Wishart Village [2000] QBCCMCmr 479 (22 September 2000)

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

RA MeekI hereby order that the application by Wei-Xin Chen, the owner of lot 6, and resident / letting agent for orders, quote -

An application pursuant to section 193(3)(b) of the Act that the Adjudicator waive the non-compliance with section 193(2) of the Act and extend time for the hearing of the application;
A declaration that from on or about 31 December 1998 there was no properly constituted body corporate for Wishart Village CTS 19482;
A declaration that all purported decisions / resolutions of the said body corporate make subsequent to 31 December 1998 be declared ultra vires and invalid and in particular that resolutions made at the EGM of the body corporate for Wishart Village on 26 October 1999 that the letting agreement and management agreement between Wei Xin Chen and the body corporate be terminated be declared invalid;
An order that all arrears payable by the body corporate to the application under and pursuant to the management agreement dated 6 November 1993 be paid to the applicant forthwith,

is dismissed.

The above order was appealed to the District Court at Brisbane. The appeal no is:
D4080/2000. n

The applicant Wei-Xin Chen, the owner of lot 6, and resident / letting agent has sought the following order of an adjudicator under the Body Corporate and Community Management Act 1997 (the Act), quote -

Section 223(1) 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 –

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)).

Both parties have requested that the issues in dispute, which were first raised in application 0367-2000 be dealt with as part of this application. I approve of this approach, although it should be noted that application 0367-2000 was dismissed for the reasons set out in that order. If either party is aggrieved by the terms of that order then they should consider their appeal rights relative to the decision set out in that order.

In this application, the applicant raises the issue of the validity of an EGM convened and held by the body corporate on 3 August 1999 (the meeting). The meeting was previously the subject of an application by the body corporate (0519-2000) which sought to ratify the motions passed and election of the committee at the meeting. On 2 December, 1999 that application was dismissed by myself.

The body corporate submission seeks that, on the basis of my having been the adjudicator in application 0519-2000, that it would be unjust that I “adjudicate over the present applications given that it is (my) 1999 decision which will need to be considered”. In the circumstances, the body corporate requested that a different adjudicator be appointed. I do not intend to disqualify myself from adjudicating the current application. The decision in application 0519-2000 has no bearing on the determination of the current application, except to the very limited extent that it suggested to the parties that “the meeting should be presumed valid, notwithstanding possible irregularities in it having been convened, subject to an application seeking to declare the meeting, or aspects of it, invalid”. The current application is such an application, and given this, it will now be considered on its merits. In my reasons for the order made in application 0519-2000, I stated as follows –

Essentially what has occurred is that a meeting has been convened and held, which the body corporate now seeks to ratify by order of an adjudicator. Ostensibly correct procedures in convening the meeting have been following, although I have not considered this aspect exhaustive, and therefore do not warrant that this is in fact the case. The notice of meeting purports the meeting to be an EGM (not an AGM) and therefore the meeting might have been convened at any time. The Act does not prescribe any time frame for the calling of EGM’s. Notwithstanding that it purports to be an EGM, the meeting then proceeded to deal with matters normally reserved for an AGM including the election of committee members, and the raising of contributions.

The method provided in the Act for a body corporate to re-constitute itself is by application to this office for an order appointing an administrator who is then authorised to convene a meeting of the body corporate. Often the basis for such an application is that the body corporate has missed the deadline for calling its AGM (ie. its financial year end date) before which the body corporate should have commenced certain procedures, including calling for nominations (for committee elections) and submission of motions (for inclusion on the agenda).

The body corporate however has proceeded to convene a meeting without the authorisation of an order of an adjudicator, and following the meeting, has sought ratification of the motions carried and of the committee elected. I do not consider that it would be prudent to make such an order. Such an order would effectively ratify all procedures taken in convening the meeting, and would effectively preclude a future application seeking to invalidate the meeting. This is a right clearly contemplated under the Act. In the circumstances, I consider the view should be taken that the meeting should be presumed valid, notwithstanding possible irregularities in it having been convened, subject to an application seeking to declare the meeting, or aspects of it, invalid.

