20181085-ASC11 - North Point Brisbane [2012] QBCCMCmr 355

5KIPGFD[#WUV.++

         [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


                                                       Page 13 of 16
4GVTKGXGFHTQO#WUV.++QP/CTEJCV                                                          8GTKH[XGTUKQP


[OCR of page images]
Signed by AustLll

(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

Page 13 of 16
Retrieved from AustLII on 30 March 2020 at 16:27:59 Verify version