La Porte D'Or [2000] QBCCMCmr 539 (20 October 2000)

RA MeekREFERENCE: 0604-2000

INTERIM ORDER OF AN ADJUDICATOR

MADE UNDER PART 10 OF CHAPTER 6

BODY CORPORATE AND COMMUNITY MANAGEMENT ACT 1997

Number of Scheme:	12681
Name of Scheme:	La Porte D'or
Address of Scheme:	3422 Gold Coast Highway SURFERS PARADISE QLD 4217

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

Jeno Czinder and Beverley Czinder, the owners of lot 64

RA MeekI hereby order that all motions to be considered at the EGM of the body corporate for La Porte D’or to be held on 21 October 2000 which seek that the positions of certain members of the committee be vacated (the motions), shall be considered and voted on as if the motions did not refer to the position which the member formerly held on the committee.

I further order that the motions shall be considered and voted on as if the motions simply referred to the person the subject of the motions, as being a member of the committee, provided this is in fact still the case.

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STATEMENT OF ADJUDICATOR’S REASONS FOR DECISION - REF 0604-2000

“La Porte D'or” CMS 12681

The applicants Jeno Czinder and Beverley Czinder, the owners of lot 64, have sought an order of an adjudicator under the Body Corporate and Community Management Act 1997 (the Act) that nine (9) resolutions purportedly carried at a committee meeting held in Melbourne on 11 October 2000 dealing with the acceptance by the committee of the resignation by several members of the committee, and the consequent appoint of those same members, and one other, to different positions on the committee, effective from 19 October 2000.

The applicants have further sought the appointment of Mr Stephen Dring as administrator of the body corporate.

The applicants have sought the order “urgently” and have requested that the interim orders be made as final orders.

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 state that lot owners previously requisitioned an EGM of the body corporate, but the then secretary refused to convene the meeting. An application to this office resulted in the body corporate being ordered to convene a general meeting. The applicants continue –

The purpose of the requisitioned meeting was to consider motions to vote out the current committee and elect a committee that would comply with the Act and the body corporate’s wishes. The motions named the person to be removed and specify the position they hold in the committee.

After notice of the EGM called pursuant to the adjudicator’s order were circulated, the committee hastily called its own EGM to proceed the EGM for 18 October 2000.

The committee held a meeting in Melbourne on 11 October 2000.

At the meeting the committee considered certain resignations of current committee members, including Mr Munz (chairman and secretary) and Mr Thomas (treasurer). These resignations are purported to be effective from 19 October 2000 (the day after the EGM called by the current chairperson / secretary).

The committee then resolved to appoint certain other committee members to the executive positions. In essence, the committee has remained the same, merely exchanging titles. It is considered the sole purpose for this “shuffle of positions” is to rule the motions to remove the committee out of order on the basis the persons named in the motion no longer hold the position stated in the motion. This tactic by the committee is seen as not only frustrating the whole intent of the requisitioned meeting but also the order of the adjudicator.

The applicants later explains that the initial intent of the owners who were signatories to the requisition of meeting, and the purpose behind application 400 of 2000, on which certain owners were successful in obtaining an order that the body corporate convene a meeting was to –

... give the body corporate the opportunity to remove all members of the committee from office and to elect a new committee; a committee which would act in the interests of the majority of lot owners and abide by the (Act). ... Mr Munz’s shuffle however, if allowed to stand, will deprive the body corporate of this opportunity, and will frustrate the purpose of the adjudicator’s order.

The applicant’s have attached a copy of minutes of the committee meeting held on 11 October 2000 whereat the various resignations and consents to act were accepted. From those motions it seems that the following changes to the committee, effective 19 October 2000, have occurred –

• Mr Len Hillard, ordinary member, resigned;

• Mr Munz, chairperson and secretary, resigned, and appointed as ordinary member;

• Mr Bob Thomas, Treasurer, resigned, and appointed as chairperson;

• Mr Laurie Doorey, ordinary member, resigned, and appointed as treasurer;

• Mr Lance Fawcett, ordinary member, resigned, and appointed as secretary;

• Mr Ian Finlayson, appointed ordinary member.

