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20181085-ASC11 - North Point Brisbane [2012] QBCCMCmr 355
5KIPGFD[#WUV.++
ADJUDICATOR’S ORDER
Office of the Commissioner
for Body Corporate and Community Management
CITATION: North Point Brisbane [2020] QBCCMCmr 355
PARTIES: Ballada Pty Ltd (represented by Graham Kildey), Owner of Lot 18 and 19,
and Andrew Abaza, Owner of Lot 47 (applicants)
Body Corporate for North Point Brisbane,
and Queensland Police Credit Union Limited (QPCU), Owner of
Lots 1-12, 29, 34, 36, 51-68, 73-74 (respondents)
SCHEME: North Point Brisbane CTS 7575
JURISDICTION: Body Corporate and Community Management Act 1997 (Qld) (Act),
ss 227(1)(a) and (b), 229(3)(a)
Body Corporate and Community Management (Commercial Module)
Regulation 2008 (Commercial Module)
APPLICATION NO: 0732-2011
DECISION DATE: 7 August 2012
DECISION OF: ID Rosemann, Adjudicator
CATCHWORDS: GENERAL MEETING PROCEDURES – whether a vote was validly
excluded – whether notice of a general meeting was valid – whether
general meeting resolutions were valid - MAINTENANCE – whether a lot
owner is responsible for the cost of an air-conditioning upgrade -
COMMON PROPERTY – whether a lot owner is required to account to
the body corporate for rent received from leasing its exclusive use areas
– whether a lot owner is required to pay rent and meet other obligations in
regard to an improvement made to common property.
Act, ss 11, 20, 35, 171, 177, 270; Commercial Module, ss 53, 115, 116,
117 120, 123, 126, 129
ORDERS MADE:
I hereby order that the application seeking the following orders:
With regard to the Body Corporate for North Point CTS 7575
- All purported resolutions made 12 July 2011 be set aside
- The purported Notice of EGM of 21 June 2-11 be set aside
With regard to the Queensland Police Credit Union, QPCU.
- That the QPCU pay all the costs of new air-conditioning installed for its premises at
Ground Floor and Level 1 at North Point.
- That the QPCU forthwith account to the Body Corporate for all moneys received by it in
respect of car parks let out by it on common property on the upper level Car Park under
an exclusive use basis procured in its favour.
- That the QPCU forthwith account to the Body Corporate for rental and compensation
for the ATM it has installed in the ground floor lobby in the amount of $12,580pa in the
first year increasing by 4%pa every year thereafter.
- That QPCU be required to execute a lease and be responsible for all electricity used as
well as proper maintenance and appearance of the ATM enclosure as well as all
reinstatement costs incurred if and when the ATM is removed.
is dismissed.
I HEREBY CERTIFY this is a true copy of the order and reasons for decision.
Dated this day of 2012. ______________________________
4GVTKGXGFHTQO#WUV.++QP/CTEJCV ID Rosemann, Adjudicator 8GTKH[XGTUKQP
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Signed by AustLll
ADJUDICATOR’S ORDER
Office of the Commissioner
for Body Corporate and Community Management
CITATION: North Point Brisbane [2020] QBCCMCmr 355
PARTIES: Ballada Pty Ltd (represented by Graham Kildey), Owner of Lot 18 and 19,
and Andrew Abaza, Owner of Lot 47 (applicants)
Body Corporate for North Point Brisbane,
and Queensland Police Credit Union Limited (QPCU), Owner of
Lots 1-12, 29, 34, 36, 51-68, 73-74 (respondents)
SCHEME: North Point Brisbane CTS 7575
JURISDICTION: Body Corporate and Community Management Act 1997 (Qld) (Act),
$s 227(1)(a) and (b), 229(3)(a)
Body Corporate and Community Management (Commercial Module)
Regulation 2008 (Commercial Module)
APPLICATION NO: 0732-2011
DECISION DATE: 7 August 2012
DECISION OF: ID Rosemann, Adjudicator
CATCHWORDS: GENERAL MEETING PROCEDURES - whether a vote was validly
excluded — whether notice of a general meeting was valid — whether
general meeting resolutions were valid - MAINTENANCE — whether a lot
owner is responsible for the cost of an air-conditioning upgrade -
COMMON PROPERTY - whether a lot owner is required to account to
the body corporate for rent received from leasing its exclusive use areas
— whether a lot owner is required to pay rent and meet other obligations in
regard to an improvement made to common property.
Act, ss 11, 20, 35, 171, 177, 270; Commercial Module, ss 53, 115, 116,
117 120, 123, 126, 129
ORDERS MADE:
| hereby order that the application seeking the following orders:
With regard to the Body Corporate for North Point CTS 7575
- All purported resolutions made 12 July 2011 be set aside
- The purported Notice of EGM of 21 June 2-11 be set aside
With regard to the Queensland Police Credit Union, QPCU.
That the QPCU pay all the costs of new air-conditioning installed for its premises at
Ground Floor and Level 1 at North Point.
- That the QPCU forthwith account to the Body Corporate for all moneys received by it in
respect of car parks let out by it on common property on the upper level Car Park under
an exclusive use basis procured in its favour.
- That the QPCU forthwith account to the Body Corporate for rental and compensation
for the ATM it has installed in the ground floor lobby in the amount of $12,580pa in the
first year increasing by 4%pa every year thereafter.
- That QPCU be required to execute a lease and be responsible for all electricity used as
well as proper maintenance and appearance of the ATM enclosure as well as all
reinstatement costs incurred if and when the ATM is removed.
is dismissed.
| HEREBY CERTIFY this is a true copy of the order and reasons for decision.
Dated this day of 2012.
ID Rosemann, Adjudicator
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“ The above order was appealed in the Queensland Civil and Administrative Tribunal – Appeal
No APL319-12.”
I HEREBY CERTIFY this is a true copy of the order and reasons for decision.
Dated this day of 2012. ______________________________
4GVTKGXGFHTQO#WUV.++QP/CTEJCV ID Rosemann, Adjudicator 8GTKH[XGTUKQP
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Signed by AustLll
“The above order was appealed in the Queensland Civil and Administrative Tribunal — Appeal
No APL319-12.”
| HEREBY CERTIFY this is a true copy of the order and reasons for decision.
Dated this day of 2012.
Retrieved from AustLII on 30 March 2020 at 16:27:59 ID Rosemann, Adjudicator Verify version
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REASONS FOR DECISION
Introduction
[1] This application primarily relates to the conduct and outcomes of the Body Corporate’s
Extraordinary General Meeting (EGM) on 12 July 2011. The main purpose of the meeting was
to consider motions relating to major work to upgrade the scheme’s air-conditioning system.
[2] Initially the first applicant simply disputed the failure to count its purported EGM vote. The
Body Corporate says the voting paper was not received. The first applicant sought an interim
order to stop the EGM motions, which was dismissed 1. The application was then amended to
add the second applicant, second respondent and several additional outcomes.
[3] In regard to the Body Corporate, the application now argues the EGM notice and motions were
confusing and misleading. It seeks to invalidate the EGM notice and resolutions. The issue to
be determined is whether the EGM notice and resolutions met the legislative requirements.
[4] Next, the applicants want QPCU to pay for the new air-conditioning installed in its ground floor
and level 1 lots; account to the Body Corporate for income received by it for leasing out its
exclusive use car spaces; pay the Body Corporate rent and compensation for the ATM it
installed in the ground floor lobby; and execute a lease, pay for electricity and pay for
maintenance in respect of the ATM. It will therefore be necessary to determine whether the
actions of QPCU in regard to those issues complied with the requirements of the legislation.
Preliminaries
[5] North Point Brisbane community titles scheme 7575 (North Point) consists of 76 lots and
common property. The community management statement (CMS) shows the Commercial
Module applies to the scheme. The scheme is registered as Building Units Plan 7688.
Application
[6] This application was lodged under the Act on 5 August 20112.
[7] On 19 August 2011 I made an order dismissing the application for interim orders.
[8] The application was then amended, and now seeks the following outcomes:
With regard to the Body Corporate for North Point CTS 7575
- All purported resolutions made 12 July 2011 be set aside
- The purported Notice of EGM of 21 June 2-11 be set aside
With regard to the Queensland Police Credit Union, QPCU.
- That the QPCU pay all the costs of new air-conditioning installed for its premises at
Ground Floor and Level 1 at North Point.
- That the QPCU forthwith account to the Body Corporate for all moneys received by it in
respect of car parks let out by it on common property on the upper level Car Park under
an exclusive use basis procured in its favour.
- That the QPCU forthwith account to the Body Corporate for rental and compensation
for the ATM it has installed in the ground floor lobby in the amount of $12,580pa in the
first year increasing by 4%pa every year thereafter.
- That QPCU be required to execute a lease and be responsible for all electricity used as
well as proper maintenance and appearance of the ATM enclosure as well as all
reinstatement costs incurred if and when the ATM is removed.
Procedural matters
[9] Prior to determining the interim order applicant, an interim submission was received from the
Body Corporate Manager (BCM), Stewart Silver King and Burns (SSKB).
1
North Point Brisbane [2011] QBCCMCmr 354
2
Initially the application was lodged as an application for the order of a referee under the Building Units and
Group Titles Act 1980. An adjudication application form was subsequently submitted.
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REASONS FOR DECISION
Introduction
«1 This application primarily relates to the conduct and outcomes of the Body Corporate’s
Extraordinary General Meeting (EGM) on 12 July 2011. The main purpose of the meeting was
to consider motions relating to major work to upgrade the scheme’s air-conditioning system.
(2 Initially the first applicant simply disputed the failure to count its purported EGM vote. The
Body Corporate says the voting paper was not received. The first applicant sought an interim
order to stop the EGM motions, which was dismissed’. The application was then amended to
add the second applicant, second respondent and several additional outcomes.
(31 In regard to the Body Corporate, the application now argues the EGM notice and motions were
confusing and misleading. It seeks to invalidate the EGM notice and resolutions. The issue to
be determined is whether the EGM notice and resolutions met the legislative requirements.
14 Next, the applicants want QPCU to pay for the new air-conditioning installed in its ground floor
and level 1 lots; account to the Body Corporate for income received by it for leasing out its
exclusive use car spaces; pay the Body Corporate rent and compensation for the ATM it
installed in the ground floor lobby; and execute a lease, pay for electricity and pay for
maintenance in respect of the ATM. It will therefore be necessary to determine whether the
actions of QPCU in regard to those issues complied with the requirements of the legislation.
Preliminaries
ts) North Point Brisbane community titles scheme 7575 (North Point) consists of 76 lots and
common property. The community management statement (CMS) shows the Commercial
Module applies to the scheme. The scheme is registered as Building Units Plan 7688.
Application
(4) This application was lodged under the Act on 5 August 201 47.
7 On 19 August 2011 | made an order dismissing the application for interim orders.
(31 The application was then amended, and now seeks the following outcomes:
With regard to the Body Corporate for North Point CTS 7575
- All purported resolutions made 12 July 2011 be set aside
- The purported Notice of EGM of 21 June 2-11 be set aside
With regard to the Queensland Police Credit Union, QPCU.
- That the QPCU pay all the costs of new air-conditioning installed for its premises_at
Ground Floor and Level 1 at North Point.
- That the QPCU forthwith account to the Body Corporate for all moneys received by it in
respect of car parks let out by it on common property on the upper level Car Park under
an exclusive use basis procured in its favour.
- That the QPCU forthwith account to the Body Corporate for rental and compensation
for the ATM it has installed in the ground floor lobby in the amount of $12,580pa in the
first year increasing by 4%pa every year thereafter.
- That QPCU be required to execute a lease and be responsible for all electricity used as
well as proper maintenance and appearance of the ATM enclosure as well as all
reinstatement costs incurred if and when the ATM is removed.
Procedural matters
(1 Prior to determining the interim order applicant, an interim submission was received from the
Body Corporate Manager (BCM), Stewart Silver King and Burns (SSKB).
" North Point Brisbane [2011] QBCCMCmr 354
2 Initially the application was lodged as an application for the order of a referee under the Building Units and
Group Titles Act 1980. An adjudication application form was subsequently submitted.
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[10] After the interim order was made, the original applicant (Ballada Pty Ltd) was invited to advise
how it wished to proceed with the application, including providing any amendments or updated
information relating to the current status of the matter. The application was then amended.
[11] The Commissioner3 provided the amended application to the Body Corporate, with an invitation
to the Committee, BCM and all owners to make a submission. Subsequently the applicants
submitted additional information, and at the Commissioner’s request 4, distributed it all parties.
[12] Further additional information and changes to the outcomes sought were then submitted. It
was identified that the application then sought outcomes against QPCU, but QPCU had not
been specified as a respondent. Accordingly the Commissioner sought further clarification of
the application. The second respondent was added but there was then lengthy communication
regarding the basis for the application. On 21 March 2012 the Commissioner advised the
applicants that there remained a question as to whether the amended outcomes fell within the
jurisdiction of an adjudicator, and whether the information provided had adequately addressed
the requests for clarification5. However, the Commissioner decided to proceed to seek further
submissions on the amended application.
[13] Submissions were made by the Body Corporate, BCM and QPCU, and two other owners. The
applicants inspected and responded to the submissions received.6
[14] A dispute resolution recommendation7 was made referring the file to department adjudication.
[15] I then investigated the dispute8, which included reviewing the application and submissions.
Jurisdiction
[16] An adjudicator may make an order that is just and equitable in the circumstances 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 performance of
duties under the Act or the CMS.9 An order may require a person to act, or prohibit a person
from acting, in a way stated in the order. An adjudicator's order may contain ancillary and
consequential provisions the adjudicator considers necessary or appropriate. 10
[17] In deciding the interim order application I determined that the application fell within the
legislative dispute resolution provisions 11. However the parties and the outcomes sought have
since been substantially altered and so it is necessary to assess whether the amended
application also complies with the jurisdictional requirements of the Act.
