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Exclusive Use Area at Somerset Gardens – Legal Opinion of Peter Hunt

The o

11 July 2018

Somerset Gardens CTS 25221 c/- Body Corporate Services PO Box 444
BROADBEACH QLD 4218

By email: michelle.gabriel@bcssm.com.au Cc: deanscharkie@icloud.com.au

Dear Sirs/Madams

Exclusive use – Fencing issues

We refer to the Committee’s instructions of 7 July 2018 to advise on issues with fencing of exclusive use areas at the scheme.

Legislation

We understand that the Scheme is governed by the:

 Body Corporate and Community Management Act 1997 (‘Act’); and

 Body Corporate and Community Management (Accommodation Module) Regulation 2008 (‘Regulation’).

We have reviewed the community management statement registered on 11 July 2017 with the dealing number 718146715 (‘CMS’) in preparation of this advice. We have undertaken a CTS search which confirms that this is the current CMS for the Scheme.

Background

We are instructed that:

  1. the occupation of common property by a majority of owners is not consistent with the exclusive use in the CMS;
  2. this occupation includes fencing;
  3. the occupation has existed in these locations for many years; and
  4. no previous resolution without dissent altering the exclusive use allocations in the CMS has been passed.

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Please advise if any of the above is incorrect as it may affect our advice.

Options

In our opinion, the Body Corporate’s options are as follows:

  1. do nothing and allow the situation to continue indefinitely;
  2. submit a motion to a general meeting to amend the exclusive use allocations and plans recorded in Schedule E of the CMS; or
  3. issue relevant owners with a BCCM Form 10 – notice of continuing contravention of a body corporate by-law (‘contravention notice’) and file applications in the Commissioner’s Office against owners who fail to comply.

We comment on these options as follows.

1. Do nothing and allow the situation to continue indefinitely

If the Body Corporate takes no action the current situation will continue indefinitely. We do not recommend this option as:

  1. under s.94(1)(b) of the Act the Body Corporate has an obligation to enforce the by- laws contained within the CMS;
  2. the occupation of areas of common property is likely to amount to an obstruction, particularly in circumstances where fencing has been installed, in contravention of the current by-law 5; and
  3. we are concerned that if owners continue to occupy areas outside their exclusive use area, without the appropriate authorisation, the Body Corporate may be liable for injury or damage claims in relation to any incidents that occur in these areas.

2. Submit a motion to the general meeting agenda to rectify the issue

The Committee may submit a motion to a general meeting to amend the exclusive use plans and allocations recorded in Schedule E of the CMS. Such a motion would need:

  1. to pass by a resolution without dissent;
  2. the written consent of all owners that have exclusive use (if they did not vote on the motion).

If the Committee wishes to proceed with this option it will need to:

  1. retain a surveyor to properly identify the areas being occupied on new exclusive use plans;
  2. propose a motion at a general meeting to alter the exclusive use allocations in accordance with the plans prepared by the surveyor.

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2 of 5 Liability limited by a scheme under professional standards legislation

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We estimate that our costs to draft this motion and accompanying explanatory note will be about $400 plus gst; and

c. hold a general meeting to consider the motion.

If the motion passes, the Body Corporate will need to prepare a new community management statement to include the new survey plans.

Our costs for preparing and lodging a new community management statement with new exclusive use plans is likely to be about $800 – 1,000 plus gst and outays/filing fees. However, we note that the Body Corporate will incur no extra costs for the preparation of the new CMS if this issue and the proposed new by-laws are both passed at the same general meeting.

In our experience, it is almost impossible to achieve an agreement with all owners in relation to amending exclusive use at a general meeting. Therefore, we recommend that the Committee establish that all owners are happy with the proposed amendments of exclusive use prior to the general meeting agenda being sent out.

In our opinion, it is very important that the exclusive use areas attaching to the lots are rectified so that the owners are able to clearly establish their lot’s entitlements, which may result in an increase in value to the lots.

If the Committee would like to proceed with this option, we recommend that we be instructed to draft a letter to all owners advising them of the issue and of the Body Corporate’s attempts to rectify the situation. We estimate that our costs to draft this circular will be about $400 plus gst.

What happens if the motion does not pass?

Item 10 of Schedule 5 of the Act allows an Adjudicator to make an order giving effect to a proposed motion (or variation of that motion) which failed to pass by resolution without dissent if they are satisfied that the opposition in the circumstances was unreasonable.

Accordingly, if any owner votes against the motion to amend the exclusive use areas, an application needs to be filed in the Commissioner’s Office alleging that the opposition to the motion was unreasonable (assuming that there is a basis for that allegation). The adjudication application fee is currently $81.95.

