Question: Are lot owners required to submit quotes along with their submitted motion if the proposal is less than the major spending limit?
If a Queensland lot owner submits a motion for the AGM, are they required to obtain quotes if the cost of giving effect to the motion/proposal is more than the relevant limit for major spending for the community titles scheme?
Thus, where the major spending limit is say $300,000 and the cost of giving effect to the owner’s motion is, say $50,000, does the owner need not obtain quotes? Or is it sufficient to include, in the motion, a statement that the cost be capped, or not be more than, say $60,000?
Answer: If quotes are not submitted, even if the motion is approved, the works will not be fully approved.
To properly authorise a scope of works or similar, it is important that quotes are considered irrespective of the cost. If insufficient detail is included, the motion will be ruled out of order. This is so that owners are made aware of what they are actually approving.
Adjudicators have supported this position in Cairns Aquarius [2018] QBCCMCmr 447 by relevantly providing:
“Firstly, I consider the principles adopted in Katsikalis are relevant to the proposition put to owners in Motion 3. As stressed by the Court of Appeal, “It is important that the rights to common property of bodies corporate are not removed unheedingly or inadvertently and to the detriment of their members”. In this context, it is significant that the motion did not detail: the improvements proposed to be made to common property; how those improvements would affect common property; or whether the making of those improvements would amount to a disposition of common property”
If quotes are not submitted, even if the motion is approved, the works will not be fully approved. It will just be an indication of the support for a project. This was confirmed in Redlynch Grove Apartments [2009] QBCCMCmr 195 (our emphasis) by relevantly providing:
As mentioned above, Motion 3 was that independent legal advice is to be obtained by the body corporate to investigate the past conduct of the current committee but this motion was ruled out of order on the following grounds:
- It does not name a legal adviser or provide a mechanism for choosing a legal adviser;
- It did not include quotes to enable the body corporate to approve the expenditure;
There is no provision for this expenditure in the current budget and there was no mention of a special resolution to raise funds for this proposal.
I believe it is quite plausible that the purpose of this motion was to make a preliminary decision as to whether or not legal advice should be obtained and was not an expenditure motion. In the event that the motion was carried, a further motion to engage legal representatives could be placed on the agenda for the next general meeting. Accordingly, I do not believe that this motion should have been ruled out of order.
If a total cost is approved but there is insufficient detail as to who is being engaged and on what basis, a further quote would need to be considered.
This post appears in the August 2022 edition of The QLD Strata Magazine.
Todd Garsden Mahoneys E: tgarsden@mahoneys.com.au P: 07 3007 3753