Paringa Lodge [2000] QBCCMCmr 439 (31 August 2000)

RA MeekREFERENCE: 0438-2000

INTERIM ORDER OF AN ADJUDICATOR

MADE UNDER PART 10 OF CHAPTER 6

BODY CORPORATE AND COMMUNITY MANAGEMENT ACT 1997

Number of Scheme:	14940
Name of Scheme:	Paringa Lodge
Address of Scheme:	146 Macquarie Street ST LUCIA QLD 4067

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

Ian Angus Anderson and Mary George Anderson as Trustees, the owners of lot 6



RA MeekI hereby order that the committee meeting of Paringa Lodge held on 22 July 2000, and all resolutions purportedly carried at that meeting, are invalid and of no effect.

I further order that the purported termination of the engagement of Mr John Pole for cleaning and gardening services by letter of the secretary to Mr Pole of 24 July 2000, is invalid and of no effect. y

STATEMENT OF ADJUDICATOR’S REASONS FOR DECISION - REF 0438-2000

“Paringa Lodge” CMS 14940

The applicants Ian Angus Anderson and Mary George Anderson as Trustees, the owners of lot 6, have sought the following order of an adjudicator under the Body Corporate and Community Management Act 1997 (the Act), quote -

We seek an order invalidating the convening and conduct of the Body Corporate Committee held in Unit 4 ... “Paringa Lodge” ... on Saturday 22 July and all resolutions, decisions and actions emanating thereof.

The Applicants have also sought the following interim order of an adjudicator, quote -

Put on hold the action of the body corporate committee in terminating the engagement of Mr John Pole, Gardener, Cleaner and Handyman; Also the change of address for communication with the body corporate to 3/146 Macquarie Street, St. Lucia; Also the attempt to usurp and replace Body Corporate Services (the engaged body corporate manager) from the administration of “Paringa Lodge” CTS 14940.

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)).

In the supporting grounds, the applicants have raised several concerns regarding the validity of the committee meeting held on Saturday 22 July 2000 (the meeting). In particular, they allege that “the provisions of Division 7 – Administrative Arrangements for Committee Meetings - ... were not adhered to in the convening and conduct of the committee meeting ...”.

In particular, the applicants allege that certain members of the committee did not receive notice, or proper notice, of the meeting.

The committee of the body corporate has been requested to provide a submission prior to the making of this interim order. A submission, signed by “June Nichols” as Secretary, but purporting to be a submission by the committee in response to the application, is available to me in determining this application for an interim order. I further note that the secretary has included in that submission much material which I consider to be irrelevant. The application relates to the validity of the committee meeting, but the secretary has referred to several other aspects including the AGM held on June. I do not consider the raising of these aspects a basis for explaining deficiencies which might exist in the convening of the meeting.

The secretary states in part that –

The secretary was thus unable to send a formal notice to COMMITTEE members or to Mr Hodgson, Manager, BODY CORPORATE SERVICES.

The secretary later states –

The difficulties with arrangement of the meeting and the lack of formal notice to B/C COMMITTEE members has been described above.

The secretary contends that the lack of formal notice was due to difficulty in contacting certain committee members. The standard module provides in section 28 as follows –

ú
Time of committee meetings
28.(1) A meeting is called by giving written notice of at least 7 days to all
other committee members of when and where the meeting is to be held.
(2) Also, advice of the proposed meeting—
(a) if the body corporate maintains a notice board—must be placed
on the notice board; and
(b) must be given to each lot owner individually, other than a lot
owner who—
(i) has instructed the secretary that the lot owner does not wish
to be given advice of committee meetings; and
(ii) has not withdrawn the instruction.
(3) The advice mentioned in subsection (2)—
(a) must state when and where the meeting is to be held; and
(b) must be accompanied by the agenda for the meeting; and
(c) if placed on the notice board—must be placed there at least
24 hours before the meeting is to be held; and
(d) if given to a lot owner individually—must be given in a way that
ensures its delivery to the lot owner’s address for service at least
24 hours before the meeting is to be held.

It is clear that a minimum of 7 days written notice to all committee members of a proposed committee meeting is required by the section. I do not accept the explanation of the secretary regarding the lack of proper notice. I an not satisfied that any written notice of the meeting was given (if it were, it was certainly not provided with the secretary’s submission, which would seem an appropriate opportunity to provide a copy of such notice), and even though notice of the meeting might have been given verbally to certain members, there is no evidence that such notice was given to all committee members. In fact, it is clear that notice was not given to the Treasurer of the body corporate. This is clearly acknowledged by the secretary in her submission wherein she indicates that details of the meeting were forwarded to Mr Hodgson following the meeting.

A second allegation made by the applicants is that the termination of Mr Pole’s services “was not in accordance with section 37(4) of the Regulations whereby lot owners are to be given a period of 7 days from the receipt of committee minutes to object to any resolution before the proposed action can be carried out by the committee”.

The sequence of events regarding the termination of Mr Pole appear to be as follows –

• Committee meeting held on 22 August 2000 at which it was resolved that “in review of cleaning / gardening arrangements the B/C committee has decided to terminate the engagement of Mr John Pole”;

• Mr Pole was advised of his immediate termination by letter signed by the secretary dated 24 July 2000;

• A circular letter to all unit owners enclosing a copy of the agenda and minutes of the committee meeting held on 22 July 2000, again signed by the secretary, was sent on 26 July, 2000;

• In addition, on 26 July 2000, the secretary sent a letter to Mr Craig Hodgson, which clearly seeks to implement other matters resolved at the committee meeting held on 22 July 2000.