Once an application is filed, the Body Corporate and owners would be given an opportunity to respond. We can draft a response on behalf of the Body Corporate setting out the history of the exclusive use issues at the Scheme and the reason for the Committee’s motion.

These applications generally take about 4-8 months and the Adjudicator will either decide that:

  •   a new CMS will need to be registered including the new survey plans, as the Adjudicator is satisfied that the opposition to the motion was unreasonable; or
  •   the Committee will need to explore an alternative solution, as the Adjudicator is satisfied that the owners opposed the motion on reasonable grounds.We cannot provide a meaningful estimate for our costs for the application, however, as a very rough guess, our costs may be $4,000 – $6,000 plus gst.

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3 of 5 Liability limited by a scheme under professional standards legislation

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3. Contravention notice

The Committee may decide to seek to have owners cease occupying common property outside the exclusive use areas.

This will require the Committee to:

a. pass a resolution to issue a contravention notice in respect of each lot currently in breach of by-law 5;

b. respond to resulting queries and complaints from owners;

c. lodge conciliation applications against owners who fail to comply with the contravention notices; and

d. lodge adjudication applications against owners if the matter is not resolved at conciliation. Please note that the only options the Committee can agree to at the conciliations are:

  1. the owner ceasing to occupy the common property; and
  2. the Body Corporate putting the matter on hold for a specified period of time while the owner seeks a resolution without dissent to be granted exclusive use of the area in question.

Due to the large number of lots that this issue currently affects, the Committee should:

  1. file a conciliation application and subsequently an adjudication application against one lot;
  2. advise the other relevant lots of the outcome of the first case; and
  3. pursue the other lots (through conciliation and adjudication) that fail to comply after being advised of the outcome of the outcome of the first case.

We do not recommend this option, except as an absolute last resort, as:

  1. it will create enormous disharmony within the Scheme; and
  2. the Body Corporate will incur significant legal costs that are not recoverable from the relevant owners.

Costs
We estimate that our costs will be about $800 plus gst to:

  1. draft a generic contravention notice and accompanying attachment that the Committee can amend for each relevant lot; and
  2. draft the Committee motion to issue the contravention notices.

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4 of 5 Liability limited by a scheme under professional standards legislation

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We estimate that our costs to draft the conciliation application, and subsequent adjudication application, for the first lot will be about $2,500 plus gst. Our costs for subsequent applications will be significantly less.

Instructions sought

Please advise how the Committee would like to proceed. Please contact Hayley Gath with any queries.
Yours sincerely,

Peter Hunt
Director
MATHEWS HUNT LEGAL

pinion is in the Body Corporate Records of Somerset Gardens

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Legal Opinion on Actions of Committee not adhering the the Act

Committee’s don’t (and can’t) ‘do’ anything, without passing a resolution.

‘I reject your reality and substitute my own’ Adam Savage, MythBusters. Whenever I am asked this question, that quote comes to mind. 

Committee’s don’t (and can’t) ‘do’ anything, without passing a resolution. That is the sole function of a committee, to make decisions on behalf of the Body Corporate. 

A committee decision, once properly made and if it is within the committee’s (legal) competence to make, is a decision of the body corporate. ‘Informal’ decisions of a committee have no force at law – they are either a valid, properly made decision… or they are not. 

Committees who ‘accept’ a quote without a VOC or a meeting, are doing so by email, phone calls or even over a cup of tea in an unit are not acting within legislation.

The extra effort involved in sending a VOC is effectively zero, except in very large community titles schemes. In those larger schemes, decisions should be ‘batched’ to be dealt with at the quarterly committee meeting or, in urgent circumstances, the next VOC. 

It’s critical to remember that committees are not a law unto themselves and that the formal requirements of a meeting or a VOC exist for good reason. 

For example, completion of the mandated processes help show the world (including adjudicators) that the committee has deliberately, and intentionally, made a decision, and exactly what that decision is. 

Committee decision making involves notice being given to lot owners, including so that they can either be involved, or challenge the committee’s decision, including if necessary, before it is implemented. 

A committee who acts on an informal decision, is rejecting the reality of the legislation and substituting their own…

Michael Kleinschmidt
Stratum Legal
E: info@stratumlegal.com.au
P: 07 5406 1282

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By Laws Changed in 2020 without Legal Advice

This was different to attempts to change in 2018 where legal advice was sought,

Changes to the By-Laws and registration of a new CMs was listed as item 12 on the Agenda of the 2020 AGM by the committee of 5 votes to 0 at the committee meeting on the 19th August 2020

The committee at the meeting on the 19th August 2020 was Lynne Smith , Garry Fox, Ora Whaanga (holding proxy for Sara Brown). John Wurth appoint at the meeting to fill the Chairperson to fill casual vacancy from resignation of Leigh Moana

It is fair to say that  John Wurth had no significant role as he was only appointed at the committee meeting that made the decision, but holds some responsibility as he did not abstain from voting, and the motion was passed 5 in agreement.

