Riverbend Gardens [2000] QBCCMCmr 269 (8 June 2000)

RA MeekREFERENCE: 0089-2000

INTERIM ORDER OF AN ADJUDICATOR

MADE UNDER PART 10 OF CHAPTER 6

BODY CORPORATE AND COMMUNITY MANAGEMENT ACT 1997

Number of Scheme:	26822
Name of Scheme:	Riverbend Gardens
Address of Scheme:	36 Albert Street WATERFORD QLD 4133

TAKE NOTICE that pursuant to an application made under the abovementioned Act by RK & JM Holdings Pty Ltd, the former owner of lot 1, in its capacity as manager and letting agent

RA MeekI hereby order that within two (2) months of the date of this order, the body corporate of Riverbend Gardens shall convene and hold a general meeting, at which it is hereby ordered to determine by ordinary resolution the following motion –

Motion ? Proposed by order of an Adjudicator, Office of the Commissioner, Body Corporate and Community Management (application no. 0089-2000)

Payment of amount on transfer of management and letting rights

That the body corporate of Riverbend Gardens require, as a condition of approving the transfer of the management and letting rights from RK & JM Holdings Pty Ltd as trustee for the Sunset Unit Trust (as Vendor) to Vinemont Pty Ltd (as Purchaser), that RK & JM Holdings Pty Ltd pay to the body corporate an amount determined in accordance with the provisions of section 83 of Body Corporate and Community Management (Accommodation Module) Regulation.

I further order that

a) the motion is to be included on the agenda and voting paper in the form set out in this order, excepting the relevant motion number, which should be inserted by the Secretary;

b) no explanatory note by any party shall be included as part of the motion;

c) the notice of meeting shall be accompanied by a copy of this order only and that any other information which relates to this motion shall not to be included with the notice of meeting;

d) only the owners of stages 1 and 2 of the scheme shall be entitled to vote in respect of the motion;

e) the meeting may consider any other motion or motions properly before it, and that in respect of such other motions, if any, all owners shall, subject to the usual rules, be entitled to vote.

STATEMENT OF ADJUDICATOR’S REASONS FOR DECISION - REF 0089-2000

“Riverbend Gardens” CMS 26822

The applicant R K & J M Holdings Pty Ltd, the former owner of lot 1, in its capacity as manager and letting agent, has sought the following order of an adjudicator under the Body Corporate and Community Management Act 1997 (the Act), quote -

A. That the resolutions passed and adopted at the first AGM of the body corporate for Riverbend Gardens convened 24 November 1999 in relation to motions 16, 17 and 18 be set aside.

B. That the Commissioner fix the Relevant Amount payable by RK & JM Holdings Pty Ltd to the Body Corporate pursuant to Section 83(2) of the Body Corporate and Community Management (Accommodation Module) Regulation 1997.

C. That in the alternative the Commissioner make Orders in relation to the First Annual General Meeting convened on the 24^th November 1999 that:

 

1.	The wording of the Note to Owners was intentionally confusing;

2.	The wording of the Explanatory Note was biased in favour of a “NO” vote against RK & JM Holdings Pty Ltd and highly prejudicial to the outcome;

3.	Pursuant to S.32 of the Body Corporate and Community Management (Accommodation Module) Regulation 1997 the Developer be precluded from voting its entitlement on any Motion dealing with the payment by RK & JM Holdings Pty Ltd of the Relevant Amount;

4.	The Reasons given by RK & JM Holdings Pty Ltd for the premature sale of the Management Agreement were of a nature within the scope of “hardship” anticipated by S.83(6) of The Body Corporate and Community Management (Accommodation Module) Regulations 1997;

5.	Motion 18 adopted at the first Annual General Meeting of the Body Corporate for Riverbend Gardens CTS 26822 convened 24 November 1999 in relation to the payment of the relevant amount by RK & JM Holdings Pty Ltd pursuant to Section 83(2) of the Act be put back to the lot holders for vote.

6.	Both the Body Corporate and RK & JM Holdings Pty Ltd be at liberty to put explanatory notes to the lot holders within the notice of the Extraordinary General Meeting.

