two instalments, one due on 1st March 2011 and one due on 1st April 2011.

I considered that there was insufficient time to notify all lot owners of the additional motion, bearing in mind that 25th January 2011 was a public holiday, leaving only Thursday and Friday on which to send out the notice and invite votes by mail on the new motion. The body corporate therefore amended its application to this Office, for the holding of an extraordinary general meeting to be held at some time after the AGM with “limited notice to owners” in the circumstances.

DETERMINATION

The 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). The body corporate has demonstrated that since the flood, it has taken steps to assess the nature and cost of the damage and to draft a comprehensive plan to reinstate the common property.

On the basis of these submissions, I am satisfied that an emergency situation has arisen in the scheme.

Section 72 Accommodation Module requires that a general meeting must be held at least 21 days after notice of the meeting is given to all owners of lots. However, the objects of the Act include providing flexible and contemporary communally based arrangements for the use of land and recognise self management as an inherent aspect of community titles scheme (Act 2, 4). Courts have recognised that the very detailed provisions of the applicable regulations make it almost inevitable that there will be failures to comply with the regulations from time to time[1] and courts have always accepted that it is unlikely that it was a purpose of the legislation that an act done in breach of a statutory provision should be invalid if public inconvenience would be a result.[2] In emergency circumstances, adjudicators have abridged the requirement of 21 days’ notice.[3] Such notice might also be shortened by unanimous agreement[4] of all owners which might occur, for example, where the ownership of all lots is held by one person.

The concern with a body corporate meeting proceeding without 21 days’ notice is the shorter notice period has the potential to deprive some owners of a chance to properly consider and vote upon the motions in question. However, for the reasons given by the body corporate, the matters relating to repairing damage to scheme land need to be dealt with as quickly as possible, and funds need to be raised to deal with the repairs. The procedures for an extraordinary general meeting allow for owners to submit a written voting paper. It would seem reasonable to expect that most owners who have a strong interest in the repair issues will regularly check their mail and will have adequate opportunity to submit their written vote on these urgent issues with at least 7 days notice of the meeting.

On balance I am satisfied that the proposed meeting to consider these urgent issues will not be invalid simply because the usual requirement for 21 days notice of the meeting is not complied with. However, I consider that at least 7 clear days notice of a motion must be given to owners as a reasonable period in which to be informed of a motion and to be able to cast a vote. That is, there must be seven days’ notice excluding the day on which the notice is sent out and excluding the day on which the meeting is held.

I note that section 140 of the Accommodation Module requires that 30 days’ written notice of the date for payment of a contribution or an instalment of a contribution must be given to each owner.

The original proposal of the committee was that the motion might be included at the AGM on 31st January, and if the motion was carried, that the first payment be made on 1st March. There being only 28 days in February, this would not have allowed the body corporate to give the required 30 days notice, even if the body corporate had issued the notice of contribution on the same day as the AGM.

It seems to me that the body corporate needs to know that it can invite contractors to perform certain repair work, and that it has enough resources, at least initially, to be able to engage contractors. There is as yet, no pressing requirement to pay specific contractors for work done. I therefore do not propose to limit or curtail the 30 day notice requirement for actual payment of any contribution (which is not sought in any event in the application). It would appear that owners should have the time provided by law in which to obtain and pay what for some owners may be a significant amount of money.

[1] Wei-Xin Chen v Body Corporate for Wishart Village CTS 19482, Appeal 4080 of 2000, District Court Brisbane, 29 May 2001.

[2] Project Blue Sky Inc v Australian Broadcasting Authority [1998] HCA 28; (1998) 194 CLR 355 at paragraph 97.

[3] Tennyson Reach 0038-2011

[4] Baggot & Anor –v- Whafflm Pty Ltd & Anor [2000] QSC 167