[18] The purpose of the Act’s dispute resolution provisions is to resolve ‘disputes’. A person may
only bring an application if they are a party to or directly concerned with a dispute, and have
made reasonable attempts to resolve the dispute by internal dispute resolution. 12
[19] In regard to the outcomes sought against the Body Corporate, the first applicant clearly raised
its concerns regarding its missing vote with the Body Corporate. There is limited indication of
attempts to raise the remaining concerns about the EGM notice and motions with the Body
Corporate. However on balance I am satisfied there is sufficient evidence of a dispute to
proceed with this aspect of the application. It would not be in the interests of parties to defer
determination of the applicants’ concerns until further attempts at self-resolution are made.
3
Section 243 of the Act
4
Section 245 of the Act
5
Pursuant to section 240 of the Act
6
See sections 246 and 244 of the Act respectively
7
Section 248 of the Act
8
The investigative powers of an adjudicator are set out in section 271 of the Act
9
Section 276 of the Act
10
Section 284(1) of the Act
11
See sections 227, 228, 276 and Schedule 5 of the Act
12
Section 238 of the Act
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(19] After the interim order was made, the original applicant (Ballada Pty Ltd) was invited to advise
how it wished to proceed with the application, including providing any amendments or updated
information relating to the current status of the matter. The application was then amended.
111) The Commissioner® provided the amended application to the Body Corporate, with an invitation
to the Committee, BCM and all owners to make a submission. Subsequently the applicants
submitted additional information, and at the Commissioner's request’, distributed it all parties.
12] Further additional information and changes to the outcomes sought were then submitted. It
was identified that the application then sought outcomes against QPCU, but QPCU had not
been specified as a respondent. Accordingly the Commissioner sought further clarification of
the application. The second respondent was added but there was then lengthy communication
regarding the basis for the application. On 21 March 2012 the Commissioner advised the
applicants that there remained a question as to whether the amended outcomes fell within the
jurisdiction of an adjudicator, and whether the information provided had adequately addressed
the requests for clarification®. However, the Commissioner decided to proceed to seek further
submissions on the amended application.
(131 Submissions were made by the Body Corporate, BCM and QPCU, and two other owners. The
applicants inspected and responded to the submissions received.°
(14, A dispute resolution recommendation’ was made referring the file to department adjudication.
(15) | then investigated the dispute®, which included reviewing the application and submissions.
Jurisdiction
(16) An adjudicator may make an order that is just and equitable in the circumstances 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 performance of
duties under the Act or the CMS.° An order may require a person to act, or prohibit a person
from acting, in a way stated in the order. An adjudicator's order may contain ancillary and
consequential provisions the adjudicator considers necessary or appropriate. '°
17) In deciding the interim order application | determined that the application fell within the
legislative dispute resolution provisions"’. However the parties and the outcomes sought have
since been substantially altered and so it is necessary to assess whether the amended
application also complies with the jurisdictional requirements of the Act.
(18} The purpose of the Act’s dispute resolution provisions is to resolve ‘disputes’. A person may
only bring an application if they are a party to or directly concerned with a dispute, and have
made reasonable attempts to resolve the dispute by internal dispute resolution.
(19] IN regard to the outcomes sought against the Body Corporate, the first applicant clearly raised
its concerns regarding its missing vote with the Body Corporate. There is limited indication of
attempts to raise the remaining concerns about the EGM notice and motions with the Body
Corporate. However on balance | am satisfied there is sufficient evidence of a dispute to
proceed with this aspect of the application. It would not be in the interests of parties to defer
determination of the applicants’ concerns until further attempts at self-resolution are made.
Section 243 of the Act
Section 245 of the Act
° Pursuant to section 240 of the Act
See sections 246 and 244 of the Act respectively
Section 248 of the Act
® The investigative powers of an adjudicator are set out in section 271 of the Act
° Section 276 of the Act
"° Section 284(1) of the Act
3 See sections 227, 228, 276 and Schedule 5 of the Act
Section 238 of the Act
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[20] With respect to the outcomes sought against QPCU, I share the Commissioner’s concern that
there is little evidence of any genuine attempt by the applicants to directly resolve their
concerns with QPCU. The second applicant wrote to QPCU regarding the car park rental issue
in 2008 but there is no indication of any action since then. No evidence has been provided that
the applicants raised their other concerns with QPCU or the Body Corporate before lodging the
application, or taken the logical step of submitting any relevant motions to a general meeting.
[21] On balance however I consider it would be in the interests of both parties to proceed to
determine the questions raised by the applicants. They did at least write to QPCU alerting it to
their issues in early 2012 (albeit in a somewhat confusing manner), and it is not apparent that
delaying this matter for more communication is likely to address the applicants’ concerns.
Matters in dispute
[22] I will summarise the application and submissions regarding the outcomes sought against the
Body Corporate and against the QPCU separately.
[23] I must note that my summation of the issues, and indeed my determination of this application,
has been hindered by my difficulty in understanding much of the application. Despite repeated
attempts by the Commissioner to clarify the application and the basis of the outcomes sought, I
consider the application remains confusing and disjointed, with numerous unexplained and
unsubstantiated assertions. I anticipate this lack of clarity similarly hindered the respondents’
capacity to adequately respond to the application.
EGM issues
[24] Notice of the EGM on 12 July 2011 was send to owners dated 20 June 2011. The agenda
included eight motions: Motion 1 to accept the previous minutes; Motions 2-5 to rescind and
reissue the sinking fund budget and levy; Motion 6 was to engage a contractor to oversee the
air-conditioning project; Motion 7 to approve a quote for stage one of the air-conditioning
project; and Motion 8 to assign individual air conditioning systems to individual lot owners.
[25] The explanatory notes commented that the proposed air-conditioning works would be staged,
with stage one as per the attached quotes and each stage to be reviewed by the Committee in
the following financial year. It was also noted that the Body Corporate would fund the removal
of the outdated system and the installation of the new system, but that after each stage of
refurbishment the ongoing responsibility for the systems would transfer to individual lot owners.
[26] The EGM minutes record that each of the eight motions were passed with 41 votes in favour
and nil against. Motion 7 was a motion with alternatives and all 41 votes recorded were cast in
favour of Alternative 1. Motions 1, 3, 5, 6 and 7 were motions requiring an ordinary resolution.
Motions 2, 4 and 8 were listed as motions requiring a resolution without dissent.
[27] After the EGM, the Committee noted the air-conditioning motions were carried, and so the
agreement with the selected contractor would be reviewed by the Body Corporate’s solicitors
prior to work commencing. The Committee also noted one owner had reservations about the
project but had not attended the EGM and no voting paper had been received.
[28] The first applicant objected to the EGM outcome, alleging a failure to record its vote. It says :
a. Kildey asked the BCM for documentation regarding the EGM motions but was quoted
$250 per hour to provide it.
b. Kildey emailed the BCM on 6 July 2011 stating it would vote against the EGM motions
and “Please ensure that our NO VOTE is properly recorded.”
c. The BCM advised Kildey to forward his voting papers so his vote could be recorded.
d. Kildey personally posted voting papers to SSKB on 7 July 2011. A copy of the voting
paper dated 7 July and a page from a handwritten mail register which purports to record
voting papers being posted to SSKB on 7 July 2011 are provided.
e. The mail should have been received by the BCM no later than Monday 11 July 2011, in
time for the meeting on Tuesday 12 July.
f. The BCM said no voting paper was received so its vote was unable to be counted.
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{20} With respect to the outcomes sought against QPCU, | share the Commissioner's concern that
there is little evidence of any genuine attempt by the applicants to directly resolve their
concerns with QPCU. The second applicant wrote to QPCU regarding the car park rental issue
in 2008 but there is no indication of any action since then. No evidence has been provided that
the applicants raised their other concerns with QPCU or the Body Corporate before lodging the
application, or taken the logical step of submitting any relevant motions to a general meeting.
(21) On balance however | consider it would be in the interests of both parties to proceed to
determine the questions raised by the applicants. They did at least write to QPCU alerting it to
their issues in early 2012 (albeit in a somewhat confusing manner), and it is not apparent that
delaying this matter for more communication is likely to address the applicants’ concerns.
Matters in dispute
(22) | will summarise the application and submissions regarding the outcomes sought against the
Body Corporate and against the QPCU separately.
[23] | must note that my summation of the issues, and indeed my determination of this application,
has been hindered by my difficulty in understanding much of the application. Despite repeated
attempts by the Commissioner to clarify the application and the basis of the outcomes sought, |
consider the application remains confusing and disjointed, with numerous unexplained and
unsubstantiated assertions. | anticipate this lack of clarity similarly hindered the respondents’
capacity to adequately respond to the application.
EGM issues
(24), Notice of the EGM on 12 July 2011 was send to owners dated 20 June 2011. The agenda
included eight motions: Motion 1 to accept the previous minutes; Motions 2-5 to rescind and
reissue the sinking fund budget and levy; Motion 6 was to engage a contractor to oversee the
air-conditioning project; Motion 7 to approve a quote for stage one of the air-conditioning
project; and Motion 8 to assign individual air conditioning systems to individual lot owners.
(25) The explanatory notes commented that the proposed air-conditioning works would be staged,
with stage one as per the attached quotes and each stage to be reviewed by the Committee in
the following financial year. It was also noted that the Body Corporate would fund the removal
of the outdated system and the installation of the new system, but that after each stage of
refurbishment the ongoing responsibility for the systems would transfer to individual lot owners.
[28] The EGM minutes record that each of the eight motions were passed with 41 votes in favour
and nil against. Motion 7 was a motion with alternatives and all 41 votes recorded were cast in
favour of Alternative 1. Motions 1, 3, 5, 6 and 7 were motions requiring an ordinary resolution.
Motions 2, 4 and 8 were listed as motions requiring a resolution without dissent.
(27) After the EGM, the Committee noted the air-conditioning motions were carried, and so-the
agreement with the selected contractor would be reviewed by the Body Corporate’s solicitors
prior to work commencing. The Committee also noted one owner had reservations about the
project but had not attended the EGM and no voting paper had been received.
128] The first applicant objected to the EGM outcome, alleging a failure to record its vote. It says:
a. Kildey asked the BCM for documentation regarding the EGM motions but was quoted
$250 per hour to provide it.
b. Kildey emailed the BCM on 6 July 2011 stating it would vote against the EGM motions
and “Please ensure that our NO VOTE is properly recorded.”
c. The BCM advised Kildey to forward his voting papers so his vote could be recorded.
d. Kildey personally posted voting papers to SSKB on 7 July 2011. A copy of the voting
paper dated 7 July and a page from a handwritten mail register which purports to record
voting papers being posted to SSKB on 7 July 2011 are provided.
e. The mail should have been received by the BCM no later than Monday 11 July 2011, in
time for the meeting on Tuesday 12 July.
f. The BCM said no voting paper was received so its vote was unable to be counted.
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[29] The second respondent did not vote at the EGM. The application suggests he would have
voted against the motion had the EGM notice been clearer as to the terms of the motions.
[30] The applicants further claim that:
a. The Body Corporate does not maintain a mail box or notice board as required by
section 116 and 153 of the Commercial Module. There are no suitable alternative
arrangements for the receipt of mail.
b. The notice has various addresses and is confusing on where votes are to be returned.
c. There does not appear to be a system in place to record and acknowledge mail.
d. There is no provision for electronic voting.
e. The Ballada vote is claimed not to have been received despite strong evidence.
f. There is a question as to whether some EGM resolutions should have been expressed
as resolutions without dissent.
g. There is a question as to whether the EGM motions were misleading and confusing; a
fait accompli based on past decisions; inconsistent; inadequately explained in the
materials provided, such that they are invalid.
h. The voting paper was misleading and materially disadvantageous to owners.
i. Under section 117 of the Commercial Module, the Body Corporate cannot resolve to
transfer future property – that is property not yet in existence.
[31] The applicants therefore question whether the EGM notice and resolutions are valid.
[32] The submissions from the Body Corporate includes the following:
a. The grounds for asserting the EGM notice was invalid are unclear. The notice of the
EGM complies with section 37 of the Commercial Module.
b. Claims the notice was confusing about submitting voting papers are inconsistent with
Kildey’s conduct, including allegedly voting against the motions. In any event, the
notice clearly and repeatedly stated how to return the voting paper.
c. The applicants have failed to discharge their onus of proof regarding the questions to
be determined about the first applicant’s vote. The voting paper allegedly sent but
never received is of no effect and the EGM results should stand.
d. The grounds for asserting the EGM resolutions should be set aside are unclear. There
is no evidence that the motions were misleading. An ordinary person would not be
confused by the content of the motions or the explanatory material.
e. The applicants had ample opportunity over a long period to obtain information relevant
to the motions. They did not avail themselves of offers to discuss the project.
f. Motions 2 and 4 were listed as requiring a resolution without dissent but only required
an ordinary resolution as they revoked ordinary resolutions. Motion 8 also only required
an ordinary resolution as it disposed an asset under section 123 of the Commercial
Module. It would not be just and equitable to invalidate a resolution because it was
stated to require a resolution without dissent when an ordinary resolution was required.
g. Motions 2-5 were submitted by the Committee specifically to comply with section 98(3)
of the Commercial Module.
[33] The submission from QPCU supports the submission from the Body Corporate.
[34] The submissions from the BCM include the following:
a. While Kildey made his voting intention clear, a voting paper was required under section
53 of the Commercial Module (and Kildey was advised of this) but none was received.
b. All incoming mail to the BCM’s office is scanned and catalogued. No voting paper was
received by post, fax or email. They do not know what happened after it was entered
into Kildey’s mail register but it is not in the possession of the BCM or secretary.
c. It is not feasible for the BCM to check with every owner before a meeting regarding
their vote. Kildey did not contact the BCM to check his vote had been received.