When previously considering change to by-laws, at the committee meeting on the 15th  August 2018, legal advice was sought

At the committee meeting of the 15th November 2018 that committee resolved

The committee elected 2019 AGM was:Jacqui Kerr (chair), Leigh Moana (secretary), Lynne Smith (Treasurer) , Shane Brett and Garry Fox

At the committee met 20th January 2020 and no motion with regard By-Laws

At the next committee meeting on the 11th March 2019 the minutes reflect

At the committee on the 6th May 2020, Jacqui Kerr resigned, Leigh Moana resigned as secretary appointed chair, Sara Brown appointed to replace Jacqui Kerr and Shane Brett  resigned, and Ora Whaanag appointed  to replace Shane Brett  

At the meeting on 6th May 2020 an item in General Business was

At the meeting on 6th May 2020 there were no motion to engage solicitors in the drafting or assessment of the by-laws.

At the committee met on the 19th  August 2020 there was an item on the by-laws but no correspondence with solicitors:

17.7.2020                    CRIC By-Law Review

The correspondence listed no correspondence to solicitors

At the meeting on 6th May 2020 an item in General Business was

Noting: what should have been recodrd in teh minutes under Parkwood Villas [2010] QBCCMCmr 521 that

“documents would be tabled if they are the subject of discussion at the meeting”

Valley Terraces Echohamlets [2012] QBCCMCmr 314 521that:.

 “The requirement is simply that if an item of correspondence is tabled then it should be listed in the minutes.” 

No “amended by-laws” were tabled or attached to the minutes. No motion was passed to appointment of Legal opinion of By-Laws to be proposed to the General meeting

No subsequent correspondence was every presented to the committee of any legal correspondence to the committee in any subsequent meetings.

Changes to the By-Laws and registration of a new CMs was listed as item 12 on the Agenda of the 2020 AGM by the committee of 5 votes to 0 at the committee meeting on the 91th August 2020.

To compare the behaviour of the individuals on the committee from May to Agust 2020 it is worth looking at the reasonable behaviour of the committee on the   18th April 2018 (common members to the committee on the 19th August 2020, were Lynne Smith – and  Ora Whaanga) voted  to

The same committee at the committee on the  15th August 2018 voted to consider the legal advice and share with owners.

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Agenda for the Committee Meeting to resolve dispute and correct past mistakes

Agenda for August committee meeting

1 Minutes

  1. apology and correction of minutes from 29th May 2023 meetin not kept in accordance with section 63 of the BCCM Regulations
    1. retraction of item in 20th February 2024 re minutes of 24th August 2022
    1. Retract  “flying minutes of 3 March 2023”

2. Business

2.1  void flying minutes of 3 March 2023”

2.2 appoint two members to the committee

2.2 Lot 20 apology for approval not being required but appreciate, application and  remove as an item of business

2.3 Lot 57 – void motion 29th May, report not part of caretaking duties , but appreciated report being tendered as part of caretaking agreement and actions taken

2.4 Fence Audit, note the report and resolve to take recommended action from the report

2.4.1 (incorporating 2.5 from 29th May 2023 )

void, motion Item 2.5 from 29th May 2023  and get two quote to repair all fences with repairs being done  in ¼ each year for 4 years, then add item to sinking funds and allow ¼  funding each year for next 4 years in priority recommended

2.5 void of motions from 20th February that are in dispute

2.6 void of motions from 29th May that are in dispute

2.7 void of decision made between 20th February to 30th June not decide under section 60, and consider applications in the meeting, or defer decision till required information of to motions for the body corporate by ordinary resolution

2.7 void as report not part of caretaking duty but appreciate action taken

2.7.1 – termite report outside paid by BC (only need for notice if enter area under eves or excusive use as most outside area is common property

2.7.2 – any report inside arranged is an option for owners to participate but at owner cost 

2.8 any solar panel application where the value is above $3000 is void, any subsequent application would to eb put to the AGM and need a  deed  to pass maintenance to any future owners.

2.9 issue a section 142 notice Archers

2.10 void this motion as an exclusive can park can allow parking to  whom  under licence  they want, apology for any notice given without authority

2.11 apology for non disclose of body corporate service  provider being considered

2.11.1 proposals received tabled and invite owner feedback till 31st August then VOCM of two candidate to offer to AGM with appropriate motions

2.12 roof audit tabled and repairs required

2.13 trailer off the assets

2.14 lot 22  void motion 29th May, report not part of caretaking duties , but appreciated and tendered as part of caretaking agreement and actions being

2.15 By-law contraventions notified and take action required under section 9

2.16 solar panel pool action as requried

2.16 void motion 29th May, report but part of caretaking duties , but appreciated and tendered as part of caretaking agreement and actions being

2.17 change of AGM date

3. Caretakers report

3.1 Void motion 3 apology for action not of committee 

3.2 report distributed with minutes.

