Natchez [2000] QBCCMCmr 462 (13 September 2000)

P J HANLYREFERENCE: 0465-2000

INTERIM ORDER OF AN ADJUDICATOR

MADE UNDER PART 10 OF CHAPTER 6

BODY CORPORATE AND COMMUNITY MANAGEMENT ACT 1997

Number of Scheme:	21238
Name of Scheme:	Natchez
Address of Scheme:	87 Springwood Road SPRINGWOOD QLD 4127

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

Michael Timothy Golden, trading as Logan Body Corporate Service, the body corporate manager for “Natchez” community titles scheme 21238



I hereby order that the application for an interim order that resolutions purportedly passed in respect of motions 1, 3, 4 and 5 at the extraordinary general meeting held on 12 August 2000 be ruled invalid, is dismissed.

I further order that resolutions purportedly passed in respect of motions 6 and 7 at the extraordinary general meeting held on 12 August 2000 were at all times void.

STATEMENT OF ADJUDICATOR’S REASONS FOR DECISION - REF 0465-2000

“Natchez” CMS 21238

The applicant, Michael Timothy Golden trading as Logan Body Corporate Service, has sought the following order of an adjudicator under the Body Corporate and Community Management Act 1997 (the Act), quote -

That resolutions 1, 3, 4, 5, 6 and 7 of the extraordinary general meeting held on 12/8/2000 be ruled invalid and the position of chairperson be declared vacant at once.

The applicant has also sought the following interim order of an adjudicator, quote -

That resolutions 1, 3, 6 and 7 of the extraordinary general meeting held on 12/8/2000 be ruled invalid as a matter of urgency as the chairperson has notified the applicant that he has until today to deliver to her all the body corporate records.

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. An adjudicator’s order may contain ancillary or consequential provisions the adjudicator considers necessary or appropriate (section 230(1)).

In the supporting grounds, the applicant states that during the lead up to the extraordinary general meeting held on 12 August 2000, the chairperson circulated false information to the owners in an attempt to influence their vote. The applicant also provides some additional historical background to this scheme, although I consider much of the material to be irrelevant to the orders sought.

The body corporate committee was invited to respond to the application. A submission was received from Herd & Janes, Lawyers, on behalf of the committee. A further submission was also received from Mr Peter Buddis, a committee member.

Herd & Janes submitted that the application should be dismissed on the basis that the applicant has no standing to bring such an application under section 182 of the Act. Herd & Janes further submitted that the applicant is the secretary and treasurer for the scheme, and this is not one of the categories specified under section 182 as a party to a dispute. Herd & Janes further submitted that, even if the application were to be amended to provide for the body corporate manager, Logan Body Corporate Service, to be the applicant, it should still be dismissed, as a body corporate manager does not have standing to bring an application against a body corporate in respect of motions passed by the body corporate in general meeting. It was Herd & Janes view that a body corporate manager’s ability to seek an order is limited, amongst other things, to a claimed or anticipated contravention of the terms of, or the termination of, the engagement of a person as a body corporate manager.

Herd & Janes further submitted that, in the event the arguments concerning standing were not accepted, then the applicant had not provided any legal ground as to why motions 1, 3, 6 and 7 considered at the extraordinary general meeting held on 12 August 2000 should be ruled invalid. Herd & Janes then recited background material to assist me in my deliberations. I do not propose to set this material out in detail, as it is well known to the parties.

Mr Buddis also provided background material in his submission, and concluded that the performance of the applicant has deteriorated over the past 12 months to such an extent that it is not in the interests of the scheme to have the applicant associated with its management.

The applicant responded to both submissions, and claimed that neither one had refuted his allegations.

I note that the notice of meeting for the extraordinary general meeting held on 12 August 2000 was forwarded to all owners on 19 July 2000, thereby complying with the notice required under section 43 of the Standard Module. I also note that the agenda of the meeting included 5 motions upon which owners were able to vote. Motions 6 and 7, however, were not included on the agenda of the meeting.

Section 42 of the Standard Module requires that the notice of meeting, in addition to stating the time and place of the meeting, must also contain an agenda, which, in turn, under section 45, must include the substance of motions to be considered. Accordingly, motions 6 and 7 should not have been put to the meeting. Quite apart from anything else, any owner who has submitted a voting paper is clearly disenfranchised if a motion is put to the meeting, without having been included on the agenda. I therefore propose to order that the resolutions purportedly passed in respect of motions 6 and 7 were at all times void.

Turning to the remainder of the application, I am satisfied, firstly, that the applicant does have the standing to bring this application, as the agreement for the services of the body corporate manager is between the body corporate and Michael Timothy Golden and Helen Ruth Golden trading as Logan Body Corporate Service. Secondly, two of the motions in respect of which orders are sought relate to the termination or retention of the services of the body corporate manager. It is common ground that the body corporate manager is retained by the body corporate on a month to month basis. In these circumstances, the agreement may be terminated by the body corporate resolving to do so by ordinary resolution at a general meeting. The committee purported to terminate the services of the body corporate manager by resolving to do so at a committee meeting held on 3 April 2000. As has already been determined in Application 0243-2000, that decision was invalid. Following that decision, the committee resolved at a meeting held on 12 July 2000 to propose a motion at the extraordinary general meeting held on 12 August 2000 to terminate the services of the body corporate manager. The applicant was present at that meeting, and can therefore be taken to have been put on notice that his services, and those of Logan Body Corporate Service, were liable to be terminated if the motion was carried, which it subsequently was.

I am not satisfied that the applicant has provided any grounds upon which I could order that the resolutions in respect of motions 1 and 3 should be overturned. Motion 1, to terminate the services of Logan Body Corporate Service, was carried by 34 votes to 14. Motion 3, to retain the services of Logan Body Corporate Service, was defeated by 33 votes to 12, with 3 abstentions. The applicant has not alleged any irregularity in relation to the calling of the meeting, or of the voting. Although the minutes reveal that certain owners who were unfinancial were allowed to vote, the applicant informed me by telephone on 11 September 2000 that there were only 4 unfinancial voters, and their vote would not have altered the outcome on any of the motions. I therefore propose to dismiss the application insofar as it relates to motions 1 and 3.

The body corporate should note, however, that an owner who is unfinancial does not have the right to exercise a vote for a particular lot on a motion (other than a motion for which a resolution without dissent is required) or to choose a member of the committee (see section 49(11) of the Standard Module).

As to motions 4 and 5, I do not consider that a body corporate manager has any legislative basis upon which to challenge a motion carried by the body corporate in general meeting, when the motion deals with matters unrelated to the terms and conditions of the body corporate management agreement (section 223(1)(c)(i)). I therefore propose to dismiss the application insofar as it relates to motions 4 and 5.

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. If the parties consider that an appeal of this decision is warranted, then they should appeal the interim order.