The format of the motions included on the agenda of the EGM to be held on Saturday 21 October 2000 are as follows –

Position of chairperson - P Munz – ordinary resolution (submitted by requisitioned owners)

TO RESOLVE THAT Mr Munz who hold the position of Chairperson be removed from office.

I note that each motion to this effect (namely motions 2, 4, 6, 9, 11, 13 and 15) specifies the position which the person formerly held on the committee. In consequence of the motions resolved at the committee meeting, it would seem that motions 2, 4, 6, 11 and 13 are now technically incorrect. Whether or not such motions are rendered invalid is, I consider, not so clear.

This office has sought a submission from the committee regarding the interim order sought prior to the making of this order. I have available to me a submission from Mr Philip Munz, made in his individual capacity, and not as a representative of the body corporate. It is perhaps in issue that I should accept a submission on such basis, as I sought a submission from the committee, and specifically advised the time requirement, albeit short, for this to be provided. Mindful of the principles of natural justice, I have had regard to the submission of Mr Munz in making this order.

Mr Munz complains generally that he was given inadequate time to respond. Mr Munz’s criticizes the applicant’s solicitor for this. I note that the committee meeting which caused the applicants to make the application was only held on 11 October, 2000, and would have take some time to be notified to owners. Following this, owners would have needed to assess their position, and determine a course of action. The application was received by this office on the 17^th. Given this I consider that the applicant’s acted reasonably expeditiously. Further, I make no apology for the relative short period for submissions. This period was governed by the fact that the meeting in respect of which the application is being made is to be held tomorrow, and it is alleged that if an interim order is not made, then several consequences adverse to the interests of certain owners will prevail. In any event, an interim order may in fact be made without reference to any party.

Mr Munz’s states that the commissioner has not yet complied with section 194(1). I refer Mr Munz to the provisions of section 197 which clearly anticipate that an application might be referred to an adjudicator without the commissioner first having complied with the requirements of section 194, or for that matter, having sought submissions from all persons entitled to make submissions. The fact of the matter is that an interim order may be made ex parte, and, to my mind, is made in circumstances where it is necessary to preserve the status quo. A final order to resolve the dispute is then normally made at a later date.

Mr Munz next alleges that I do not have jurisdiction to make an order, as the applicant has not established a contravention of the Act. If the grounds alleged by the applicants have any basis whatsoever, then I suggest that if an interim order is not made, a potentially significant detriment to the rights of certain owners might arise. I consider than the Act does intend an adjudicator to have jurisdiction in such circumstances. Mr Munz might wish to allege this as a possible grounds of appeal, if he considers the same to be warranted.

I have then considered the part of the submission by Mr Munz which seeks to challenge the substantive grounds relied on by the applicants. I do not intend to set out these comments in any detail except to quote Mr Munz’s concluding comments –

The committee actions should be allow to stand because:

•	They are not a contravention of the Act;
•	Affected persons have not had the opportunity to respond to the Application;
•	The Application contains inaccuracies, and is based largely on supposition;
•	Consideration of this matter deserves more than a cursory glance at the material and comments provided by Mr Dring;
•	Until such time as the matter can be properly considered, the status quo must be maintained, that is, the motions should be allowed to stand;
•	If owners remain unsatisfied with the new committee, there are further remedies not covered in the application, including a properly constituted election at the forthcoming AGM.

Finally I note that Mr Munz states that if the application is successful, that he intends an appeal. A party has a statutory right of appeal of an adjudicator’s order, on a question of law. The possibility of appeal however does not concern me. Nor though will it intimidate me into determining any application in a way other than that which I consider to be “just and equitable” in the circumstances before me (see section 223).

What Mr Munz’s submission does not specifically address is the applicant’s allegation that the effect of the committee resolutions of 11 October 2000 will render several of the motions included on the agenda of the meeting of 21 October 2000 (specifically those seeking to vacate the committee positions of several current members) subject either to being ruled out of order by the chairperson, or alternatively, otherwise declared invalid for the supposed reason that at the time of the meeting they are incorrect, notwithstanding that they were correct at the time of inclusion on the agenda. This is really the whole point which the applicants are making. Mr Munz does state that until the matter is fully investigated, then the committee motions should be allowed to stand. Mr Munz’s does however make a very interesting comment in his submission, namely –

•	If owners remain unsatisfied with the new committee, there are further remedies not covered in the application, including a properly constituted election at the forthcoming AGM.