Section 37 of the standard module provides relevantly as follows –

Carrying out resolutions of committee meetings
37.(1) A copy of a resolution passed at a meeting of the committee must
be given to the owner of each lot included in the scheme (other than a lot
owner who has instructed the secretary that the lot owner no longer wishes
to be given copies of committee resolutions and who has not withdrawn the
instruction), whether separately or as a part of a copy of minutes of the
meeting at which the resolution was passed, in 1 of the following ways—
(a) giving it to the lot owner personally;
(b) sending it by mail;
(c) sending it by facsimile.
(2) A notice (a “notice of opposition”), signed by or for the owners of
at least half the lots included in the scheme, may be given to the secretary,
opposing the carrying out of the resolution.
(3) A notice of opposition must be given to the secretary within 7 days
after action taken under subsection (1) is completed (the “required
period”).
(4) The committee may carry out the resolution only if—
(a) no notice of opposition is received by the secretary within the
required period; or
(b) the resolution is necessary to deal with an emergency, and—
(i) the amount required to put the resolution into effect is within
the relevant limit for committee spending for the scheme; or
(ii) an adjudicator acting under the dispute resolution provisions
authorises the committee to carry out the resolution; or
(c) the resolution is ratified by ordinary resolution of the body
corporate.

I cannot find in the secretary’s submission any reference to or explanation of this alleged irregularity. Under the reference “VIII” there is the following general statement –

...The actions of the applicants in contesting the convening and conduct of the BODY CORPORATE COMMITTEE meeting of 22^nd July 2000, and in contesting the functioning and legitimacy of the COMMITTEE in so many ways, have imposed an additional burden upon office bearers, and have inhibited practical action and sincere attempts to remedy the many ills which beset PARINGA LODGE.

We aim for beneficial and flexible management on behalf of all unit owners. We cannot do this or function if we are in chains or reduced to a mere cipher – which seems to be the desire of the applicants.

This is not in any way a satisfactory explanation of a failure to comply with the requirements of section 37 of the standard module. I recommend to the secretary (given her current role) that she fully acquaint herself with, and thereafter comply with, the requirements of the Act and standard module in respect of meeting procedures therein set out, rather than complain of the actions of an owner who has had the temerity to raise a complaint regarding a lack of observance of such procedures.

In another submission received from a John Massey, also on behalf of the committee, it is states that –

The circumstances of the termination of Mr Pole’s engagement are claimed not to be in accordance with Section 37(4) of the Regulations .... Again the haste of the secretary should be seen in the need to promptly stop the haemorrhaging of the outflow of body corporate funds to the service provider who was seen to be devouring a substantial portion of the budget, to dubious effect.

Whilst in Mr Massey’s opinion, the non-compliance with section 37 might have been reasonable and prudent, I do not agree. This is not a sufficient justification to warrant the non-compliance.

In the circumstances, I am satisfied that the meeting should be invalidated at this point, rather then when a final order is made. I am satisfied that the irregularities regarding notice of the meeting, and notice to owners after the meeting, which prevented any objection by owners, prior to the implementation of resolutions carried at the committee meeting, are sufficiently serious contraventions of the requirements of the legislation as to warrant the invalidation of the meeting without further investigation.

Given that the meeting has been ordered invalid, then all actions taken by the secretary and others in respect of the implementation of the resolutions purportedly carried at the meeting, including the termination of Mr Pole, are invalid and of no effect. I suggest that the body corporate will be obliged to pay the usual fees of Mr Pole during his period of termination, notwithstanding that his services were not provided during this period. However this is a contractual matter for the body corporate.

A further committee meeting, or general meeting, will need to be held to consider all or any of the matters considered at the meeting. In this regard, there is further information in the submission of the secretary which concerns me. “DOCUMENT 3” attaching to that submission purports to be a notice of an EGM. The notice is dated 31 July 2000, and states that “there will be an EGM of Paringa Lodge body corporate – Time: 5.30 pm Tuesday 8 th August 2000.” A further memo to all owners on 1 August 2000 appears to acknowledge that the secretary has become aware in the meantime of the requirement of 21 days notice of meeting. The later memo then states that “the date and time of the meeting will have to be agreed upon and arranged between unit owners”.

By way of comment, the purported “Notice” of meeting is deficient in more respects than simply the requirement of 21 days notice, though this is significant. As well, there are several other components required to be included in a notice of meeting including –

• An agenda;

• A proxy form;

• A voting paper.

Whilst the secretary might wish to simplify matters, I suggest that it is in the interests of this body corporate to ensure that the secretary is properly versed in the requirements of the legislation, or failing this, that professional assistance is obtained in respect of complying with those requirements, particularly so far as meetings are concerned.

As this order, though an interim one, is final in its determination of the application, it is not intended to make any further or final order to the application. If any member of the body corporate, or the body corporate, is aggrieved by the terms of this order, then consideration should be given to appealing the terms of this order.

All parties should note the provisions of section 225(2) of the Act which provides that -

An interim order -

a)	has effect for a period (not longer than 3 months) stated in the order; and
b)	may be extended, renewed or cancelled by the adjudicator until a final order is made; and
c)	may be cancelled by a later order made by the adjudicator; and
d)	if it does not lapse or is not cancelled earlier - lapses when a final order is made by the adjudicator.