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[23] The second respondent did not vote at the EGM. The application suggests he would have
voted against the motion had the EGM notice been clearer as to the terms of the motions.
(30) The applicants further claim that:
a. The Body Corporate does not maintain a mail box or notice board as required by
section 116 and 153 of the Commercial Module. There are no suitable alternative
arrangements for the receipt of mail.
The notice has various addresses and is confusing on where votes are to be returned.
There does not appear to be a system in place to record and acknowledge mail.
There is no provision for electronic voting.
The Ballada vote is claimed not to have been received despite strong evidence.
There is a question as to whether some EGM resolutions should have been expressed
as resolutions without dissent.
g. There is a question as to whether the EGM motions were misleading and confusing; a
fait accompli based on past decisions; inconsistent; inadequately explained in the
materials provided, such that they are invalid.
h. The voting paper was misleading and materially disadvantageous to owners.
i. Under section 117 of the Commercial Module, the Body Corporate cannot resolve to
transfer future property — that is property not yet in existence.
>~opaos
(31) The applicants therefore question whether the EGM notice and resolutions are valid.
(321. The submissions from the Body Corporate includes the following:
a. The grounds for asserting the EGM notice was invalid are unclear. The notice of the
EGM complies with section 37 of the Commercial Module.
b. Claims the notice was confusing about submitting voting papers are inconsistent with
Kildey’s conduct, including allegedly voting against the motions. In any event, the
notice clearly and repeatedly stated how to return the voting paper.
c. The applicants have failed to discharge their onus of proof regarding the questions to
be determined about the first applicant’s vote. The voting paper allegedly sent but
never received is of no effect and the EGM results should stand.
d. The grounds for asserting the EGM resolutions should be set aside are unclear. There
is no evidence that the motions were misleading. An ordinary person would not be
confused by the content of the motions or the explanatory material.
e. The applicants had ample opportunity over a long period to obtain information relevant
to the motions. They did not avail themselves of offers to discuss the project.
f. Motions 2 and 4 were listed as requiring a resolution without dissent but only required
an ordinary resolution as they revoked ordinary resolutions. Motion 8 also only required
an ordinary resolution as it disposed an asset under section 123 of the Commercial
Module. It would not be just and equitable to invalidate a resolution because it was
stated to require a resolution without dissent when an ordinary resolution was required.
g. Motions 2-5 were submitted by the Committee specifically to comply with section 98(3)
of the Commercial Module.
{33} The submission from QPCU supports the submission from the Body Corporate.
(341 The submissions from the BCM include the following:
a. While Kildey made his voting intention clear, a voting paper was required under section
53 of the Commercial Module (and Kildey was advised of this) but none was received.
b. All incoming mail to the BCMs office is scanned and catalogued. No voting paper was
received by post, fax or email. They do not know what happened after it was entered
into Kildey’s mail register but it is not in the possession of the BCM or secretary.
c. It is not feasible for the BCM to check with every owner before a meeting regarding
their vote. Kildey did not contact the BCM to check his vote had been received.
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d. Full quotations and specifications were about the air-conditioning system upgrade were
provided to owners with the EGM notice. The Committee had been discussing this
issue for about a year before the EGM and these discussions were minuted.
e. When Kildey requested further information prior to the EGM he was given a quote to
provide the records and for more detail of his request. He did not respond.
[35] The submission from the one lot owner supports the application. It argues:
a. Comments in the interim order decision are disputed. The applicant only needed to
demonstrate the voting paper was addressed with prepaid postage and sent. It is clear
this occurred. The Body Corporate should prove the voting paper was not received in
the ordinary course of post.
b. With ‘uncontradicted’ evidence of a no vote, Motion 2, 4 and 8 should be defeated.
c. Motions 2, 4 and 8 required a resolution without dissent as they have a significant
material impact on the rights of lot owners, including substantial increases to levies.
d. Given the importance of the motions and the requirement for them to be resolutions
without dissent, the Body Corporate was bound by the substance of the negative vote
which was communicated to it by email rather than the form for the vote.
e. The Body Corporate had a strict duty to obtain an independent engineer’s assessment
on the air-conditioning system before engaging any contractor. The replacement of the
system was not based on sound engineering principles. There was no attempt to
provide relevant information to lot owners. This is contrary to section 152 of the Act.
f. The full cost of the air-conditioning works is not known to owners.
g. The use of the sinking fund for utility infrastructure that solely benefits the majority lot
owner is contrary to the regulations. Sections 115(3), 120, 125(2) and 126(4) of the
Commercial Module oblige lot owners to pay for their own utility infrastructure.
[36] The applicants’ reply to submissions includes:
a. Each lot has an individual fan coil unit that has been maintained by each owner. They
are not Body Corporate assets. Lots are separately metered for after hours air-
conditioning. The central tower provides air to each unit and is a Body Corporate asset.
b. QPCU has replaced its fan coil units. The water cooling tower was not replaced.
c. A resolution which purports to use Body Corporate funds for non-Body Corporate
purposes is not valid regardless of the vote. The Body Corporate cannot use its funds
for the private financial benefit of QPCU.
QPCU issues
[37] QPCU owns 35 of the 76 lots in the scheme. It operates its credit union business from the
ground and first floors of the building, and owns several other lots in the scheme.
[38] The applicants seek orders against QPCU in regard to three issues: the air-conditioning
project; the rental of exclusive use car spaces; and the installation of an automatic teller
machine (ATM) on common property. The applicants wrote to QPCU on 20 February 2012
referring to the outcomes against QPCU in its amended application and that it believed there
was a dispute on those matters. The applicants claim QPCU did not respond.
[39] In regard to the air-conditioning project, the applicants claim QPCU had decided to refurbish its
premises, including installing new air-conditioning. Individual air-conditioning within lots has
been maintained by individual owners. However, the applicants claim QPCU decided the Body
Corporate should pay for its new air-conditioning and then transfer it free of charge. The
applicants assert there was no authorisation of the Body Corporate expenditure of $385,800
plus GST for QPCU’s new air-conditioning so the money should be repaid by QPCU.
[40] The applicants claim no information was given on the upgrade of the remainder of the building
or the cost of that work. Further, they say the Body Corporate has insufficient assets or
budgetary provision to meet the required expenditure for the EGM resolutions, which will make
North Point insolvent. Comments are made about the Committee meeting following the EGM.
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d. Full quotations and specifications were about the air-conditioning system upgrade were
provided to owners with the EGM notice. The Committee had been discussing this
issue for about a year before the EGM and these discussions were minuted.
e. When Kildey requested further information prior to the EGM he was given a quote to
provide the records and for more detail of his request. He did not respond.
[35] The submission from the one lot owner supports the application. It argues:
a. Comments in the interim order decision are disputed. The applicant only needed to
demonstrate the voting paper was addressed with prepaid postage and sent. It is clear
this occurred. The Body Corporate should prove the voting paper was not received in
the ordinary course of post.
b. With ‘uncontradicted’ evidence of a no vote, Motion 2, 4 and 8 should be defeated.
c. Motions 2, 4 and 8 required a resolution without dissent as they have a significant
material impact on the rights of lot owners, including substantial increases to levies.
d. Given the importance of the motions and the requirement for them to be resolutions
without dissent, the Body Corporate was bound by the substance of the negative vote
which was communicated to it by email rather than the form for the vote.
e. The Body Corporate had a strict duty to obtain an independent engineer’s assessment
on the air-conditioning system before engaging any contractor. The replacement of the
system was not based on sound engineering principles. There was no attempt to
provide relevant information to lot owners. This is contrary to section 152 of the Act.
f. The full cost of the air-conditioning works is not known to owners.
g. The use of the sinking fund for utility infrastructure that solely benefits the majority lot
owner is contrary to the regulations. Sections 115(3), 120, 125(2) and 126(4) of the
Commercial Module oblige lot owners to pay for their own utility infrastructure.
{36} The applicants’ reply to submissions includes:
a. Each lot has an individual fan coil unit that has been maintained by each owner. They
are not Body Corporate assets. Lots are separately metered for after hours air-
conditioning. The central tower provides air to each unit and is a Body Corporate asset.
b. QPCU has replaced its fan coil units. The water cooling tower was not replaced.
c. A resolution which purports to use Body Corporate funds for non-Body Corporate
purposes is not valid regardless of the vote. The Body Corporate cannot use its funds
for the private financial benefit of QPCU.
QPCU issues
(377 QPCU owns 35 of the 76 lots in the scheme. It operates its credit union business from the
ground and first floors of the building, and owns several other lots in the scheme.
133] The applicants seek orders against QPCU in regard to three issues: the air-conditioning
project; the rental of exclusive use car spaces; and the installation of an automatic teller
machine (ATM) on common property. The applicants wrote to QPCU on 20 February 2012
referring to the outcomes against QPCU in its amended application and that it believed there
was a dispute on those matters. The applicants claim QPCU did not respond.
139] In regard to the air-conditioning project, the applicants claim QPCU had decided to refurbish its
premises, including installing new air-conditioning. Individual air-conditioning within lots has
been maintained by individual owners. However, the applicants claim QPCU decided the Body
Corporate should pay for its new air-conditioning and then transfer it free of charge. The
applicants assert there was no authorisation of the Body Corporate expenditure of $385,800
plus GST for QPCU’s new air-conditioning so the money should be repaid by QPCU.
(40) The applicants claim no information was given on the upgrade of the remainder of the building
or the cost of that work. Further, they say the Body Corporate has insufficient assets or
budgetary provision to meet the required expenditure for the EGM resolutions, which will make
North Point insolvent. Comments are made about the Committee meeting following the EGM.
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[41] Minutes of the Annual General Meeting (AGM) of 19 April 2011 show Motion 14 unanimously
resolved to discontinue the current water cooling air-conditioning system and install an
individual system for each lot, with ownership of the individual systems to be transferred to
each lot owners. The motion selected the first of three alternative contractors for the work.
The minutes note that “The work will be conducted on the lower levels as the first measure as
these levels were draining the system the most and further levels will be reviewed as per the
staged works by the contractor.” Neither applicant voted in respect of the AGM.
[42] In regard to the rental of QPCU exclusive use car spaces, the application queries: whether
there was compliance with the legislation in respect of the purported transfer of exclusive use
of common property to QPCU, and whether QPCU is entitled to collect rent on the common
property transferred to it for exclusive use without a resolution to support that and without a
requirement to account to the Body Corporate for the money received. Reference is made to
section 117 of the Commercial Module. The applicants assert there is no resolution authorising
QPCU to rent out common property and the statutory requirements have not been met.
[43] In December 2008 the second respondent wrote to QPCU noting that QPCU let at least 18 car
spaces over some years at a rent totalling at least $4,800 a year. It stated that QPCU was
required to pay that rent to the Body Corporate. QPCU responded that it was allocated car
spaces under By-law 30 and there is no provision in the by-law requiring a payment.
[44] With respect to the ATM issue the applicants indicate the ATM was previously located on
QPCU property but has since been moved onto common property (possibly as part of the
refurbishment of the QPCU premises) without any ‘commercial offer’ to the Body Corporate. It
wants QPCU to enter into a lease regarding the ATM, and be responsible for electricity,
maintenance and reinstatement costs relating to the ATM.
[45] The submissions from the Body Corporate include the following:
a. The applicants have not established a dispute with QPCU as there was no internal
dispute resolution or conciliation attempted before seeking orders against QPCU. No
motions were submitted to the Body Corporate seeking to resolve the issues.
b. The Body Corporate has no dispute with the QPCU regarding the issues raised.
c. The application is generally misleading as it confuses QPCU with the Body Corporate.
d. Subject to any local authority requirements there is no restriction on an owner receiving
rent for the use of an exclusive use area allocated to that owner under By-law 30.
There are no conditions in By-law 30 to prohibit renting or require payments.
e. There is no evidence that the current contribution and interest schedule lot entitlements
for Lot 3 do not take into account the exclusive use car parks allocated to Lot 3. In any
event an adjudicator does not have jurisdiction to adjust lot entitlements. The
applicants can submit a motion to a general meeting to adjust the lot entitlements.
f. Section 117 of the Commercial Module is irrelevant because it regulates the manner in
which the body corporate can sell or lease common property, and not how an owner
can deal with common property allocated to them under an exclusive use by-law.
g. If the QPCU was improperly deriving rent from common property, a dispute on that
matter could only be pursued by the Body Corporate.
h. The building has a central cooling tower which provides ducted air-conditioning to all
lots. It was responsible for the cooling tower and associated infrastructure, as utility
infrastructure, with owners responsible for ducting and other infrastructure within the
boundaries of their lots including the individual air-conditioning unit that services only
their lot. It investigated alternatives to upgrade the defective and inefficient system and
resolved the best option was to replace the cooling tower with individual split systems.
i. The application infers the air-conditioning upgrade is solely for the benefit of QPCU.
The air-conditioning contractors recommended that stage one of the works commence
at level 1 as that level had the biggest footprint and was furthest from the cooling tower,
and so drew the biggest load from the system. Consequently, that approach would
lessen the load on the existing system while the refurbishment continued.
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(41) Minutes of the Annual General Meeting (AGM) of 19 April 2011 show Motion 14 unanimously
resolved to discontinue the current water cooling air-conditioning system and install an
individual system for each lot, with ownership of the individual systems to be transferred to
each lot owners. The motion selected the first of three alternative contractors for the work.
The minutes note that “The work wil be conducted on the lower levels as the first measure as
these levels were draining the system the most and further levels will be reviewed as per the
staged works by the contractor.” Neither applicant voted in respect of the AGM.
(42) In regard to the rental of QPCU exclusive use car spaces, the application queries: whether
there was compliance with the legislation in respect of the purported transfer of exclusive use
of common property to QPCU, and whether QPCU is entitled to collect rent on the common
property transferred to it for exclusive use without a resolution to support that and without a
requirement to account to the Body Corporate for the money received. Reference is made to
section 117 of the Commercial Module. The applicants assert there is no resolution authorising
QPCU to rent out common property and the statutory requirements have not been met.
