181 The Esplanade [2000] QBCCMCmr 383 (27 July 2000)

C G YOUNGREFERENCE: 0359-2000

INTERIM ORDER OF AN ADJUDICATOR

MADE UNDER PART 10 OF CHAPTER 6

BODY CORPORATE AND COMMUNITY MANAGEMENT ACT 1997

Number of Scheme:	518
Name of Scheme:	181 The Esplanade
Address of Scheme:	181 The Esplanade CAIRNS QLD 4870

TAKE NOTICE that pursuant to an application made under the abovementioned Act by

Dennis Howell TERRACINI, owner of Lot 26, and Integrity Insurances Pty Ltd ACN 008 559 840, owner of Lot 32,



C G YOUNGI hereby order that the resolutions made in respect of Motion 2 (regarding a response to Application 292-2000), Motion 4 (for the engagement of Body Corporate Services Pty Limited) and Motion 5 (for the authorisation of Anne Maxwell) by the committee declared elected on 29 May 2000 at a meeting held on 21 June 2000, are invalid and of no effect.

I further order that the extraordinary general meeting of the body corporate notified to be held on Friday 28 July 2000 must not proceed and all motions contained in the agenda for the meeting must, unless sooner withdrawn, be included in the agenda of the meeting ordered to be held under Order 291-2000 of even date.

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STATEMENT OF ADJUDICATOR’S REASONS FOR DECISION - REF 0359-2000

“181 The Esplanade” CMS 518

The applicants, Dennis Terracini of Lot 26 and Integrity Insurances Pty Ltd, have sought the following order of an adjudicator under the Body Corporate and Community Management Act 1997 (“the Act”), quote -

(a)

Declaration that all resolutions contained in the document titled “RESOLUTIONS OF THE COMMITTEE OF THE BODY CORPORATE FOR 181 THE ESPLANADE CTS 518 PURSUANT TO SECTION 35 OF THE BODY CORPORATE AND COMMUNITY MANAGEMENT (STANDARD MODULE) REGULATION 1997” dated 21 June 2000, signed by John Madderom, Donald Graham, Marcia Breen and Anne Maxwell and signed for Peter Verri, were not resolutions capable of being lawfully made by a committee of the Body Corporate and are therefore void.

(b)	That the Body Corporate not pay the accounts of Williams Graham and Carman, Solicitors dated 2 March 2000, 20 April 2000 and 15 May 2000.

(c)	Such other order as the adjudicator deems fit.

The applicants have also made application for an interim order in identical terms to the above. Also, on 18 July 2000 the application was amended to include a further interim order objecting to the holding of the extraordinary general meeting notified by the body corporate to be held on Friday 28 July 2000.

Section 223(1) of the Act provides that an adjudicator may make an order that is just and equitable in the circumstances (including a declaratory order) to resolve a dispute, in the context of a community titles scheme, about –

(a)	a claimed or anticipated contravention of the Act or the community management statement; or
(b)	the exercise of rights or powers, or the performance of duties, under this Act or the community management statement; or
(c)	a claimed or anticipated contravention of the terms, or the termination of, or the exercise of rights or powers under the terms of, or the performance of duties under the terms of an engagement contract or an authorisation contract.

An order may require a person to act, or prohibit a person from acting, in a way stated in the order (section 223(2)). An adjudicator’s order may contain ancillary or consequential provisions the adjudicator considers necessary or appropriate (section 230(1)).

Section 225(1) of the Act 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.

This is one of five applications that I have before me for adjudication of disputes within “181 The Esplanade”. Interim orders have been sought in respect of each of them. On 8 June 2000 I made Interim Order 292-2000 dismissing the application for an interim order in respect of Application 292-2000 lodged by the same applicants for this application, Mr Terracini and Integrity Insurances Pty Ltd. A final order to that application is being issued concurrently with this order. The other three applications are Applications No’s. 291-2000, 306-2000 and 310-2000, all of which have also been lodged by Mr Terracini and Integrity Insurances Pty Ltd except for 310-2000 which was lodged by Aninoxlo Pty Ltd ACN 010 888 856 as owner of Lot 34.

Concurrently with the order to this application, and the final order to Application 292-2000, an interim order will be issued for Application 291-2000.

On Tuesday 25 July 2000 I held a teleconference with the legal representative for the applicants, Michael Laycock of Petersen McCullough Robertson, and the legal representative for the respondent body corporate, Jodie Ross of Williams Graham & Carman. The conference was for the purpose of giving notice of my reasons and decisions in respect of Applications 291 and 292-2000, and, more importantly, notice of my interim order to this application requiring the extraordinary general meeting not proceed. I believe it is in everyone’s interests that I should make known that interim order verbally so that the stop documents could be sent to owners by the body corporate as quickly as possible to lessen any inconvenience this order may cause. It appears, in any event, that the body corporate had itself decided to defer the meeting.

Before proceeding to a determination of this application there is a matter of jurisdiction that, although not raised by the parties, I need to address. The applicants have nominated the respondents to be the body corporate and each of the five members of the (purported) committee, namely John Madderom, Donald Graham, Peter Verri, Anne Maxwell and Marcia Breen.