The new committee refers to the committee structure which came into effect on 19 October, 2000. In the circumstances, surely the above comment only serves to confirm the applicant’s contention, which forms the basis of this application. As I read it, Mr Munz’s above comment implies that he fully expects there to be no change in the committee in consequence of the consideration of motions included on the agenda of the meeting for 21 October 2000, since he states that if owners remain unsatisfied with the new committee, they will have further opportunities in the future to redress this, including the forthcoming AGM. Such expectation in my view could only be based on a knowledge or belief that the motions in question will fail, either because they are ruled out of order by the chairperson at the meeting, which ruling the owners present would have the opportunity to overturn, or alternatively, if the committee, on some basis (for example, that they are technically incorrect) determines not to allow the body corporate to consider the motions. This later option, though potentially without basis, would prevent the body corporate having the opportunity to overrule the chairperson’s ruling.

Based on all the above considerations, I have serious reservations regarding the purpose and intent of the resolutions of the committee carried at the committee meeting held on 11 October, 2000, particularly in respect of their effect on the validity of motions to be considered at the EGM on 21 October 2000. Though it has not been argued to me, I have real concerns whether the provisions of section 25 of the standard module permit a committee to act in the manner which it has, regarding appointments to the committee. If necessary, I will canvass this aspect in the final order to this application.

The applicant’s have sought that I invalid the committee resolutions of 11 October 2000 so far as they relate to the alleged re-arrangement of the committee, so as to preserve the validity or integrity of the motions to be considered at the EGM on 21 October, 2000. Further that I appoint an administrator. I consider that the interim orders as sought are final in their nature, and by necessity determine the matter. I consider I am not currently in a position to finally determine this matter. In contrast, Mr Munz seeks that until such time as the matter can be properly considered, the status quo must be maintained, that is, the motions should be allowed to stand. How though will this effect the validity of motions to be considered at the EGM on 21 October 2000. All parties have probably already formed some view regarding this.

In the circumstances, I intend to order that all motions to be considered at the EGM of the body corporate to be held on 21 October 2000 which seek that the positions of certain members of the committee be vacated (the motions), shall be considered and voted on as if the motions did not refer to the position which the member formerly held on the committee, but rather the motions shall be considered and voted on as if the motions simply referred to the relevant person as being a current member of the committee, provided this is still the case.

For example, motion 2, which I have set out above, should be read and construed as –

To resolve that Mr Munz, a current member of the committee, be removed from office.

I consider that the above interim order will have several positive consequences including –

• It will preserve the validity of the motions as submitted for inclusion on the agenda, and in addition, the very purpose of the meeting being convened at all;

• It will preserve the intent of the order made by an adjudicator in application 400 of 2000;

• It will prevent the chairperson, or any member of the committee for that matter, from seeking to rule the motions out of order, or otherwise invalid for reason of allegedly being technically incorrect;

• Further, I consider that this order will allow this body corporate to proceed as the legislation intended regarding this matter, rather than allowing the intent of the legislation to be frustrated, by the manoeuvrings of certain parties, as alleged by the applicants;

• Finally, I consider that if Mr Munz is correct in his statement that no improper motive should be ascribed to the re-arrangement of the committee as occurred at the committee meeting on 11 October 2000, then I consider that he, nor any other member of the current committee, could have any real objection to the terms of the interim order being made. It does seek to preserve the status quo, in that it seeks to prevent certain resolutions of a committee meeting occurring after an EGM had been convened, from affecting the determination of certain motions included on the agenda of that meeting.

This matter will now be investigated in accordance with the usual processes undertaken by this office. A final order regarding the application will be made in due course. However depending on the outcome of the meeting tomorrow, it may be that a final order to this application is not ultimately required.

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.

All parties should be aware of this section and its effect on this interim order. In particular, the applicant may need to request a renewal of the interim order, before a final order is made. The onus of renewing an interim order rests with the applicant. This office will not automatically renew an interim order. y