143] In December 2008 the second respondent wrote to QPCU noting that QPCU let at least 18 car
spaces over some years at a rent totalling at least $4,800 a year. It stated that QPCU was
required to pay that rent to the Body Corporate. QPCU responded that it was allocated car
spaces under By-law 30 and there is no provision in the by-law requiring a payment.
(44) With respect to the ATM issue the applicants indicate the ATM was previously located on
QPCU property but has since been moved onto common property (possibly as part of the
refurbishment of the QPCU premises) without any ‘commercial offer’ to the Body Corporate. It
wants QPCU to enter into a lease regarding the ATM, and be responsible for electricity,
maintenance and reinstatement costs relating to the ATM.
(45) The submissions from the Body Corporate include the following:
a. The applicants have not established a dispute with QPCU as there was no internal
dispute resolution or conciliation attempted before seeking orders against QPCU. No
motions were submitted to the Body Corporate seeking to resolve the issues.
b. The Body Corporate has no dispute with the QPCU regarding the issues raised.
The application is generally misleading as it confuses QPCU with the Body Corporate.
d. Subject to any local authority requirements there is no restriction on an owner receiving
rent for the use of an exclusive use area allocated to that owner under By-law 30.
There are no conditions in By-law 30 to prohibit renting or require payments.
e. There is no evidence that the current contribution and interest schedule lot entitlements
for Lot 3 do not take into account the exclusive use car parks allocated to Lot 3. In-any
event an adjudicator does not have jurisdiction to adjust lot entitlements. The
applicants can submit a motion to a general meeting to adjust the lot entitlements:
f. Section 117 of the Commercial Module is irrelevant because it regulates the manner in
which the body corporate can sell or lease common property, and not how an owner
can deal with common property allocated to them under an exclusive use by-law.
g. If the QPCU was improperly deriving rent from common property, a dispute on that
matter could only be pursued by the Body Corporate.
h. The building has a central cooling tower which provides ducted air-conditioning to all
lots. It was responsible for the cooling tower and associated infrastructure, as utility
infrastructure, with owners responsible for ducting and other infrastructure within the
boundaries of their lots including the individual air-conditioning unit that services only
their lot. It investigated alternatives to upgrade the defective and inefficient system and
resolved the best option was to replace the cooling tower with individual split systems.
i. The application infers the air-conditioning upgrade is solely for the benefit of QPCU.
The air-conditioning contractors recommended that stage one of the works commence
at level 1 as that level had the biggest footprint and was furthest from the cooling tower,
and so drew the biggest load from the system. Consequently, that approach would
lessen the load on the existing system while the refurbishment continued.
oO
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j. There is no evidence that any of the resolutions will cause the Body Corporate to
become insolvent. The budgets approved by the Body Corporate have taken into
account the proposed cost of the air-conditioning works approved.
k. The Committee approved the installation of the ATM on 17 June 2011 pursuant to
section 120 of the Commercial Module.
l. Because of the amendments of the applicant, the respondent has been requested to
make submissions in response to this application on five occasions. The applicants’
further submissions are “…voluminous, repetitive, unsystematic, emotive, without
substance and misconceived”. The application should be dismissed and the maximum
costs awarded under section 270(4) of the Act.
[46] The submission from QPCU supports the submission from the Body Corporate.
[47] The submission from a lot owner expresses concern regarding the lack of discussion and
attempts to mediate this dispute, and the impacts on the scheme if the dispute is not resolved
quickly. Specifically the owner says:
a. He queries whether Body Corporate approval for the ATM was obtained and if so
whether compensation was paid for the loss of amenity. There is a further query as to
why the ATM was moved from its previous location.
b. Although not aesthetically pleasing, the ATM does offer a service and amenity to other
occupants and the public and is therefore a worthwhile addition.
c. He recommends communication between QPCU and minority owners who consider the
ATM service does not offset its location. It could propose monetary compensation.
d. The current air-conditioning system is outmoded, inefficient and costly. The Body
Corporate resolved some time ago to replace it from the sinking fund. The Body
Corporate apparently identified cost savings if the first stage of the air-conditioning
upgrade occurred at the same time as the QPCU refurbishment. The cost of that first
stage will deplete the sinking fund.
e. Some owners believe QPCU used its majority to access Body Corporate funds for its
own internal air-conditioning. Over time all lots will be upgraded to the new system,
although there is a concern QPCU might not commit to the remainder of the upgrade. It
may there is a need for better communication between QPCU, the Body Corporate and
minority owners, and for QPCU to commit to the remaining air-conditioning works.
f. The upper basement is allocated to QPCU but some spaces are leased to other
occupants. Some assert QPCU used its voting block to gain the benefit of this area of
common property. If QPCU has no more that the number of car spaces allocated to its
unit entitlement as other owners, it has not gained a financial advantage and should not
be required to pay rent for car spaces. The Body Corporate should engage an
independent valuer/assessor to audit the car spaces in the building based on total area
entitlement to determine if irregularities exist.
[48] The submission from another lot owner supports the application, and particularly the placement
of the ATM in the foyer without compensation.
[49] The applicants’ replies to submissions includes the following additional arguments:
a. The exclusive use by-law does not and was never intended to permit QPCU to collect
rent on car parks, and it does not have that effect by its terms.
b. The by-law does not comply with section 30(7) of the old Act. It does not and was not
intended to limit access across common property by lot owners or their invitees.
c. The claimed effect of the by-law is prohibited by section 177 of the Act, as it cannot give
rights to utility infrastructure that is common property or a body corporate asset.
d. Section 154 of the Act does not authorise QPCU to install an ATM on common property
without complying with section 117 of the Commercial Module. There has been no
resolution without dissent or special resolution regarding the ATM. There is no
provision within the CMS for a lease or license in regard to the ATM.
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j. There is no evidence that any of the resolutions will cause the Body Corporate to
become insolvent. The budgets approved by the Body Corporate have taken into
account the proposed cost of the air-conditioning works approved.
k. The Committee approved the installation of the ATM on 17 June 2011 pursuant to
section 120 of the Commercial Module.
|. Because of the amendments of the applicant, the respondent has been requested to
make submissions in response to this application on five occasions. The applicants’
further submissions are “...voluminous, repetitive, unsystematic, emotive, without
substance and misconceived”. The application should be dismissed and the maximum
costs awarded under section 270(4) of the Act.
[48] The submission from QPCU supports the submission from the Body Corporate.
(477 The submission from a lot owner expresses concern regarding the lack of discussion and
attempts to mediate this dispute, and the impacts on the scheme if the dispute is not resolved
quickly. Specifically the owner says:
a. He queries whether Body Corporate approval for the ATM was obtained and if so
whether compensation was paid for the loss of amenity. There is a further query as to
why the ATM was moved from its previous location.
b. Although not aesthetically pleasing, the ATM does offer a service and amenity to other
occupants and the public and is therefore a worthwhile addition.
c.. He recommends communication between QPCU and minority owners who consider the
ATM service does not offset its location. It could propose monetary compensation.
d. The current air-conditioning system is outmoded, inefficient and costly. The Body
Corporate resolved some time ago to replace it from the sinking fund. The Body
Corporate apparently identified cost savings if the first stage of the air-conditioning
upgrade occurred at the same time as the QPCU refurbishment. The cost of that first
stage will deplete the sinking fund.
e. Some owners believe QPCU used its majority to access Body Corporate funds for its
own internal air-conditioning. Over time all lots will be upgraded to the new system,
although there is a concern QPCU might not commit to the remainder of the upgrade. It
may there is a need for better communication between QPCU, the Body Corporate and
minority owners, and for QPCU to commit to the remaining air-conditioning works.
f. The upper basement is allocated to QPCU but some spaces are leased to other
occupants. Some assert QPCU used its voting block to gain the benefit of this area of
common property. If QPCU has no more that the number of car spaces allocated to its
unit entitlement as other owners, it has not gained a financial advantage and should not
be required to pay rent for car spaces. The Body Corporate should engage an
independent valuer/assessor to audit the car spaces in the building based on total area
entitlement to determine if irregularities exist.
[48] The submission from another lot owner supports the application, and particularly the placement
of the ATM in the foyer without compensation.
(49] The applicants’ replies to submissions includes the following additional arguments:
a. The exclusive use by-law does not and was never intended to permit QPCU to collect
rent on car parks, and it does not have that effect by its terms.
b. The by-law does not comply with section 30(7) of the old Act. It does not and was not
intended to limit access across common property by lot owners or their invitees.
c. The claimed effect of the by-law is prohibited by section 177 of the Act, as it cannot give
rights to utility infrastructure that is common property or a body corporate asset.
d. Section 154 of the Act does not authorise QPCU to install an ATM on common property
without complying with section 117 of the Commercial Module. There has been no
resolution without dissent or special resolution regarding the ATM. There is no
provision within the CMS for a lease or license in regard to the ATM.
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e. Even if there was a resolution, QPCU would need to provide ‘commercial terms’. Under
section 152 of the Act the Body Corporate must act in regard to common property in the
interests of all owners and not just the majority owner.
f. The new air-conditioning solely supplies QPCU’s Lot 3, is within the boundaries of Lots
3 and 4, and is not in the boundary structure. Therefore it is the lot owner’s
responsibility. QPCU has unlawfully utilised Body Corporate funds for it.
g. There has been no engineering report on the new air-conditioning and no life-cycle
costs on the existing system.
h. There was no audit of the air-conditioning expenditure, no detail of what assets have
been written off on replacement, and no comparison between the Body Corporate and
QPCU records regarding the air-conditioning.
Analysis
[50] I will consider first the EGM issues, including the purported vote from the first applicant; other
issues relating to the EGM notice and other issues relating to the EGM motions. I will then turn
to the three issues raised in respect of QPCU.
EGM issues
Vote from Ballada Pty Ltd
[51] The first issue is whether the first applicant’s vote should have been counted for the EGM.
[52] It is clear that Kildey expressed his intent to vote against the EGM motions. However that was
not a valid vote pursuant to section 53 of the Commercial Module. As noted in the reasons for
the interim order, it would have been contrary to the legislation for the Body Corporate to
purport to record a vote based on such an email. I cannot deem that to be a valid vote. The
applicant needed to vote personally at the meeting, or by proxy or by a valid voting paper.
[53] Electronic voting is only permitted if the Body Corporate has passed an ordinary resolution
providing for electronic voting. It is not apparent that this has occurred at North Point. Any
owner can submit a motion to a general meeting seeking agreement to electronic voting. But
unless and until this occurs, the question of electronic voting is immaterial to this dispute.
[54] Kildey says he submitted a voting paper for both lots on behalf of the Ballada Pty Ltd. Section
53(2)(b) of the Commercial Module places the obligation on the voter (the applicant in this
case) to ‘give’ its vote to the secretary before the start of the meeting.
[55] Section 39A of the Acts Interpretation Act 1954 provides that if an Act requires or permits a
document to be served on a person by post (and the section explicitly includes the term ‘give’
in this respect), service may be effected by properly addressing, prepaying and posting the
document as a letter. Service is taken to have been effected when which the document would
be delivered in the ordinary course of post, unless the contrary is proven. Service is always
taken to have been satisfied if the document was posted by certified mail provided by Australia
Post. As such, the vote can be taken to have been given to the secretary if it is properly sent
and should have been received in the ordinary course of post before the start of the meeting.
[56] In my reasons for the interim order I indicated the questions to be determined here were:
a. Did the applicant properly address, pay for and post a letter with the voting paper?
b. Would an ordinary letter mailed from that location to the secretary’s address have been
received by the Body Corporate in ‘ordinary course of post’ prior to the EGM?
c. Was the voting paper sent by certified mail?
d. Is there evidence the voting paper was not received within the ‘ordinary course of post’?
[57] I further stated that the applicant would bear the onus of providing evidence in respect of (a),
(b) and (c) above. If those could be demonstrated, the Body Corporate would bear the onus of
providing evidence in regard to (d) above. Despite being invited to do so, the applicants have
provided no further evidence in support of their claims.
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e. Even if there was a resolution, QPCU would need to provide ‘commercial terms’. Under
section 152 of the Act the Body Corporate must act in regard to common property in the
interests of all owners and not just the majority owner.
f. The new air-conditioning solely supplies QPCU’s Lot 3, is within the boundaries of Lots
3 and 4, and is not in the boundary structure. Therefore it is the lot owner's
responsibility. QPCU has unlawfully utilised Body Corporate funds for it.
g. There has been no engineering report on the new air-conditioning and no life-cycle
costs on the existing system.
h. There was no audit of the air-conditioning expenditure, no detail of what assets have
been written off on replacement, and no comparison between the Body Corporate and
QPCU records regarding the air-conditioning.
Analysis
50] | will consider first the EGM issues, including the purported vote from the first applicant; other
issues relating to the EGM notice and other issues relating to the EGM motions. | will then turn
to the three issues raised in respect of QPCU.
EGM issues
Vote from Ballada Pty Ltd
(51) The first issue. is whether the first applicant’s vote should have been counted for the EGM.
(52) It is clear that Kildey expressed his intent to vote against the EGM motions. However that was
not.a valid vote pursuant to section 53 of the Commercial Module. As noted in the reasons for
the interim order, it would have been contrary to the legislation for the Body Corporate to
purport to record a vote based on such an email. | cannot deem that to be a valid vote. The
applicant needed to vote personally at the meeting, or by proxy or by a valid voting paper.
(531 Electronic voting is only permitted if the Body Corporate has passed an ordinary resolution
providing for electronic voting. It is not apparent that this has occurred at North Point. Any
owner can submit a motion to a general meeting seeking agreement to electronic voting. But
unless and until this occurs, the question of electronic voting is immaterial to this dispute.
