Casa Ca 'D' Oro [2000] QBCCMCmr 449 (8 September 2000)

PJ HanlyREFERENCE: 0256-2000

ORDER OF AN ADJUDICATOR

MADE UNDER PART 10 OF CHAPTER 6

BODY CORPORATE AND COMMUNITY MANAGEMENT ACT 1997

Number of Scheme:	17539
Name of Scheme:	Casa Ca 'D' Oro
Address of Scheme:	12-14 Venice Street MERMAID BEACH QLD 4218

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

Stewart Lawrence Meek and Irene Joan Meek, the co-owners of Lot 3


PJ HanlyI hereby order that the resolutions purportedly passed at the Annual General Meeting held on 2 May 2000 were at all times void.

I further order that the only members of the committee validly elected at the Annual General Meeting held on 2 May 2000 are Brian Kennedy, Chairperson; Jan De Forrest, Secretary; and Lyn Reichers, Treasurer.

I further order that within three (3) months of the date of this order, the body corporate secretary, shall call an Extraordinary General Meeting in accordance with the Body Corporate and Community Management Act 1997 ("the Act"), particularly sections 42 and 45 of the Body Corporate and Community Management (Standard Module) Regulation 1997 ("the Standard Module"), and all other provisions relating to meetings under Part 4 of the Standard Module, to consider motions which should properly have been considered at the annual general meeting held on 2 May 2000.

I further order that the meeting held in accordance with the above order may also consider any other motion which has been proposed by owners and notified to the secretary not fewer than 7 days prior to the notice of meeting being sent out to owners.






STATEMENT OF ADJUDICATOR’S REASONS FOR DECISION - REF 0256-2000

“Casa Ca 'D' Oro” CTS 17539

The applicants, Stewart Lawrence Meek and Irene Joan Meek, 3 have sought orders of an adjudicator under the Body Corporate and Community Management Act 1997 (“the Act”) against the body corporate, lot owners individually, and lot owners collectively. As the applicants have listed six statements under “Basis of Dispute” and eighteen statements under “Desired Outcome of this Dispute”, I have grouped the orders being sought into the following categories:

1.	Access to, and disposal of, common property.
2.	Lot owners and the body corporate complying with the provisions of the Act and the Body Corporate and Community Management (Standard Module) Regulation 1997 ("the Standard Module") .
3.	Invalidating a meeting held on 29 February 2000 and the Annual General Meeting held on 2 May 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)).

Access to, and disposal of, common property.
The applicants have sought the following orders under this category:

1.	Access to the common property area, and use of the common property, this being mainly the clotheslines that were permanently attached to the building.
2.	That Mary-Anne Sterling and Richard Goldner, the owners of Lot 1 replace the clothesline that was attached to the wall adjacent to Lot 1.
3.	That Peter and Lynette Riechers, the owners of Lot 2 replace the clothesline that was attached to the wall adjacent to Lot 2.
4.	That the owners of Lots 1 and 2 refrain from colluding to obtain a mutual aim of having sole use of parts of the common property.
5.	That the body corporate not remove or permit to be removed, any facility which benefits a resident.
6.	That the body corporate not restrict lawful access to parts of the common property.

The applicants state that prior to purchasing Lot 3, they saw two collapsible clotheslines attached to the exterior of the building outside Lots 1 and 2. However, subsequent to the purchase of Lot 3 the applicants allege that they were denied access to the common property area on which the clotheslines were located. The applicants further state that they were advised that access to this part of the common property area was restricted to the owners of Lots 1 and 2. However, the applicants state that an agreement was subsequently reached to allow them entry to this part of the common property. The applicants further state that the clotheslines were subsequently removed in April 2000.

Peter and Lynette Riechers, the owners of Lot 2, responded to the application stating that the clothesline attached to the wall of Lot 2 was installed by the original owner of this lot without the approval of the body corporate, and that the clothesline was removed to resolve the dispute concerning the use of it. They submit that the applicants have had unhindered access to the disputed part of the common property since March 2000.

Mary-Anne Sterling, the co-owner of Lot 1, responded to the application and stated that she installed the clothesline for her lot on common property without body corporate permission.

In her response to the application, the secretary, Jan De Forest makes the following points:

•	There were no laundry drying facilities in any common property space. The use of common property for laundry drying purposes has never been raised until recently.
•	All unit owners have right of access to all common areas.
•	Previous owners of Lots 1 and 2 installed the clotheslines on common property without body corporate approval.

The secretary’s response was also signed by P.M. Wilkinson, L Riechers, Mary Anne Sterling and Irene Kennedy.