7.	The Body Corporate convene an Extraordinary General Meeting as soon as practicable.

 

D. In the alternative, should the Commissioner determine that the Relevant Amount is payable by RK & JM Holdings Pty Ltd, the calculation of the said sum should not include stage three of Riverbend Gardens Estate as that stage has not been built and accordingly no money has been exchanged in relation to that stage. Therefore, no “fair market value” pursuant to S.83(1)(4) of The Body Corporate and Community Management (Accommodation Module) Regulation 1997 can be assessed in relation to stage 3.

 
Whilst the applicant did not seek an interim order, having considered the material before me, I have come to the conclusion that I am not in a position to determine the substantive issues in dispute until the body corporate has first clearly resolved the question of whether or not to charge a transfer fee pursuant to section 83 of the Body Corporate and Community Management (Accommodation Module) Regulation.

Section 225(1) provides that an adjudicator may make an interim order if satisfied, on reasonable grounds, that an interim order is necessary because of the nature or urgency of the circumstances to which the application relates. An adjudicator’s order may contain ancillary or consequential provisions the adjudicator considers necessary or appropriate (section 230(1)).

The applicant does not appear to specifically address whether the issue was properly determined, though I note that in the alternative orders sought by the applicant, it refers to “motion 18 adopted at the first AGM”. The body corporate responded that Motion 16 was resolved 13 “yes” and 10 “no”, and motion 18, 12 “yes” and 10 “no”.

The body corporate submits that –

As motions 16 and 17 were passed, then motion 18, being an alternative to motions 16 and 17 must fail, irrespective of the voting result.

I am not satisfied with this explanation. There is no legislative basis for it. I consider it clearly open to a reasonable person to conclude that both motions were in fact carried on the basis of simple majority vote. Practically though, as the motions are competing motions, this cannot be. I consider that the best that can be said of the interpretation of the vote on both motions is that members have approved the assignment of the management and letting agreement, as this is constant in both motions. The unresolved issue in my view is whether of not the body corporate should require the transfer fee on the assignment.

In these circumstances, I intend to order the body corporate to convene a meeting of the owners of stages 1 and 2, but excluding the owners of stage 3 (at least in respect of voting on the relevant motion to be considered) to consider a single motion as follows –

Motion ? Proposed by order of an Adjudicator, Office of the Commissioner, Body Corporate and Community Management (application no. 0089-2000)

Payment of amount on transfer of management and letting rights

That the body corporate of Riverbend Gardens require, as a condition of approving the transfer of the management and letting rights from RK & JM Holdings Pty Ltd as trustee for the Sunset Unit Trust (as Vendor) to Vinemont Pty Ltd (as Purchaser), that RK & JM Holdings Pty Ltd pay to the body corporate an amount determined in accordance with the provisions of section 83 of Body Corporate and Community Management (Accommodation Module) Regulation.

YES / NO / ABSTAIN

Only the owners of stages 1 and 2 of the body corporate are to vote on this motion, so as to preserve the status quo which existed at the time of the meeting at which this issue was first resolved. At the meeting, the body corporate is authorised to consider any other motion or motions properly before it, and in resect of such other motions (if any) owners in all stages are to be entitled to vote.

I have deliberately avoided the motion being “proposed” by either party. Further I order that no explanatory note by any party is to be included with the motion, and that the notice be accompanied by a copy of this order only and not any other information which relates to this motion. Information relating to any other motion to be considered may however be included with the notice of meeting. I consider that if owners want the benefit of explanation on the motion, they are at liberty to refer to such materials as were included in the notice of motion of the original meeting.

Once the meeting has been held, (and notwithstanding the outcome on the motion), I direct that outcome of the voting on the motion be immediately conveyed to me in the form of a copy of the relevant minutes of meeting, marked clearly to my attention (and referencing the application 0089-2000) so that I can then determine what, if any, further order is required. Clearly, if the motion is determined in the affirmation, I will then determine the matters in dispute raised in application 0089-2000. Further, I will do so without considering further information or submission by either party. I have deliberately avoided a determination of any such issues in this order, due to concern that a determination of such issues ahead of the motion being considered might have some influence on the outcome of the motion.