The “Dispute Resolution” provisions are set out in Chapter 6 of the Act. Section 182 provides that a dispute must be between certain defined parties to bring it within the dispute resolution provisions. Section 183 then sets out the various acts that may constitute a dispute. Clearly the matters raised in the application are a dispute within the meaning of section 183 as they concern the decisions of the body corporate committee and the holding of a general meeting.

However, the question arises as to whether the individual committee members are recognised disputants under section 182. This section provides that a dispute may be between –

(a) An owner or occupier and another owner or occupier.

(b) An owner or occupier and the body corporate.

(c) A body corporate and a Body Corporate Manager.

(d) A body corporate and a service contractor who is also a Letting Agent.

(e) A body corporate and a Letting Agent.

There is no provision for an owner to bring a dispute against either an executive or ordinary member of a committee, or indeed the committee itself. Decisions by a committee are a decision of the body corporate and an action against the body corporate is sufficient to have the matter determined. While the members may also be owners, the application concerns actions taken by them in their capacity as committee members and not as owners. In my opinion they cannot be respondents to a dispute and I will deal with the application as a dispute between the applicants and the body corporate only.

There are two parts to this interim order: the invalidation of the committee resolutions of 21 June 2000; and the objection to the holding of the general meeting this Friday 28 July. I shall deal with each in turn. The further order sought, that the accounts of Williams Graham & Carman not be paid by the body corporate, has already been dealt with in Order 292-2000 and need not be repeated here.


Invalidation of resolutions of 21 June 2000: In my Order 292-2000 of today I have already declared void the resolution made in respect of Motion 1 approving $5,684 in payments to Williams Graham & Carman. In view of this decision, the resolution passed in respect of Motion 2 to advise the Commissioner that these cost were approved, is meaningless. To make that clear it will also be referred to in this order.

In the final paragraph of my reasons to that Order 292-2000 I said in respect of Motion 4 –

However I would make a further observation from my reading of the minutes of the committee meeting of 21 June 2000. Motion 4 is for the appointment of a Body Corporate Manager on 13 July 2000 on expiry of the current Body Corporate Manager contract. A committee cannot engage a Body Corporate Manager. Section 87(1(a) provides that an engagement can only be made by an ordinary resolution of the body corporate in general meeting. This has ramifications for the convening of the forthcoming extraordinary general meeting and is referred to in the reasons to Order 359-2000

My order also provides that this resolution is void.

The only other motion of any consequence, Motion 5, is for the appointment of Anne Maxwell in accordance with an “attached submission”. The attachment is a letter from Maxwell addressed to the chairperson, John Madderom, agreeing to a “minimal extension” to an arrangement for her to act as manager and caretaker. The wording of the final paragraph, and the general circumstances, show that she is acting in the capacity of a Letting Agent under the legislation (see section 17(1) of the Act). Section 87(1) of the Standard Module is equally applicable to the authorisation of a Letting Agent as it is to the engagement of a Body Corporate Manager (see above quotation regarding Motion 4). An authorisation can only be made by an ordinary resolution of the body corporate in general meeting and not by a committee. The committee cannot resolve such an appointment itself. This resolution is void also.

Of the remaining two motions, Motion 6 is merely a decision to convene a general meeting as soon as possible. I would be concerned if the words “to ratify the above resolutions” implies that the members knew that certain motions were beyond the power of the committee, rather than being a mere confirmation of their decisions which were made in ignorance of the legislative requirements. If so then it has caused a large amount of work for others and this office.

Motion 3 is to instruct solicitors to respond to Application 291-2000. In the absence of any grounds submitted by the applicant concerning this motion, or evidence that the legal costs involved are not in excess of the committee’s expenditure limit, I make no order regarding this motion.

As the resolution passed in respect of Motion 1 has been voided by Order 291-2000, this order need only void Motions 2, 4 and 5.


Extraordinary General Meeting to be held on Friday 28 July 2000: I have already found that the purported engagement of Body Corporate Services Pty Limited by Resolution 4 of the committee meeting of 21 June 2000, is in contravention of the legislation and void.

The notice of meeting dated 6 July 2000 is on the letterhead stationery of that Body Corporate Manager and is signed by its representative as the Secretary. The covering letter of the company is signed by the same representative, Jane Smith, as “Body Corporate Manager/Secretary”. She is not the elected secretary (either in the purported committee or the previous committee) nor can she possibly hold a valid delegation of the powers of secretary. She had no power to call a meeting. The meeting has been improperly called.

Apart from this, there are other reasons why the meeting should not proceed. The most important is that a fresh committee must be elected. Also, my orders will undoubtedly cause both of the opposing parties to reconsider their position with the likely result that fresh and replacement motions will want to be included in the meeting ordered to be held as soon as possible.

My order is that the meeting was called in contravention of the legislation and must not proceed. That concludes my determinations in this matter.

I would also mention that, pursuant to the powers provided by section 197(4), submissions have not been sought from the respondent. It was considered that sufficient information was already available to adjudicate the matter, both in the papers submitted and the evidence existing for Applications 291-2000 and 292-2000. Additionally, the matter was one of urgency, with the incorrectly called meeting for Friday 28 July 2000, and any order had to be in time to be effective in halting the meeting. As disclosed, advice of the stopping of the meeting under this order was given verbally to the respondent’s solicitor on.

In the circumstances it is not intended to invite further submissions regarding this matter, or to make a further order, since this decision, though an interim one as sought by the applicant, is final in its determination of this matter.2y2y