It is not disputed that the clotheslines were positioned on common property walls outside Lots 1 and 2. It is clear from the submissions from the owners of Lots 1 and 2, and from the secretary that the clotheslines were installed by lot owners without body corporate approval. The owners of Lots 1 and 2 have now removed the clotheslines. Section 37(1) of the Act provides that the common property is owned by the owners of the lots included in the scheme as tenants in common. A lot owner can only make an improvement to the common property with the authorisation of the body corporate given in accordance with section 114 of the Standard Module. In this case, the owners of Lots 1 and 2 did not have a right to install and keep clotheslines on the common property without body corporate approval. The clotheslines did not become body corporate property merely because they were installed on common property, and the owners of Lots 1 and 2 had the right to remove them. Therefore, I do not propose to order that the owners of Lots 1 and 2 replace the clotheslines.

The applicants have also sought general orders in respect of the use of, and access to, common property. The Act enables a body corporate to make a by-law which gives the occupier of a lot exclusive use to the rights and enjoyment of common property. There are no exclusive use by-laws recorded on the Community Management Statement for this scheme. Therefore, a lot owner or occupier cannot be denied access to a part of common property, including the common property areas on Level B of BUP 101708. The secretary has submitted that all owners have access to all common property areas. Therefore, I have no reason to consider this matter further. However, the body corporate must be aware of its obligations under sections 87 and 114 of the Act to administer, manage and control the common property reasonably and for the benefit of the owners of all lots included in the scheme.


Lot owners and the body corporate complying with the provisions of the Act and the Standard Module.
The applicants have sought the following orders under this category:

1.	That Mary-Anne Sterling and Richard Goldner, the owners of Lot 1; Peter and Lynette Riechers, the owners of Lot 2; Brian and Irene Kennedy, the owners of Lot 4; and Ramon and Janet De Forrest, the owners of Lot 5 act within the guidelines set down by the Act, enter into a written agreement not to conspire with each other to restrict the lawful rights of another resident, and be barred from holding any body corporate office.
2.	That the owners of Lot 3 be allowed to enjoy their home free of tension and ill will.
3.	That the body corporate act in accordance with the Act and not resolve to give any owner an unfair advantage over another owner.
4.	That recommendations be made as to the appointment of a body corporate to run the affairs of the residents.

For the following reasons, I do not propose to make an order in respect of these issues. Firstly, the applicants seek an order which requires the body corporate and lot owners to comply with the Act and the Standard Module. The Act and the Standard Module detail the rights, duties and obligations of a body corporate and the owners of lots included in a community titles scheme. In the absence of a specific contravention of the legislation, it is not necessary that an order be made requiring general compliance with a legislative obligation. Secondly, there is no legislative ground for forcing a person to enter into a written agreement for the reasons expressed by the applicants. The idea that lot owners enter into an agreement not to conspire against another resident is absurd. In any event, I am satisfied that there is no evidence that any of the owners are conspiring against any other owner. Thirdly, a lot owner cannot be barred from holding any body corporate office. The eligibility for committee membership is prescribed by section 10 of the Standard Module.

I suggest that all owners of lots in this scheme give serious consideration to the resolution of issues which are evident and which do not relate specifically to this legislation. The problems being experienced in this scheme have reached an unhappy stage. For this reason alone, the applicants and the other lot owners should be attempting to resolve their differences. I would hope that there is room for negotiation and agreement, which could allow parties to live in a more harmonious environment. As a means of resolving their differences, the parties to this dispute could consider accessing the mediation service provided by the Department of Justice as a way of settling these disputes without legal action. It is obviously vital that all occupiers living in a community titles scheme have due regard to the occupiers of other units in that community.

Invalidating a meeting held on 29 February 2000 and the Annual General Meeting held on 2 May 2000.
The applicants have sought the following orders under this category:

1.	That the meeting held on 29 February 2000 be invalidated and that all resolutions of this meeting be invalidated.
2.	That the Annual General Meeting held on 2 May 2000 be invalidated and that all resolutions of this meeting be invalidated.

In respect of the meeting dated 29 February 2000, the applicants state that 2yit was designated as “informal”, that a proper procedure was not adopted for the election of committee members, and that no minutes of the meeting were taken. The applicants state that discussions regarding access to the common property outside Lots 1 and 2 took place at this meeting. In respect of the Annual General Meeting held on 2 May 2000, the applicants state that the proper notice of meeting was not given to owners and that the draft documents sent by the previous Body Corporate Manager were used for the meeting. The applicants also contend that the election of committee members was not in accordance with the regulations. Further, another general meeting was commenced immediately after the Annual General Meeting was declared closed.

