Nargoon Court [2000] QBCCMCmr 544 (24 October 2000)

PJ HanlyREFERENCE: 0329-2000

ORDER OF AN ADJUDICATOR

MADE UNDER PART 10 OF CHAPTER 6

BODY CORPORATE AND COMMUNITY MANAGEMENT ACT 1997

Number of Scheme:	11130
Name of Scheme:	Nargoon Court
Address of Scheme:	14 Beelyu Street BURLEIGH HEADS QLD 4220

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

Donna Gale LEE, the owner of Lot 1, Ian BUSH, the owner of Lot 5, and John Patrick ROCHE, the owner of Lot 6



I hereby order that the application by Donna Gale LEE, the owner of Lot 1, Ian BUSH, the owner of Lot 5, and John Patrick ROCHE, the owner of Lot 6, for an order that the body corporate call an extraordinary general meeting, and that the applicants be given an opportunity to claim for the costs incurred in maintaining the scheme and that they be given full financial disclosure, is dismissed.


STATEMENT OF ADJUDICATOR’S REASONS FOR DECISION - REF 0329-2000

“Nargoon Court” CTS 11130

The applicants have sought the following order of an adjudicator under the Body Corporate and Community Management Act 1997 (“the Act”), quote -

To inforce(sic) the call for extraordinary meeting, to be given the opportunity to claim for damages caused by the said neglect and claim for the money spent in returning the place to habitable condition, to enforce the request for full finacial(sic) disclosure.

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)).

Even though the body corporate has been named as the other party to the dispute, in the supporting grounds, the applicants claim that the secretary has neglected his duty regarding the maintenance of the property, has refused to account for the body corporate funds, has refused to convene a meeting when requested by members, has acted outsude his authority and has acted in a manner contrary to the interests of the body corporate members. The applicants have also stated that due to a lack of maintenance, the property became unsafe and unliveable, and that they decided to clean up the property and seek reimbursement from the body corporate.

A copy of the application was forwarded to the secretary for distribution to all lot owners (excluding the applicants) and to the committee. In his response to the application, Mr Stepanoff stated that he has not been given genuine receipts to substantiate the work performed by the applicants. He adds that this application is a consequence of the action he has taken against Ms Lee and Mr Bush for the non-payment of body corporate contributions. Mr Stepanoff counters the applicants’ assertions with references to unrelated by-law contraventions.

It is clear from the information provided by the applicants and by Mr Stepanoff that the parties involved in this dispute are not fully aware of the application of the Act and the Body Corporate and Community Management (Standard Module) Regulation 1997 ("the Standard Module") to the issues in dispute.

Section 32 of the Act provides that the members of the body corporate are the owners of all lots in the scheme. The body corporate has a general duty under section 114 of the Act to administer, manage and control the common property reasonably and for the benefit of lot owners. Specifically, section 109 of the Standard Module provides that the body corporate must maintain the common property in a good condition.

The applicants have claimed that the secretary has neglected his duty regarding the maintenance of common property, however, the legislation does not impose any such duty on the secretary. The obligation for the maintenance of common property rests with the body corporate, and in the absence of any evidence to the contrary, I do not find the applicants’ arguments against the secretary to be credible. Further, the applicants have not shown that they have sought reimbursement from the body corporate for the costs incurred in maintaining the common property. The secretary does not have the legislative authority to reimburse individual owners for their personal costs incurred in performing a duty of the body corporate. Such a decision rests with the committee or the body corporate in general meeting. The applicants should be referring their concerns regarding the maintenance of common property to the committee or to the body corporate in general meeting.

In addition, the applicants have stated that the secretary has refused to convene a meeting as requested by members. I have not sighted any documentation which indicates that the applicants have requested an extraordinary general meeting in accordance with section 61 of the Standard Module. If the applicants do request such a meeting and the secretary ignores the request, then the applicants would be entitled to lodge an application for an order of an adjudicator in respect of this matter. The secretary should note that a lot owner does not have to be “financial” to be a party to a request for such a meeting, and that the only restriction placed on an “unfinancial” lot owner is stated in section 49(11) of the Standard Module which relates to a person’s right to vote at a general meeting if a contribution is not paid to the body corporate at the time of that meeting.

The applicants have also stated that the secretary has refused to account for the fund of the body corporate. However, the applicants have not provided any substantiation of this statement. Section 105 of the Standard Module provides that the body corporate must keep proper accounting records, and prepare for each financial year a statement of accounts showing the income and spending of the body corporate for the financial year. A copy of the statement of accounts must accompany the notice of the annual general meeting held after the end of the financial year for which the accounts are prepared. The agenda for the annual general meeting must provide for the presentation of the accounts for the financial year. Further, the committee must prepare proposed administrative and sinking funds for adoption by the body corporate at each annual general meeting (see section 94 of the Standard Module). The body corporate and the committee have an obligation under these provisions of the Standard Module. I am not satisfied that the secretary has been delegated the duty to prepare these financial statements, and if he has, that he has not provided the relevant statements to an annual general meeting. If the applicants concerns relate to obtaining body corporate information during a given year, then they should refer to section 162 of the Act.

It would seem that either the applicants or the secretary are of the mistaken belief that the elected secretary has some control over the management of the body corporate. As I stated earlier, the body corporate consists of all lot owners. There must be a committee for the body corporate, consisting of at least three, but not more than seven persons. The committee is charged with the responsibility for the day-to-day administration of the body corporate. Section 103(1) of the Standard Module provides that the spending limit for the committee is the amount worked out by multiplying the number of lots included in the scheme by $100. Proposed expenditure exceeding this amount must be referred to a general meeting for authorisation. Further, the Act and the Standard Module prescribe the powers of the committee, the procedures for convening and holding committee meetings, and the information to be given to owners about committee meetings.

The person elected to the position of secretary is one member of the committee. The duties of the secretary prescribed in the Standard Module relate primarily to administrative functions such as calling general and committee meetings, inviting and receiving nominations for committee member positions to be filled at an annual general meeting of the body corporate, and receiving other documentation relevant to the convening of a general meeting. Certainly, the secretary does not have any legislative authority to make unilateral decisions on behalf of the body corporate. A body corporate decision is made in accordance with the Act and the Standard Module by the committee or by the body corporate in general meeting.

The applicants have named the body corporate as the other party to this dispute, yet they have not provided any grounds to support any claim against the body corporate. Their primary concerns relate to the actions of the secretary, and I have considered these claims. However, for the reasons given above, I am not satisfied that an order against the body corporate or the secretary is warranted, and as a consequence the application is dismissed.