(54 Kildey says he submitted a voting paper for both lots on behalf of the Ballada Pty Ltd. Section
53(2)(b) of the Commercial Module places the obligation on the voter (the applicant in this
case) to ‘give’ its vote to the secretary before the start of the meeting.
(55) Section 39A of the Acts Interpretation Act 1954 provides that if an Act requires or permits a
document to be served on a person by post (and the section explicitly includes the term ‘give’
in this respect), service may be effected by properly addressing, prepaying and posting the
document as a letter. Service is taken to have been effected when which the document would
be delivered in the ordinary course of post, unless the contrary is proven. Service is always
taken to have been satisfied if the document was posted by certified mail provided by Australia
Post. As such, the vote can be taken to have been given to the secretary if it is properly sent
and should have been received in the ordinary course of post before the start of the meeting.
{58} IN my reasons for the interim order | indicated the questions to be determined here were:
a. Did the applicant properly address, pay for and post a letter with the voting paper?
b. Would an ordinary letter mailed from that location to the secretary's address have been
received by the Body Corporate in ‘ordinary course of post’ prior to the EGM?
c. Was the voting paper sent by certified mail?
d. Is there evidence the voting paper was not received within the ‘ordinary course of post’?
(57) | further stated that the applicant would bear the onus of providing evidence in respect of (a),
(b) and (c) above. If those could be demonstrated, the Body Corporate would bear the onus of
providing evidence in regard to (d) above. Despite being invited to do so, the applicants have
provided no further evidence in support of their claims.
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[58] The applicant has not stated where the voting paper was posted from, or the address it was
posted to, or the time of day it was posted. The photocopy of handwritten entry in the mail
register (albeit written in different handwriting to all other mail entries in the register) is
indicative. However it does not show the time, location or address. It does not demonstrate
that the voting paper was correctly addressed or paid for.
[59] The application comments on the numerous SSKB addresses but does indicate which the vote
was posted to. If it was posted during business hours on 7 July from a location within in
Brisbane to SSKB’s Brisbane address, it should have been delivered in one business day in
the ordinary course of post. However if it was posted after mail collection for the day wherever
it was posted, an additional day would need to be added.
[60] Given SSKB claim the voting paper was never received in its offices, even after the EGM, the
question may rather be one of whether the voting paper was properly posted to SSKB at all
rather than one of timeframe.
[61] Ultimately I am not satisfied that the applicants have discharged its onus of demonstrating that
the first applicant posted the voting paper, that the mail was correctly addressed (to any SSKB
address), that the mail was correctly stamped, and when and where the mail was posted.
Accordingly I am not satisfied that the applicants have demonstrated that a vote was given to
the secretary that should be counted.
[62] Even if I am incorrect in determining that Ballada’s voting paper was not required to be
counted, there is an issue whether the vote would have affected the EGM outcomes. This
gives rise to a question of the type of resolution required to pass each of the EGM motions.
Resolution types
[63] EGM Motions 1, 3, 5, 6 and 7 required an ordinary resolution, and the applicants have not
disputed this. Even if the Ballada votes were cast against these motions, these motions would
still have passed overwhelmingly. Accordingly, the inclusion of the Ballada votes could not
change the result. This includes the substantive motion approving the disputed works.
[64] Motions 2 and 4 were listed as requiring a resolution without dissent and so could have been
affected by Ballada’s vote. However, in the interim order I queried why they were resolutions
without dissent. The Body Corporate agrees Motions 2 and 4 should have been listed as
ordinary resolutions. These motions sought to rescind previous budget and levy motions which
had passed by ordinary resolution. A motion can be revoked by a motion of the same type 13.
As ordinary resolutions, the 41 votes cast in favour of Motions 2 and 4 would have been
sufficient to approve these motions even if the first applicant’s votes were cast against them.
[65] Motion 8, which provided for the Body Corporate to assign ownership of the new individual
systems to each lot, was also listed as requiring a resolution without dissent. The Body
Corporate has similarly argued that only an ordinary resolution was required for this motion.
While the Body Corporate has agreed to purchase the individual air-conditioning units in the
first instance, it submits that because it does not intend to incorporate them into the common
property (rather they will be installed within lots), they remain assets for the purpose of section
11 of the Act. It further argues that pursuant to section 123 of the Commercial Module, the
Body Corporate requires only an ordinary resolution to deal with a body corporate asset. By
contrast, the disposal of common property requires a resolution without dissent. The
applicants have not presented any argument against this position. I accept the Body
Corporate’s reasoning. Accordingly, the first applicant’s votes against Motion 8 would not have
been sufficient to defeat the motion.
[66] One submission argues these motions should have been resolutions without dissent because
of their significance. However the subjective or objective significance of an issue is not
relevant to determine the type of resolution required for a motion. This is not a discretionary
matter but rather determined solely by reference to the legislative provisions.
13
Section 62 of the Commercial Module
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{58} The applicant has not stated where the voting paper was posted from, or the address it was
posted to, or the time of day it was posted. The photocopy of handwritten entry in the mail
register (albeit written in different handwriting to all other mail entries in the register) is
indicative. However it does not show the time, location or address. It does not demonstrate
that the voting paper was correctly addressed or paid for.
(59) The application comments on the numerous SSKB addresses but does indicate which the vote
was posted to. If it was posted during business hours on 7 July from a location within in
Brisbane to SSKB’s Brisbane address, it should have been delivered in one business day in
the ordinary course of post. However if it was posted after mail collection for the day wherever
it was posted, an additional day would need to be added.
(60) Given SSKB claim the voting paper was never received in its offices, even after the EGM, the
question may rather be one of whether the voting paper was properly posted to SSKB at all
rather than one of timeframe.
(61) Ultimately | am not satisfied that the applicants have discharged its onus of demonstrating that
the first applicant posted the voting paper, that the mail was correctly addressed (to any SSKB
address), that the mail was correctly stamped, and when and where the mail was posted.
Accordingly | am not satisfied that the applicants have demonstrated that a vote was given to
the secretary that should be counted.
(623 Even if | am. incorrect in determining that Ballada’s voting paper was not required to be
counted, there is an issue whether the vote would have affected the EGM outcomes. This
gives rise to a question of the type of resolution required to pass each of the EGM motions.
Resolution types
(63] EGM Motions 1, 3, 5, 6 and 7 required an ordinary resolution, and the applicants have not
disputed this. Even if the Ballada votes were cast against these motions, these motions would
still have passed overwhelmingly. Accordingly, the inclusion of the Ballada votes could not
change the result. This includes the substantive motion approving the disputed works.
(641 Motions 2 and 4 were listed as requiring a resolution without dissent and so could have been
affected by Ballada’s vote. However, in the interim order | queried why they were resolutions
without dissent. The Body Corporate agrees Motions 2 and 4 should have been listed as
ordinary resolutions. These motions sought to rescind previous budget and levy motions which
had passed by ordinary resolution. A motion can be revoked by a motion of the same type”.
As ordinary resolutions, the 41 votes cast in favour of Motions 2 and 4 would have been
sufficient to approve these motions even if the first applicant’s votes were cast against them.
{65} Motion 8, which provided for the Body Corporate to assign ownership of the new individual
systems to each lot, was also listed as requiring a resolution without dissent. The Body
Corporate has similarly argued that only an ordinary resolution was required for this motion.
While the Body Corporate has agreed to purchase the individual air-conditioning units in the
first instance, it submits that because it does not intend to incorporate them into the common
property (rather they will be installed within lots), they remain assets for the purpose of section
11 of the Act. It further argues that pursuant to section 123 of the Commercial Module, the
Body Corporate requires only an ordinary resolution to deal with a body corporate asset. By
contrast, the disposal of common property requires a resolution without dissent. The
applicants have not presented any argument against this position. | accept the Body
Corporate’s reasoning. Accordingly, the first applicant's votes against Motion 8 would not have
been sufficient to defeat the motion.
{6s} One submission argues these motions should have been resolutions without dissent because
of their significance. However the subjective or objective significance of an issue is not
relevant to determine the type of resolution required for a motion. This is not a discretionary
matter but rather determined solely by reference to the legislative provisions.
"3 Section 62 of the Commercial Module
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[67] The applicants query the validity of the EGM notice because of the question over the resolution
types. The Body Corporate argues that while the voting paper was not strictly in compliance
with the legislative requirements for motion types 14, it would not be just and equitable to
invalidate the affected motions on that basis.
[68] The District Court15 considered the situation where a motion was listed as an ordinary
resolution but in fact required a special resolution, and sufficient votes were cast for the motion
to achieve a special resolution. In confirming the validity of the motion, the Court said:
“I accept that the voting paper was defective… In my view this was an irregularity of the
most technical nature in the context of the particular case. … There was, in my view, and
could not have been any disadvantage to any lot owner by the failure of the voting paper
to specify that the primary motion needed to be passed by special resolution.”
[69] I similarly conclude there can be no reason why any owner at North Point could have been
disadvantaged by the error in the agenda voting paper with regarding the motion type. In the
current circumstances there is even less potential for disadvantage as the required motion was
of a lower standard that the listed resolution type.
[70] Accordingly I accept that all motions on the EGM agenda required ordinary resolutions .
Further the EGM notice is not invalid because it incorrectly listed the motion type for some
motions. It follows then that the first applicant’s votes, even if improperly excluded, would not
have affected the outcome of the any of the EGM resolutions.
Adequacy of the meeting material
[71] The applicants indicate an objection to the EGM motions because of the lack of clarity of the
motion and adequacy of the information provided to owners in the motions and with the notice.
They allege it is confusing, inadequately explained, and misleading, such that it is invalid.
[72] In this regard the District Court has said16 that:
“There is certainly an obligation to give proper notice of what is actually to be considered
by the meeting, and to point out the relevant consequences of the approval of the
resolution. If there is a failure to give proper notice of the meeting, which may occur if the
notice of the proposed resolution is misleading as to what is really proposed, or its effect
and implications, then that may well impact on the validity of the resolution, because in
such circumstances there was either no valid notice of the meeting or no valid notice of
the proposed resolution.”
[73] However the Court in that matter then cited another case17 that said:
“The need to make full and fair disclosure must be tempered by the need to present a
document that is intelligible to reasonable members of the class to whom it is directed,
and is likely to assist rather than to confuse. … In the circumstances the court s hould not
be quick to conclude that a contravention … has occurred because other information
could have been provided that was not. The need for the applicants to establish the
materiality of errors and omissions is an important step in the proof of their claims.”
[74] The Court noted the onus was on the party making the objection to identify what was not
disclosed, and how that amounted to a failure to make full and fair disclosure 18. However, the
applicants have provided little by way of specifics as to how they claim the information provided
to owners was inadequate. Rather they have made broad but unsubstantiated claims.
14
Section 38(4)(b) of the Commercial Module
15
White DCJ in Stainlay and Tecelec (Qld) Pty Ltd v Body Corporate for No. 9 Port Douglas Road
Community Title Scheme 24368, Unreported, Appeal No. 177 of 2006 (1 December 2006) para 11
16
McGill DCJ in Body Corporate for Palm Springs Residences CTS 29467 v J Patterson Holdings Pty Ltd
[2008] QDC 300, para 50
17
Fraser v NRMA Holdings Ltd (1995) 55 FCR 452 cited in Body Corporate for Palm Springs Residences
(cited above), paras 61-62
18
McGill DCJ in Body Corporate for Palm Springs Residences (cited above), para 72
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(67) The applicants query the validity of the EGM notice because of the question over the resolution
types. The Body Corporate argues that while the voting paper was not strictly in compliance
with the legislative requirements for motion types", it would not be just and equitable to
invalidate the affected motions on that basis.
i683) The District Court'® considered the situation where a motion was listed as an ordinary
resolution but in fact required a special resolution, and sufficient votes were cast for the motion
to achieve a special resolution. In confirming the validity of the motion, the Court said:
‘| accept that the voting paper was defective... In my view this was an irregularity of the
most technical nature in the context of the particular case. ... There was, in my view, and
could not have been any disadvantage to any lot owner by the failure of the voting paper
to specify that the primary motion needed to be passed by special resolution.”
tes] | similarly conclude there can be no reason why any owner at North Point could have been
disadvantaged by the error in the agenda voting paper with regarding the motion type. In the
current circumstances there is even less potential for disadvantage as the required motion was
of a lower standard that the listed resolution type.
(79) Accordingly | accept that all motions on the EGM agenda required ordinary resolutions.
Further the EGM notice is not invalid because it incorrectly listed the motion type for some
motions. It follows then that the first applicant's votes, even if improperly excluded, would not
have affected the outcome of the any of the EGM resolutions.
Adequacy of the meeting material
(711. The applicants indicate an objection to the EGM motions because of the lack of clarity of the
motion and adequacy of the information provided to owners in the motions and with the notice.
They allege it is confusing, inadequately explained, and misleading, such that it is invalid.
172) In this regard the District Court has said’® that:
“There is certainly an obligation to give proper notice of what is actually to be considered
by the meeting, and to point out the relevant consequences of the approval of the
resolution. If there is a failure to give proper notice of the meeting, which may occur if the
notice of the proposed resolution is misleading as to what is really proposed, or its effect
and implications, then that may well impact on the validity of the resolution, because in
such circumstances there was either no valid notice of the meeting or no valid notice of
the proposed resolution.”
173) However the Court in that matter then cited another case” that said:
“The need to make full and fair disclosure must be tempered by the need to presenta
document that is intelligible to reasonable members of the class to whom it is directed,
and is likely to assist rather than to confuse. ... In the circumstances the court should-not
be quick to conclude that a contravention ... has occurred because other information
could have been provided that was not. The need for the applicants to establish the
materiality of errors and omissions is an important step in the proof of their claims.”
(741 The Court noted the onus was on the party making the objection to identify what was not
disclosed, and how that amounted to a failure to make full and fair disclosure '®. However, the
applicants have provided little by way of specifics as to how they claim the information provided
to owners was inadequate. Rather they have made broad but unsubstantiated claims.