There is some certainty for the body corporate in adopting this approach, given that applications for invalidation of motions / meetings are required to be made within three months of the meeting (which time period has now passed), and further, the fact that this office will not invalidate a meeting based merely on a minor irregularity. Rather, this office will take into account the circumstances of the meeting, the way it was convened, the irregularity alleged, and its effect on the rights and obligations of owners.

In its submission which opposes the application, the body corporate refers to the statutory time limits imposed on certain applications by section 193 of the Act. That section provides as follows -

ú
Time limit on certain applications
193.(1) This section applies to an application for an order declaring void—
(a) a meeting of the committee for the body corporate, or a general meeting of the body corporate; or
(b) a resolution of the committee or body corporate; or
(c) the election of an executive or other member of the committee.
(2) The application must be made within 3 months after—
(a) if subsection (1)(a) applies—the meeting; or
(b) if subsection (1)(b) applies—the meeting at which the resolution was passed or purported to be passed; or
(c) if subsection (1)(c) applies—the meeting at which the executive or other member was elected.
(3) However, if the making of the application does not comply with subsection (2)—
(a) the commissioner must deal with the application (including making a case management recommendation for the application) as if the making of the application complied with subsection (2); and
(b) an adjudicator to whom the application is referred for specialist or department adjudication may, for good reason, waive the non-compliance.

Firstly, the applicant seeks a declaration that as from the end of 1998, there was no properly constituted body corporate for the scheme. There is no basis for such a declaration to be made. A scheme comes into existence by virtue of registration of the plan, and is constituted by the owners of all lots. There is no subsequent or additional requirement that a meeting or meetings be held in order for the scheme to exist. The legislation does require that meetings of the scheme be held, however the failure to convene and hold these meetings does not mean that a “properly constituted” body corporate does not exist. The body corporate might not be operational due to the failure to elect a committee, to hold meetings, and to establish contributions, but it is nevertheless legally constituted.

Secondly, the applicant seeks to invalidate the meeting. This is the converse of what was sought by the body corporate in application 0519-2000. In the order to that application, it was stated that the validity of the meeting would be determined on the application of a party seeking to have the meeting, or aspects of it, declared invalid. The reasons specifically referred to the existence of time limitations on such an application being made (see final paragraph). The order in application 0519-2000 was made on 2 December 1999. Notwithstanding this, the applicant waited a further 8.5 months approximately before making the current application. The total period which elapsed from the date of the meeting to the making of the application was approximately 11.5 months. Section 193 of the Act provides a limitation period of 3 months. The qualification to this is if the adjudicator, for good reason, determines to waive the non-compliance.

The applicant’s grounds do not disclose any reason for the non-compliance with the time limit.

In the decision of Judge Dodd of the District Court in John William Weeks v. the Commissioner for Body Corporate, his Honour stated -

As to waiving compliance for good reason ... the objects of the Act, for instance section 5(a) and (h) mitigate against too strict or legalistic a view about good reason for waiving non-compliance with the time limit. What will be required is a balancing of the length of the delay; the reason for the non-compliance; the effect of delay on others who are affected by the matter in dispute and importantly, whether apart from the question of non-compliance with the time requirement, an applicant will be entitled to the relief sought.

The question is whether I consider there is good reason to waive the non-compliance.

I now turn to what Judge Dodd considers the most important criteria. This appears to involve a merits assessment of the application; namely excepting the delay, whether the applicant would ordinarily have been entitled to the relief sought.

The grounds relied on by the applicant are very limited. Essentially the grounds simply allege that the body corporate for the scheme was not properly constituted, and that therefore all decisions made by the body corporate after 1 January 1999 are ultra vires and invalid. I have already dealt with this issue of the body corporate being “properly constituted” above. I consider that the applicant’s grounds for alleging that the meeting held on 3 August 1999 was invalid, are without merit, and would be dismissed. Given this, I consider it likely that the applicant would not be entitled to the relief sought. In the circumstances, I find that there is not good reason to waive the non-compliance with time limits and I therefore decline to do so. This application is dismissed.

Number of Scheme:	19482
Name of Scheme:	Wishart Village
Address of Scheme:	28 Stackpole Street WISHART QLD 4122

Queensland Body Corporate and Community Management Commissioner - Adjudicators Orders

Wishart Village [2000] QBCCMCmr 479 (22 September 2000)