In her response to the application, the secretary states:

•	That the previous Body Corporate Manager distributed the documentation relating to the nominations for committee positions before the end of the financial year, and in accordance with the Standard Module.
•	The meeting in February 2000 was informal and intended to be an opportunity for owners to prepare for the future without the presence of a Body Corporate Manager.
•	That after the termination of the Body Corporate Manager, it was originally thought that a general meeting was necessary to choose committee members to the vacant committee positions, and that it was not realised that the Annual General Meeting had to be held by the end of April. It was agreed without dissent (including the applicants) at the meeting dated 2 May 2000 to consider the Annual General Meeting agenda items firstly, and to have an immediate general meeting to consider the other ongoing business.

With the exception of committee meetings, all meetings of the body corporate are general meetings. Section 39(2) of the Standard Module provides that “A general meeting is either an annual general meeting or an extraordinary general meeting”. The Standard Module prescribes how a general meeting is called, the giving of a notice of general meeting, the procedural requirements for holding a general meeting and the record to be kept of a general meeting.

The secretary has submitted (with the consent of the owners of four of the six lots) that the meeting dated 29 February 2000 was “primarily social and a chance to bring hitherto absent unitholders up to scratch on developments, prepare for the future in a more leisurely fashion”. The meeting was not a general meeting, but a gathering of owners to consider issues, some of which would subsequently be determined at the later Annual General Meeting. No minutes were kept of this informal gathering. I do not propose to order that this meeting be invalidated, as it was an informal gathering of owners rather than a general meeting.

The body corporate held its Annual General Meeting on 2 May 2000. While a draft agenda appears to have been forwarded to owners, it is clear that a notice of general meeting was not given to owners in accordance with sections 42, 43 and 45 of the Standard Module. Section 42 of the Standard Module provides that not only must the notice of a proposed general meeting contain the time, place and agenda of the meeting; it must also be accompanied by a proxy form, a voting paper, and explanatory or other materials. Further, section 45(3) provides that the agenda for an annual general meeting must provide for a presentation of the accounts for the financial year; provide for the appointment of an auditor; provide for the approval of a budget; and fix contributions to be paid by lot owners. Section 95 of the Standard Module provides that the contributions to be levied on each lot owner must be fixed based on the budgets for a financial year. An administrative fund budget and a sinking fund budget were not presented to the meeting for the approval of owners. The body corporate cannot rely on a draft meeting notice prepared by the previous Body Corporate Manager as evidence that it has complied with the Standard Module. Rather, the body corporate should have taken notice of the contents of this draft notice when convening the AGM.

For these reasons, I have ordered that the resolutions purportedly passed at the Annual General Meeting held on 2 May 2000 were at all times void. I have not invalidated the meeting as I consider that, to a degree, the election of committee members complied with the provisions of the Standard Module.

There is evidence that the previous Body Corporate Manager gave notice to each lot owner in accordance with section 13 of the Standard Module inviting owners to nominate for election to the committee. There is also evidence that Brian Kennedy was correctly nominated in writing for election to the position of chairperson. It would appear that the body corporate secretary received the written nomination of Peter Reichers on 1 February 2000, which was one day after the last day by which such nominations were required to be received. However, I note from the minutes of the AGM that Mr Reichers did not subsequently take a position as an ordinary committee member. As Mr Kennedy was the only person nominated for the position of chairperson, he must be declared elected to that position in accordance with section 21(1) of the Standard Module. As no nominations were received for the positions of secretary and treasurer, these positions must be filled at the AGM in accordance with section 21 of the Standard Module. The minutes of the AGM indicate that Jan De Forrest was nominated and elected as secretary, and Lyn Reichers was nominated and elected as treasurer. I consider that the election of these executive members of the committee at the AGM is valid. However, three owners were also chosen as ordinary committee members. Section 22(4) of the Standard Module restricts the numbers of all committee members to three when the number of nominations made under section 13 is less than three. In this case, only one nomination (Mr Kennedy) was received under section 13. Therefore, I have ordered that the committee consists of Mr Kennedy as chairperson, Mrs De Forrest as secretary, and Mrs Reichers as treasurer, and that the election of the three ordinary committee members is invalid.

The body corporate now has to consider the statutory motions required for an annual general meeting to put it on a proper legal footing, and for this reason I have ordered that the body corporate secretary convene an Extraordinary General Meeting for this purpose. This meeting must be called and held in accordance with the provisions of the Act and the Standard Module. The agenda for the meeting must contain the statutory motions listed in section 45(3) of the Standard Module, and should contain any other motions considered at the AGM held on 2 May 2000. The secretary is not required to invite additional motions from lot owners, but must list on the agenda of the meeting any motions which are proposed by owners, provided that such motions are received by the secretary not fewer than 7 days prior to the notice of meeting being sent out by the secretary.