"4 Section 38(4)(b) of the Commercial Module
° White DCJ in Stainlay and Tecelec (QId) Pty Ltd v Body Corporate for No. 9 Port Douglas Road
Community Title Scheme 24368, Unreported, Appeal No. 177 of 2006 (1 December 2006) para 11
"6 McGill DCJ in Body Corporate for Palm Springs Residences CTS 29467 v J Patterson Holdings Pty Ltd
[2008] QDC 300, para 50
’ Fraser v NRMA Holdings Ltd (1995) 55 FCR 452 cited in Body Corporate for Palm Springs Residences
(cited above), paras 61-62
*8 McGill DCJ in Body Corporate for Palm Springs Residences (cited above), para 72
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[75] The applicants have said the first applicant requested further information and was quoted $250
an hour to receive it. In this regard I note that a body corporate may only charge an owner the
prescribed fees outlined in section 161 of the Commercial Module to access records. If the
BCM has a contractual arrangement with the Body Corporate that entitles it to charge for
providing or facilitating access to records, those charges must be paid by the Body Corporate
(with whom the BCM has the contract) and not the lot owner. However, as the first applic ant
already indicated he would vote against the motions, the applicants have not demonstrated that
the difficulty in accessing that information would have affected the outcome of the motions.
[76] In a matter which looked at the question of allegedly misleading material, Dorney QC, as His
Honour then was, said19, tribunal member, said-
“... it is not sufficient merely to find that the “misleading” information, in the absence of
any other contradictory material … was persuasive in favour of an affirmative vote. What
needs to be considered is whether there was some breach of the relevant provisions
such that, for instance, the Adjudicator was empowered to make an order under section
276, including one mentioned in Schedule 5, of the BCCM Act. Justice and equity do not
work in a vacuum. Items 7 and 8 of Schedule 5 permit an adjudicator to order either that
a general meeting of the body corporate is void for irregularity or that a resolution
purportedly passed at a general meeting of the body corporate was, at all times, void.
And those Items, in turn, need to depend upon some breach of the BCCM Act. So, for
instance, was section 94(2) breached by the body corporate not acting reasonably in
making the decision in passing Motion 2 in the circumstances of such “misleading”
information being provided in the Notice of Meeting?
[77] There is no evidence of a deliberate attempt by the Committee to mislead. Aside from a brief
reference to the second respondent’s confusion, the applicants have not shown that any owner
was actually misled by the motions or that any vote would have changed if owners had been
better informed. Even if the second respondent had voted against the motions with more
information, that vote would not have changed the outcome of any of the resolutions. There is
no evidence or argument of a specific legislative breach. The fact that the applicants may have
misunderstood the motions, does not mean the motions were procedurally defective.
[78] On their face, the motions and the supporting information appear relatively straightforward. In
the absence of any more detail, I am unclear how or why the applicants consider them
confusing or misleading. I am not satisfied there is sufficient basis to invalidate the motions.
Other EGM notice issues
[79] The applicants note a range of other issues relating to the validity of the EGM notice.
[80] First, they say the Body Corporate does not maintain a mail box. Section 116 of the
Commercial Module requires the Body Corporate to either maintain a mailbox or make suitable
alternative arrangements for the receipt of mail. The applicants suggest the Body Corporate
does not have suitable alternative arrangements, but does not explain why.
[81] It is apparent that SSKB receives mail for the Body Corporate. Aside from the non-receipt of
the voting paper allegedly sent by the first applicant, there is no indication that there has been
any general problem in the receipt of the Body Corporate’s mail. The SSKB letterhead shows
numerous addresses for the different offices but I do not see how this inherently presents a
problem. I have been given no evidence that SSKB is not receiving the Body Corporate’s mail.
[82] The applicants assert there is no system in place to record and acknowledge mail. SSKB have
said it scans and catalogues all incoming mail. The applicants have not refuted this. While a
body corporate has an obligation to retain records, including incoming correspondence 20, it
does not have a legislative obligation to log or acknowledge incoming mail. While it may well
be desirable, it would be an onerous and unrealistic requirement to impose on all bodies
corporate, including those that do not engage a BCM. It is likely that in fact North Point has a
better standard of tracking incoming correspondence than most bodies corporate.
19
Batwing Resorts Pty Ltd v Body Corporate for Liberty CTS 27241 [2008] CCT KA004-08, para 66
20
Section 159 of the Commercial Module
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[75]
176]
[77]
178]
[79]
180]
(81]
[82]
The applicants have said the first applicant requested further information and was quoted $250
an hour to receive it. In this regard | note that a body corporate may only charge an owner the
prescribed fees outlined in section 161 of the Commercial Module to access records. If the
BCM has a contractual arrangement with the Body Corporate that entitles it to charge for
providing or facilitating access to records, those charges must be paid by the Body Corporate
(with whom the BCM has the contract) and not the lot owner. However, as the first applic ant
already indicated he would vote against the motions, the applicants have not demonstrated that
the difficulty in accessing that information would have affected the outcome of the motions.
In a matter which looked at the question of allegedly misleading material, Dorney QC, as His
Honour then was, said’®, tribunal member, said-
“.. it is not sufficient merely to find that the “misleading” information, in the absence of
any other contradictory material ... was persuasive in favour of an affirmative vote. What
needs to be considered is whether there was some breach of the relevant provisions
such that, for instance, the Adjudicator was empowered to make an order under section
276, including one mentioned in Schedule 5, of the BCCM Act. Justice and equity do not
work in a vacuum. Items 7 and 8 of Schedule 5 permit an adjudicator to order either that
a general meeting of the body corporate is void for irregularity or that a resolution
purportedly passed at a general meeting of the body corporate was, at all times, void.
And those Items, in turn, need to depend upon some breach of the BCCM Act. So, for
instance, was section 94(2) breached by the body corporate not acting reasonably in
making the decision in passing Motion 2 in the circumstances of such “misleading”
information being provided in the Notice of Meeting?
There is no evidence of a deliberate attempt by the Committee to mislead. Aside from a brief
reference to the second respondent’s confusion, the applicants have not shown that any owner
was actually misled by the motions or that any vote would have changed if owners had been
better informed. Even if the second respondent had voted against the motions with more
information, that vote would not have changed the outcome of any of the resolutions. There is
no evidence or argument of a specific legislative breach. The fact that the applicants may have
misunderstood the motions, does not mean the motions were procedurally defective.
On their face, the motions and the supporting information appear relatively straightforward. In
the absence of any more detail, | am unclear how or why the applicants consider them
confusing or misleading. | am not satisfied there is sufficient basis to invalidate the motions.
Other EGM notice issues
The applicants note a range of other issues relating to the validity of the EGM notice.
First, they say the Body Corporate does not maintain a mail box. Section 116 of the
Commercial Module requires the Body Corporate to either maintain a mailbox or make suitable
alternative arrangements for the receipt of mail. The applicants suggest the Body Corporate
does not have suitable alternative arrangements, but does not explain why.
It is apparent that SSKB receives mail for the Body Corporate. Aside from the non-receipt of
the voting paper allegedly sent by the first applicant, there is no indication that there has been
any general problem in the receipt of the Body Corporate’s mail. The SSKB letterhead shows
numerous addresses for the different offices but | do not see how this inherently presents a
problem. | have been given no evidence that SSKB is not receiving the Body Corporate’s mail.
The applicants assert there is no system in place to record and acknowledge mail. SSKB have
said it scans and catalogues all incoming mail. The applicants have not refuted this. While a
body corporate has an obligation to retain records, including incoming correspondence”, it
does not have a legislative obligation to log or acknowledge incoming mail. While it may well
be desirable, it would be an onerous and unrealistic requirement to impose on all bodies
corporate, including those that do not engage a BCM. It is likely that in fact North Point has a
better standard of tracking incoming correspondence than most bodies corporate.
"© Batwing Resorts Pty Ltd v Body Corporate for Liberty CTS 27241 [2008] CCT KA004-08, para 66
20 . :
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[83] The applicants note the Body Corporate does not have a noticeboard. There is no legislative
requirement for a body corporate to maintain a noticeboard. If a body corporate does have a
noticeboard, notices of committee meetings should be posted on the noticeboard 21 however
there is no similar provision regarding general meetings. The existence or otherwise of a
noticeboard at North Point is irrelevant to the validity of notice of the EGM.
[84] Finally, while they do not suggest that they were confused as to where to send their own votes,
the applicants claim the EGM notice was misleading as to where to send voting papers. This is
not explained and I am at a lost to understand where any confusion could arise. The voting
instructions clearly direct owners to send their votes to the secretary care of SSKB, via mail,
fax or in person. While the covering page for the notice package included multiple SSKB this is
simply letterhead. The EGM agenda and the voting paper provide only one address and one
facsimile number. The instructions are eminently clear.
Validity of the EGM motions
[85] It is apparent that the original air-conditioning system, including the cooling tower and the pipes
connecting to the system to lots, is utility infrastructure providing a utility service. The definition
of ‘utility infrastructure’ includes “…cables, wires, pipes, sewers, drains, ducts, plant and
equipment by which lots or common property are supplied with utility services.” A ‘utility
service’ includes (in part) water supply, air conditioning, drainage or another system or service
designed to improve the amenity or enhance the enjoyment of lots or common property. 22
[86] Section 20 of the Act provides that all utility infrastructure contained within the scheme is
common property, except in specified circumstances. In general terms section 115(1) of the
Commercial Module requires a body corporate to maintain common property. Section
115(3)(b) obligates a lot owner to maintain utility infrastructure (including where on common
property) where it only supplies a utility service to the owner’s lot. Additionally, section 126(4)
of the Commercial Module specifies that “The owner of a lot … must maintain the utility
infrastructure within the boundaries of the lot, and not part of common property, in good
condition and, if it is in need of replacement, must replace it.”
[87] Because the cooling tower and pipes are on common property and service multiple lots, they
are a Body Corporate responsibility. For as long as the original air-conditioning system exists
(that is, until it is entirely decommissioned and removed) the Body Corporate must maintain it.
The proper maintenance of the system includes an obligation to upgrade or replace with an
equivalent alternative if that is appropriate.
[88] The applicants comment that there was no engineering report on the air-conditioning system
and no life-cycle costs. However through Motion 6, the Body Corporate has engaged
consulting engineers to oversee the project. The applicants have not specifically asserted that
the upgrade to the Body Corporate’s infrastructure was not required or should have been
undertaken in some different manner. Therefore, there is simply insufficient evidence to
determine that the Body Corporate’s decision to upgrade was unreasonable.
[89] While the individual air-conditioning units in each lot are the responsibility of the lot owner, they
are joined to the cooling tower system. The Body Corporate has decided that the cooling tower
system is no longer effective and should be decommissioned. It has decided the best course
of action is to replace that system with just individual units in each lot without a central system.
The air-conditioner units currently in each lot would not function without the cooling tower and
so must be replaced to enable the cooling tower to be decommissioned. Because of the
current integration to the main system, the replacement of the air-conditioners cannot occur on
a lot by lot basis. The proposed approach was a staged one, starting with level one and two.
As the replacement of the air-conditioning units in each lot is caused by the decommissioning
of the whole building system, it is a necessary part of the replacement of that system. I agree
that it is appropriately funded by the Body Corporate.
21
Section 20 of the Commercial Module
22
As defined in the Dictionary in Schedule 6 of the Act
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{83} The applicants note the Body Corporate does not have a noticeboard. There is no legislative
requirement for a body corporate to maintain a noticeboard. If a body corporate does have a
noticeboard, notices of committee meetings should be posted on the noticeboard*' however
there is no similar provision regarding general meetings. The existence or otherwise of a
noticeboard at North Point is irrelevant to the validity of notice of the EGM.
(84) Finally, while they do not suggest that they were confused as to where to send their own votes,
the applicants claim the EGM notice was misleading as to where to send voting papers. This is
not explained and | am at a lost to understand where any confusion could arise. The voting
instructions clearly direct owners to send their votes to the secretary care of SSKB, via mail,
fax or in person. While the covering page for the notice package included multiple SSKB this is
simply letterhead. The EGM agenda and the voting paper provide only one address and one
facsimile number. The instructions are eminently clear.
Validity of the EGM motions
(85) It is apparent that the original air-conditioning system, including the cooling tower and the pipes
connecting to the system to lots, is utility infrastructure providing a utility service. The definition
of ‘utility infrastructure’ includes “...cables, wires, pipes, sewers, drains, ducts, plant and
equipment by which lots or common property are supplied with utility services.” A ‘utility
service’ includes (in part) water supply, air conditioning, drainage or another system or service
designed to improve the amenity or enhance the enjoyment of lots or common property.”
{86} Section 20 of the Act provides that all utility infrastructure contained within the scheme is
common property, except in specified circumstances. In general terms section 115(1) of the
Commercial Module requires a body corporate to maintain common property. Section
115(3)(b) obligates a lot owner to maintain utility infrastructure (including where on common
property) where it only supplies a utility service to the owner's lot. Additionally, section 126(4)
of the Commercial Module specifies that “The owner of a lot ... must maintain the utility
infrastructure wthin the boundaries of the lot, and not part of common property, in good
condition and, if it is in need of replacement, must replace it.”
(871) Because the cooling tower and pipes are on common property and service multiple lots, they
are a Body Corporate responsibility. For as long as the original air-conditioning system exists
(that is, until it is entirely decommissioned and removed) the Body Corporate must maintain it.
The proper maintenance of the system includes an obligation to upgrade or replace with an
equivalent alternative if that is appropriate.
(88) The applicants comment that there was no engineering report on the air-conditioning system
and no life-cycle costs. However through Motion 6, the Body Corporate has engaged
consulting engineers to oversee the project. The applicants have not specifically asserted that
the upgrade to the Body Corporate’s infrastructure was not required or should have been
undertaken in some different manner. Therefore, there is simply insufficient evidence to
determine that the Body Corporate’s decision to upgrade was unreasonable.