3,3 motions arising from caretakers report

4. Correspondence

4.1 apology that correspondence not tabled at 29th May

4.2 correspondence

4.3 actions from correspondence 

4.4 owners motions under section 50  

5. Improvement application

5.1 review of restricted decisions

5.2review of decision made under 177 not considering 177(2)(c)

5.3 review of decision not made in accordance with section 57 and 60.

5.4 action to correct past motions that are void

5.4.1 motions to AGM for change to exclusive use by-laws

5.4.2 motion no by-law contravention till 31/12/24 to allow changes and applications from owners

5.4.3 motion inviting all owner reapply and announcement of condition that will be applied (a) council approval if required (b) deed to accept maintenance and to future owners

5.5 new applications 

6. Pet applications

6.1 review of decision not made in accordance with section 57 and 60.

6.2 motion inviting all owner reapply

6.3 new applications 

7. Statements of accounts

7.1 financial to date tabled

7.2 Levy

7.3 Budget

7.3.1Surveroy

7.3.2 Legal

7.3.2 Fence

7.3.3 Roof

7.3.4 Vegetation Management

7.3.5 By-Law Review and CMS change 2024

7.4 term deposits

8. Compliance

8.1 WHS

8.2 Fire

8.3 Pool

9. Registers

9.1 Contracts

9.2 Assets

9.3 Inspections

9.4 Improvements

10 General Meeting

10.1 authorise Archer to call

10.2 Statutory motions

10.3 explanatory material to statutory

10.4 motions from committee

10.5 explanatory material to motions from committee

10.6 owners motions

10.7 explanatory material from owners

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Vegetation Management at Somerset Gardens

The committee on the 18th April 2018 resolved that TPZ Project Arborist wold prepare a vegetation management Plan of the scheme land.

On the 15th November 2018 the committee was advised that “the author of the report reminds the committee again that failure to adopt teh remuneration of a specialist as other body corporate have done could result in significant fines for the Body Corporate of Somerset Gardens”

On the 15th November 2018, the committee ofOra Whaaanga (chair), Sara Butcher (secretary), Lynne Smith ) Treasurer, Lisa Ross, Barbara Spooner and Jenifer Stratford (with Lisa Ross having proxy from Tanya Lund) vote 7 affirmative to that the report ” will be the basis for tree management for Somerset Gardens over the next 10 years”.

On the 25th August 2021 the John Wurth, Ora Whaanga, Lynne Smith, Garry Fox, Margaret Day and Barbara Spooner, vote 6 affirmative that “the vegetation management plan be removed from future agendas and be replace with Garden Maintenance”.

On the 28th November 2022, it was recored in motion 2.2 “the Treasurer (Lynne Smith)explained that the committee have dispensed with the gardening plan and the matter was not finalised”. The committee of Sandra Ferguson, Ora Whaanga, Lynne Smith, Danielee Jones, MargieDay, Brian Arnold with Ora Whaanga holding proxy for Angela Bertrand voted 7 affirmative to that “The committee remove this item of business from the agenda”

To correct the affects of personal unprofessional belief of committee members overriding the professional opinions on the maintenance of the common property motion should be put to the body corporate that reads:

The Body Corporate by ordinary resolution resolves that the Arborist Report & Tree Management Plan, prepared by TPZ Project Arborist on the 17th May 2018, and confirmed by a resolution of the committee at a meeting on the 15th November 2018 adopted as the guideline for tree and vegetationmanagement at Somerset Gardens, furthermore, the committee is directed to

  1. Engage TPZ Project Arborist to update the Arborist Report & Tree Management Plan of the 17th May 2018, with the report to be completed one month after engagement, and the report details a yearly plan of required for the next 10 years, 
  2. Obtain quotes for expected cost from two arborists capable and qualified to conduct the work required as proposed in the Arborist Report & Tree Management Plan divided into yearly cost for the next 10 years.
  3. Prepare sinking fund adjusted projections of costs to allow funding of the work works requiredas proposed in the Arborist Report & Tree Management Plan
  4. Budget for 1/10 funds to be available for the work required as proposed in the Arborist Report & Tree Management Plan in each budget for the next 10 years.
  5. Make application to the Gold Coast City Council to work required as proposed in the Arborist Report & Tree Management Plan and keep the applications current.
  6. Each year, for the next 10 years,  get 2 quotes, if above the maximum spend limits and engage suitably qualified and experienced Arborist or Tree Management Companies toundertake work required as proposed in the Arborist Report & Tree Management Plan.