(89] While the individual air-conditioning units in each lot are the responsibility of the lot owner, they
are joined to the cooling tower system. The Body Corporate has decided that the cooling tower
system is no longer effective and should be decommissioned. It has decided the best course
of action is to replace that system with just individual units in each lot without a central system.
The air-conditioner units currently in each lot would not function without the cooling tower and
so must be replaced to enable the cooling tower to be decommissioned. Because of the
current integration to the main system, the replacement of the air-conditioners cannot occur on
a lot by lot basis. The proposed approach was a staged one, starting with level one and two.
As the replacement of the air-conditioning units in each lot is caused by the decommissioning
of the whole building system, it is a necessary part of the replacement of that system. | agree
that it is appropriately funded by the Body Corporate.
2" Section 20 of the Commercial Module
2 As defined in the Dictionary in Schedule 6 of the Act
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[90] The applicants have not demonstrated that the air-conditioning upgrade will only occur to the
ground and first floor. Of course those are the levels that are commencing first, and the
explanation for that appears on its face to be entirely reasonable and has not been refuted by
the applicants. Presumably the water cooling tower can not be decommissioned until all lots
have been upgraded to air-conditioners that are not linked to the cooling tower. Therefore the
long term savings to the Body Corporate from decommissioning the cooling tower will not be
achieved until the upgrade is complete.
[91] It certainly may have been preferable if all stages of the upgrade project had been scoped and
costed before a decision was made to approve stage one of the work. However I have not
been presented with sufficient evidence that it was unreasonable of the Body Corporate to
proceed with stage one without that context.
[92] If the Body Corporate fails to proceed with the remainder of the air-conditioning upgrade within
a reasonable time, or fails to pass a motion submitted by either the Committee or an owner to
proceed with the remainder of the upgrade, any concerned owner could challenge the Body
Corporate as unreasonable or failing to properly maintain common property infrastructure. On
its face it would certainly seem unreasonable if the Body Corporate were not to complete the
air-conditioning upgrade to the remainder of the building within the foreseeable future.
[93] Various comments are made by the applicants regarding the budgetary impact of the air-
conditioning upgrade. However resolutions at the EGM adjusted the budgets and contributions
to allow for the costs of the project. The applicants have not given any detail that there are
insufficient funds for stage one of the project. There seems no reason why future stages of the
air-conditioning project cannot be funded from the sinking fund accumulated in the intervening
time or from a special levy if the sinking fund is inadequate.
[94] Comments are also made regarding the auditing of expenditure on the air-conditioning project,
writing off of assets, and record keeping. These appear to be questions regarding the
implementation of the EGM motions rather than the validity of the motions themselves. These
issues can only have arisen since the application was lodged and there is no indication that the
applicants have sought clarification on these questions from the Body Corporate. Accordingly
they are beyond the scope of this application to consider.
[95] A further objection mentioned is that the motions (presumably Motion 8 specifically) are
contrary to section 117 of the Commercial Module because the Body Corporate cannot resolve
to transfer property not yet in existence. I do not accept this argument. First, the air-
conditioning units that have or will be purchased for the purposes of the upgrade will not be
installed or otherwise incorporated into common property and so while they remain in the
ownership of the Body Corporate they are assets rather than common property23. Therefore
section 117 is not applicable. Section 123 of the Commercial Module deals with the disposal of
a body corporate asset. However I see no reason at all why the Body Corporate could not
pass a valid resolution deciding how to deal with an asset it has resolved to purchase in future.
Air-conditioning costs issue
[96] The applicants want QPCU to reimburse the Body Corporate for the air-conditioning project.
They claim there was no authorisation to spend Body Corporate funds for the new air-
conditioning which has, in the first instance, benefited QPCU. This is clearly incorrect.
[97] The air-conditioning upgrade was authorised by both the 2011 AGM and EGM. As outlined, I
have found no basis to determine that the EGM notice or resolution should be invalidated.
Therefore the expenditure by the Body Corporate was properly authorised and there is no
basis for it to be paid by QPCU.
Car park issue
[98] The next question is whether QPCU is obliged to pay the Body Corporate any income earned
from renting out its exclusive use car spaces.
23
Section 11 of the Act
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(99) The applicants have not demonstrated that the air-conditioning upgrade will only occur to the
ground and first floor. Of course those are the levels that are commencing first, and the
explanation for that appears on its face to be entirely reasonable and has not been refuted by
the applicants. Presumably the water cooling tower can not be decommissioned until all lots
have been upgraded to air-conditioners that are not linked to the cooling tower. Therefore the
long term savings to the Body Corporate from decommissioning the cooling tower will not be
achieved until the upgrade is complete.
(91) It certainly may have been preferable if all stages of the upgrade project had been scoped and
costed before a decision was made to approve stage one of the work. However | have not
been presented with sufficient evidence that it was unreasonable of the Body Corporate to
proceed with stage one without that context.
(92) If the Body Corporate fails to proceed with the remainder of the air-conditioning upgrade within
a reasonable time, or fails to pass a motion submitted by either the Committee or an owner to
proceed with the remainder of the upgrade, any concerned owner could challenge the Body
Corporate as unreasonable or failing to properly maintain common property infrastructure. On
its face it would certainly seem unreasonable if the Body Corporate were not to complete the
air-conditioning upgrade to the remainder of the building within the foreseeable future.
193] Various comments are made by the applicants regarding the budgetary impact of the air-
conditioning upgrade. However resolutions at the EGM adjusted the budgets and contributions
to allow for the costs of the project. The applicants have not given any detail that there are
insufficient funds for stage one of the project. There seems no reason why future stages of the
air-conditioning project cannot be funded from the sinking fund accumulated in the intervening
time or from a special levy if the sinking fund is inadequate.
(94 Comments are also made regarding the auditing of expenditure on the air-conditioning project,
writing off of assets, and record keeping. These appear to be questions regarding the
implementation of the EGM motions rather than the validity of the motions themselves. These
issues can only have arisen since the application was lodged and there is no indication that the
applicants have sought clarification on these questions from the Body Corporate. Accordingly
they are beyond the scope of this application to consider.
(95) A further objection mentioned is that the motions (presumably Motion 8 specifically) are
contrary to section 117 of the Commercial Module because the Body Corporate cannot resolve
to transfer property not yet in existence. | do not accept this argument. First, the air-
conditioning units that have or will be purchased for the purposes of the upgrade will not be
installed or otherwise incorporated into common property and so while they remain in the
ownership of the Body Corporate they are assets rather than common property”. Therefore
section 117 is not applicable. Section 123 of the Commercial Module deals with the disposal-of
a body corporate asset. However | see no reason at all why the Body Corporate could-not
pass a valid resolution deciding how to deal with an asset it has resolved to purchase in future.
Air-conditioning costs issue
(96) The applicants want QPCU to reimburse the Body Corporate for the air-conditioning project.
They claim there was no authorisation to spend Body Corporate funds for the new air-
conditioning which has, in the first instance, benefited QPCU. This is clearly incorrect.
(97) The air-conditioning upgrade was authorised by both the 2011 AGM and EGM. As outlined, |
have found no basis to determine that the EGM notice or resolution should be invalidated.
Therefore the expenditure by the Body Corporate was properly authorised and there is no
basis for it to be paid by QPCU.
Car park issue
198] The next question is whether QPCU is obliged to pay the Body Corporate any income earned
from renting out its exclusive use car spaces.
3 Section 11 of the Act
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Grant of exclusive use
[99] Sections 170-177 of the Act provide for exclusive use by-laws. A body corporate is entitled to
grant exclusive use of (or other special rights about) common property to a lot owner through
an exclusive use by-law recorded in the CMS. Exclusive use necessarily involves the right to
use the allocated area of common property to the exclusion of all other owners and occupiers.
Pursuant to section 129 of the Commercial Module, an exclusive use by-law can impose
conditions, including conditions regarding payments to the body corporate or lot owners.
[100] Providing a grant is appropriately approved in a general meeting, there is no restriction on how
and to whom a body corporate can choose to allocate common property for exclusive use. A
body corporate is not required, for example, to equally distribute allocations amongst owners
based on their lot ownership, lot entitlements or any other basis.
[101] At North Point, the allocation of area of common property for the purpose of exclusive use car
parking is outlined in By-law 30. The current CMS was recorded in May 2005 but this by-law
appears to have remained unchanged since the CMS recorded in May 2002. Moreover,
exclusive use car parking allocations have existed since March 1987. Some 21 of QPCU’s 35
lots have been allocated exclusive use areas for car parking and storage. The most significant
allocation is to Lot 3 which has been allocated large areas of one of the car park levels. Titles
records show those areas were allocated to Lot 3 since at least as early as 1994.
[102] The applicants appear to query the validity of the grant of exclusive use. However that is a
question that could only be the subject of an order sought against the Body Corporate, who
passed the resolutions to grant exclusive use. These allocations have existed for some time
without apparent objection, and the applicants do not outline a clear legal objection to the
original Body Corporate decisions. Therefore there is no basis for me to further investigate that
issue. Moreover, on its face I see no reason why the allocation of exclusive use of common
property to QPCU and other lot owners for the purpose of car parking is not entirely valid.
[103] The applicants suggest the by-law is prohibited by section 177 of the Act, but that section only
prohibits exclusive use over utility infrastructure. A car space is not utility infrastructure 24. The
applicants also suggest By-law 30 does not comply with the legislation in place when exclusive
use was first granted. I do not understand the applicant’s argument but see no reason why By-
law 30 does not comply with the requirements under the previous and current legislation.
[104] Comments are also made that the allocation of exclusive use of this scale should result in an
adjustment to lot entitlements. The allocations have clearly existed for a considerable time and
it is not evident that they are not actually reflected in the current lot entitlements. However,
even if they are not, I have no jurisdiction under the Act to evaluate or adjust the lot
entitlements. The applicants are at liberty to submit a motion to a general meeting for an
adjustment to the lot entitlements if they consider that the current lot entitlements schedule
does not comply with the legislative requirements in that regard. 25
Income from an exclusive use area
[105] The applicants believe QPCU is not entitled to rent or earn income from its exclusive use area
without the specific approval of the Body Corporate or an express provision in the by-law. I do
not agree. The applicants have not identified to any legislative provision that imposes such a
restriction on exclusive use rights and to my knowledge there is no such restriction.
[106] Section 35(3) of the Act provides that an owner’s interest in a lot is inseparable from their
interest in the common property, and the examples note that an owner cannot deal with or
dispose of their interest in common property. However this section is referring to an owner’s
interest in the entire common property of the scheme as a tenant in common, rather than the
rights granted under the exclusive use by-law. An exclusive use by-law grants a statutory right
rather than a common law interest in land.26
24
Note the definitions of ‘utility infrastructure’ and ‘utility service’ in Schedule 6 of the Act.
25
Section 46 to 51C of the Act
26
Independent Finance Group Pty Ltd v Mytan Pty Ltd & Anor [2001] QCA 306
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Grant of exclusive use
19] Sections 170-177 of the Act provide for exclusive use by-laws. A body corporate is entitled to
grant exclusive use of (or other special rights about) common property to a lot owner through
an exclusive use by-law recorded in the CMS. Exclusive use necessarily involves the right to
use the allocated area of common property to the exclusion of all other owners and occupiers.
Pursuant to section 129 of the Commercial Module, an exclusive use by-law can impose
conditions, including conditions regarding payments to the body corporate or lot owners.
(109) Providing a grant is appropriately approved in a general meeting, there is no restriction on how
and to whom a body corporate can choose to allocate common property for exclusive use. A
body corporate is not required, for example, to equally distribute allocations amongst owners
based on their lot ownership, lot entitlements or any other basis.
t1o1) At North Point, the allocation of area of common property for the purpose of exclusive use car
parking is outlined in By-law 30. The current CMS was recorded in May 2005 but this by-law
appears to have remained unchanged since the CMS recorded in May 2002. Moreover,
exclusive use car parking allocations have existed since March 1987. Some 21 of QPCU's 35
lots have been allocated exclusive use areas for car parking and storage. The most significant
allocation is to Lot 3 which has been allocated large areas of one of the car park levels. Titles
records show those areas were allocated to Lot 3 since at least as early as 1994.
{102} The applicants appear to query the validity of the grant of exclusive use. However that is a
question that could only be the subject of an order sought against the Body Corporate, who
passed the resolutions to grant exclusive use. These allocations have existed for some time
without apparent objection, and the applicants do not outline a clear legal objection to the
original Body Corporate decisions. Therefore there is no basis for me to further investigate that
issue. Moreover, on its face | see no reason why the allocation of exclusive use of common
property to QPCU and other lot owners for the purpose of car parking is not entirely valid.
(103) The applicants suggest the by-law is prohibited by section 177 of the Act, but that section only
prohibits exclusive use over utility infrastructure. A car space is not utility infrastructure”. The
applicants also suggest By-law 30 does not comply with the legislation in place when exclusive
use was first granted. | do not understand the applicant's argument but see no reason why By-
law 30 does not comply with the requirements under the previous and current legislation.
{104) Comments are also made that the allocation of exclusive use of this scale should result in an
adjustment to lot entitlements. The allocations have clearly existed for a considerable time and
it is not evident that they are not actually reflected in the current lot entitlements. However,
even if they are not, | have no jurisdiction under the Act to evaluate or adjust the lot
entitlements. The applicants are at liberty to submit a motion to a general meeting for-an
adjustment to the lot entitlements if they consider that the current lot entitlements schedule
does not comply with the legislative requirements in that regard.”°
Income from an exclusive use area
(105) The applicants believe QPCU is not entitled to rent or earn income from its exclusive use area
without the specific approval of the Body Corporate or an express provision in the by-law. | do
not agree. The applicants have not identified to any legislative provision that imposes such a
restriction on exclusive use rights and to my knowledge there is no such restriction.
(106) Section 35(3) of the Act provides that an owner's interest in a lot is inseparable from their
interest in the common property, and the examples note that an owner cannot deal with or
dispose of their interest in common property. However this section is referring to an owner's
interest in the entire common property of the scheme as a tenant in common, rather than the
rights granted under the exclusive use by-law. An exclusive use by-law grants a statutory right
rather than a common law interest in land.”°
4 Note the definitions of ‘utility infrastructure’ and ‘utility service’ in Schedule 6 of the Act.
5 Section 46 to 51C of the Act
26 Independent Finance Group Pty Ltd v Mytan Pty Ltd & Anor [2001] QCA 306
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[107] Reference is made by the applicants to section 117 of the Commercial Module which provides
for the leasing and licensing common property. However this section only applies to how the
body corporate may deal with common property and is not applicable to a lot owner or occupier
dealing with their exclusive use area.
[108] The rights under an exclusive use by-law attach to the lot and benefit the occupier of the lot for
the time being. Under section 180(4) of the Act an owner cannot be prevented from leasing or
otherwise dealing with their lot, and arguably this extends to the rights that attach to the lot.
[109] An exclusive use by-law could potentially include a restriction on the leasing of the exclusive
use areas (providing there was reasonable justification for those restrictions 27). However there
are no such conditions in By-law 30. Moreover By-law 30 specifically provides that an
exclusive use car park area is for the use of the lot owner and occupier “for themselves and
their licensees”. This appears to specifically permit the use of the car spaces by third parties
under a lease or licence. In my view then, QPCU is free to use and enjoy its allocated areas of
common property for its benefit, subject only to any limitations in the legislation (for example, in
making improvements).
[110] There are similarly no legislative provisions that automatically oblige a lot owner or occupier to
give the body corporate any income generated from their exclusive use area or otherwise
account for that income. While such an obligation could be included as a condition in the by-
law, clearly there is no such condition in By-law 30 and no requirement for its inclusion.
[111] In my view the applicants have misconceived the application of the legislation in this regard.
ATM issue
[112] The applicants have raised concerns that QPCU has installed an ATM in the foyer on common
property without any resolution or accounting to the Body Corporate. The applicants make
reference to converting common property to exclusive use and rental income without
‘accounting’ to the Body Corporate.
[113] Pursuant to section 120 of the Commercial Module, a body corporate is entitled to authorise a
lot owner to make an improvement to common property for the benefit of that owner’s lot. The
body corporate is permitted to impose conditions on that approval that it considers appropriate,
but is not legally obliged to do so. Unless it is a restricted issue for the Committee28, the
Committee is entitled to make decisions under section 120 of the Commercial Module.
[114] The Body Corporate says it approved the installation of the ATM on common property. A
resolution passed outside a committee meeting on 17 June 2011 records the approval of the
relocation of the ATM at the expense of QPSU. The record of the resolution does not indicate
that the Body Corporate imposed any conditions on the consent, such as the payment of rent
or maintenance or reinstatement obligations.
[115] If the applicants believe the Committee was not entitled to pass a resolution approving the
installation of the ATM, or that the grant of approval without the imposition of conditions was
unreasonable, their dispute is properly with the Body Corporate rather than QPCU. But the
applicants have not sought an order against the Body Corporate on this issue, whether to
dispute the approval given for the installation or for any other reason.
[116] If the Body Corporate had resolved to grant a lease or license over the area of common
property to QPCU a resolution without dissent would have been required for a term of more
than 10 years and otherwise a special resolution would be required. The applicants have not
presented specific evidence to support a claim that the installation of the ATM amounts to a
disposition of common property that requires a lease or license, rather than simply being an
improvement to common property under section 120 of the Commercial Module. There may
be some conjecture on that point29. However that question could only be considered in the
context of an application seeking orders against the Body Corporate on that point.
27
Pursuant to section 94(2) of the Act a body corporate must act reasonably in regard to its functions.
28
Section 18 of the Commercial Module
29
See Katsik alis v Body Corporate for “The Centre” [2009]QCA 77
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(107) Reference is made by the applicants to section 117 of the Commercial Module which provides
for the leasing and licensing common property. However this section only applies to how the
body corporate may deal with common property and is not applicable to a lot owner or occupier
dealing with their exclusive use area.
(108) The rights under an exclusive use by-law attach to the lot and benefit the occupier of the lot for
the time being. Under section 180(4) of the Act an owner cannot be prevented from leasing or
otherwise dealing with their lot, and arguably this extends to the rights that attach to the lot.
(1091 An exclusive use by-law could potentially include a restriction on the ions”) of the exclusive
use areas (providing there was reasonable justification for those restrictions”’). However there
are no such conditions in By-law 30. Moreover By-law 30 specifically wks that an
exclusive use car park area is for the use of the lot owner and occupier “for themselves and
their licensees”. This appears to specifically permit the use of the car spaces by third parties
under a lease or licence. In my view then, QPCU is free to use and enjoy its allocated areas of
common property for its benefit, subject only to any limitations in the legislation (for example, in
making improvements).
(119) There are similarly no legislative provisions that automatically oblige a lot owner or occupier to
give the body corporate any income generated from their exclusive use area or otherwise
account for that income. While such an obligation could be included as a condition in the by-
law, clearly there is no such condition in By-law 30 and no requirement for its inclusion.
(111) In my view the applicants have misconceived the application of the legislation in this regard.
ATM issue
112] The applicants have raised concerns that QPCU has installed an ATM in the foyer on common
property without any resolution or accounting to the Body Corporate. The applicants make
reference to converting common property to exclusive use and rental income without
‘accounting’ to the Body Corporate.
(113] Pursuant to section 120 of the Commercial Module, a body corporate is entitled to authorise a
lot owner to make an improvement to common property for the benefit of that owner’s lot. The
body corporate is permitted to impose conditions on that approval that it considers appropriate,
but is not legally obliged to do so. Unless it is a restricted issue for the Committee”, the
Committee is entitled to make decisions under section 120 of the Commercial Module.
(1141 The Body Corporate says it approved the installation of the ATM on common property. A
resolution passed outside a committee meeting on 17 June 2011 records the approval of the
relocation of the ATM at the expense of QPSU. The record of the resolution does not indicate
that the Body Corporate imposed any conditions on the consent, such as the payment of rent
or maintenance or reinstatement obligations.
(115) If the applicants believe the Committee was not entitled to pass a resolution approving the
installation of the ATM, or that the grant of approval without the imposition of conditions was
unreasonable, their dispute is properly with the Body Corporate rather than QPCU. But the
applicants have not sought an order against the Body Corporate on this issue, whether to
dispute the approval given for the installation or for any other reason.
(116) If the Body Corporate had resolved to grant a lease or license over the area of common
property to QPCU a resolution without dissent would have been required for a term of more
than 10 years and otherwise a special resolution would be required. The applicants have not
presented specific evidence to support a claim that the installation of the ATM amounts to a
disposition of common property that requires a lease or license, rather than simply being an
improvement to common property under section 120 of the Commercial Module. There may
be some conjecture on that point”®. However that question could only be considered in the
context of an application seeking orders against the Body Corporate on that point.
7 Pursuant to section 94(2) of the Act a body corporate must act reasonably in regard to its functions.
® Section 18 of the Commercial Module
° See Katsikalis v Body Corporate for “The Centre” [2009]QCA 77
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[117] The applicants have entirely failed to provide any reasonably coherent level of information on
the background or the nature of the outcome sought against QPCU. Having received Body
Corporate approval, QPCU was entirely within its rights to act on the basis of that approval and
relocate the ATM. I see no reason why QPCU should be required to pay rent or other
compensation to the Body Corporate in those circumstances.
Other issues
[118] Various comments in the applicant and submissions allude to QPCU’s status, voting power and
obligations as a ‘majority’ owner. In this regard I note that with 35 of 76 lots in the scheme,
QPCU does not own a majority of lots. Therefore while QPCU certainly has considerable
voting power, if most other lot owners chose to vote they could defeat the QPCU position.
[119] Furthermore, regardless of how many lots it owns, QPCU is entitled to vote in its own interest,
just as any other lot owner can. While it may well be desirable for QPCU to have regard to
broader interests in the scheme, it is not legally obliged to act or vote in the best interests of
other lot owners, just as those lot owners are not obliged to vote in QPCU’s interests.
[120] However the Body Corporate must act reasonably in making a decision 30. Therefore if a
general meeting vote will result in an objectively unreasonable outcome having regard to the
interests of all owners and occupiers, that can be challenged and if appropriate overturned.
Similarly, if the Committee (whether influenced by QPCU or otherwise) reaches a decision that
is objectively unreasonable, it could be challenged. However the onus would be on the person
objecting to a decision to demonstrate that the decision was unreasonable.
Costs
[121] Under section 270(1)(c) of the Act an adjudicator may dismiss an application if satisfied it is
frivolous, vexatious, misconceived or without substance. If an application is dismissed on that
basis, section 270(3) empowers an adjudicator to award costs of up to $2,000 by the
respondent in defending the application. In awarding costs against an applicant, the
adjudicator may have regard to previous applications made by an applicant.
[122] The Body Corporate has asked that this application be dismissed with the maximum costs.
[123] I acknowledge the respondents’ concern that application was poorly presented and argued.
The respondents have been put to the expense of reviewing and responding to the application
and multiple amendments, despite little real basis having been presented for most of the issues
raised. I have found little substantiation or merit in the application. For that reason I have very
seriously considered an award of costs against the applicants.
[124] However, while this application is certainly of a character which could fall within the scope of an
application that is misconceived and without substance, I have decided not to dismiss it on that
basis. I have had regard to the fact that this is the first application by the applicants. Moreover,
they appear to have proceeded on a genuine, albeit ultimately misguided, belief in their claims.
Therefore on this occasion I have decided not to award costs.
[125] However I alert the applicants to the fact that my findings on this application can be considered
by an adjudicator determining whether any future application should be dismissed under
270(1)(c). The applicants should carefully consider the legal basis and substantiation of any
future application. Applications will be dismissed, and costs awarded, if they submit baseless
or unreasonably burdensome applications in future.
Conclusion
[126] While the applicants clearly hold very strong views on the issues they raise, unfortunately they
have provided little cogent argument or genuine evidence in support of those views. I am
simply not satisfied that they have demonstrated that the Body Corporate or QPCU have
breached the Act or the Commercial Module in respect of any of the issues raised, or that the
Body Corporate has acted unreasonably. In fact I believe the applicants have misapprehended
the legislation in many respects. For the reasons outlined, I have dismissed the application.
30
Section 94(2) and 100(5) of the Act
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(117) The applicants have entirely failed to provide any reasonably coherent level of information on
the background or the nature of the outcome sought against QPCU. Having received Body
Corporate approval, QPCU was entirely within its rights to act on the basis of that approval and
relocate the ATM. | see no reason why QPCU should be required to pay rent or other
compensation to the Body Corporate in those circumstances.
Other issues
(118) Various comments in the applicant and submissions allude to QPCU’s status, voting power and
obligations as a ‘majority’ owner. In this regard | note that with 35 of 76 lots in the scheme,
QPCU does not own a majority of lots. Therefore while QPCU certainly has considerable
voting power, if most other lot owners chose to vote they could defeat the QPCU position.
(119) Furthermore, regardless of how many lots it owns, QPCU is entitled to vote in its own interest,
just as any other lot owner can. While it may well be desirable for QPCU to have regard to
broader interests in the scheme, it is not legally obliged to act or vote in the best interests of
other lot owners, just as those lot owners are not obliged to vote in QPCU’s interests.
1120} However the Body Corporate must act reasonably in making a decision®®. Therefore if a
general meeting vote will result in an objectively unreasonable outcome having regard to the
interests of all owners and occupiers, that can be challenged and if appropriate overturned.
Similarly, if the Committee (whether influenced by QPCU or otherwise) reaches a decision that
is objectively unreasonable, it could be challenged. However the onus would be on the person
objecting to a decision to demonstrate that the decision was unreasonable.
Costs
t121) Under section 270(1)(c) of the Act an adjudicator may dismiss an application if satisfied it is
frivolous, vexatious, misconceived or without substance. If an application is dismissed on that
basis, section 270(3) empowers an adjudicator to award costs of up to $2,000 by the
respondent in defending the application. In awarding costs against an applicant, the
adjudicator may have regard to previous applications made by an applicant.
{122} The Body Corporate has asked that this application be dismissed with the maximum costs.
(123 | acknowledge the respondents’ concern that application was poorly presented and argued.
The respondents have been put to the expense of reviewing and responding to the application
and multiple amendments, despite little real basis having been presented for most of the issues
raised. | have found little substantiation or merit in the application. For that reason | have very
seriously considered an award of costs against the applicants.
(124) However, while this application is certainly of a character which could fall within the scope of an
application that is misconceived and without substance, | have decided not to dismiss it on that
basis. | have had regard to the fact that this is the first application by the applicants. Moreover,
they appear to have proceeded on a genuine, albeit ultimately misguided, belief in their claims.
Therefore on this occasion | have decided not to award costs.
(125) However | alert the applicants to the fact that my findings on this application can be considered
by an adjudicator determining whether any future application should be dismissed under
270(1)(c). The applicants should carefully consider the legal basis and substantiation of any
future application. Applications will be dismissed, and costs awarded, if they submit baseless
or unreasonably burdensome applications in future.
Conclusion
(126) While the applicants clearly hold very strong views on the issues they raise, unfortunately they
have provided little cogent argument or genuine evidence in support of those views. | am
simply not satisfied that they have demonstrated that the Body Corporate or QPCU have
breached the Act or the Commercial Module in respect of any of the issues raised, or that the
Body Corporate has acted unreasonably. In fact | believe the applicants have misapprehended
the legislation in many respects. For the reasons outlined, | have dismissed the application.
°° Section 94(2) and 100(5) of the Act
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