Kings Row South [2001] QBCCMCmr 1 (3 January 2001)

C G YOUNGREFERENCE: 0714-2000

INTERIM ORDER OF AN ADJUDICATOR

MADE UNDER PART 10 OF CHAPTER 6

BODY CORPORATE AND COMMUNITY MANAGEMENT ACT 1997

Number of Scheme:	11397
Name of Scheme:	Kings Row South
Address of Scheme:	18 Commodore Drive PARADISE WATERS QLD 4217

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

Ian Geoffrey LEES - owner of Lot 23, Gardan Pty Ltd, A.C.B. 011 064 494, representative John FARREN-PRICE - company owner of Lot 51, and Gerald Peter BURNS – owner of Lot 65,


C G YOUNGI hereby order that the application for an order - 2y

1. That the Extraordinary General Meeting of the Body Corporate for Kings Row South Community Titles Scheme 11397, held on 5^th December 2000, be declared invalid.

2. That the Secretary be directed to convene a new Extraordinary General Meeting, correctly documented, including a current version of meeting procedure and voting rights.

3. That the Secretary be ordered to distribute to all Body Corporate members complete copies of all Adjudicators Orders including the “Statement of Reasons for Decision”, made against the Body Corporate since the last general meeting.

4. That the Secretary be ordered to remove from the voting papers all unauthorised explanatory notes and any reference to potential legal action against the Body Corporate if certain voting procedures are not followed.

5. That the Secretary be ordered to destroy any unauthorised voice recordings taken at the Extraordinary General Meeting,

is dismissed.
STATEMENT OF ADJUDICATOR’S REASONS FOR DECISION - REF 0714-2000

“Kings Row South” CTS 11397

The applicants, Ian Lees, John Farren-Price for Gardan Pty Ltd, and Gerald Burns of Lots 23, 51 and 65 respectively, have sought the following order of an adjudicator under the Body Corporate and Community Management Act 1997 (“the Act”), quote -

1. That the Extraordinary General Meeting of the Body Corporate for Kings Row South Community Titles Scheme 11397, held on 5^th December 2000, be declared invalid.

2. That the Secretary be directed to convene a new Extraordinary General Meeting, correctly documented, including a current version of meeting procedure and voting rights.

3. That the Secretary be ordered to distribute to all Body Corporate members complete copies of all Adjudicators Orders including the “Statement of Reasons for Decision”, made against the Body Corporate since the last general meeting.

4. That the Secretary be ordered to remove from the voting papers all unauthorised explanatory notes and any reference to potential legal action against the Body Corporate if certain voting procedures are not followed.

5. That the Secretary be ordered to destroy any unauthorised voice recordings taken at the Extraordinary General Meeting.

The applicants have not specified any final order though, upon inspection, all of the above orders are final in their determination of the issues raised and therefore are final orders, and consequently there are really no orders of an interim nature being sought.

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)).

For the reasons that follow, I am not of the opinion that the circumstances warrant even an “implied” interim order being made, for example, that the resolutions of the 5 December meeting not be acted upon until the validity of the meeting is determined. However I consider that it is in everyone’s interest for the matter to be resolved promptly by order, as has been done in respect of another application concerning this same meeting, namely Application 705-2000. I have already issued Interim Order 705-2000 dismissing that application. It appears to me that this application has been lodged as a second attempt by a group of owners opposed to the current committee, to reverse the decisions made at the meeting – certainly the other applicant, Mr Keith Smith, has stated in writing that the three applicants to this application have said they would withdraw their application if his was successful. Following the issue of Order 705-2000, an amendment to this application was soon afterwards forwarded to this office – I have treated it as part of the grounds in determining this application.

The respondent nominated by the applicants in the application is, “The Secretary of the Body Corporate”. Section 182 of the Act prescribes the various parties who may constitute a dispute within the jurisdiction of an adjudicator, and the secretary is not a disputant recognised in the provision. From a reading of the application, the applicant should have nominated the body corporate as the other party to the dispute. In normal circumstances the applicant would be asked by this office to consider that amendment to their application, however as I intend to dismiss the application without further investigation the error is of no consequence.

I have determined that the application requires no further investigation as I do not consider that the applicants have provided information of such substance as would justify preventing the body corporate from proceeding with its business. I will set out my reasons separately in respect of each of the five orders sought. I would also refer the parties to the “Statement of Adjudicator’s Reasons For Decision” to Order 705-2000 which are included as part of these reasons by reference.

1.	That the Extraordinary General Meeting of the Body Corporate for Kings Row South Community Titles Scheme 11397, held on 5th December 2000, be declared invalid.

The grounds to the application include the central ground advanced by Mr Smith in his application, namely that the ten voting papers rejected by the chairperson as being delivered contrary to the provisions of section 51(2) of the Body Corporate and Community Management (Standard Module) Regulation 1997 (“the Standard Module”), should be admitted to the count and the motions be determined based on the adjusted votes.

I have set out comprehensive reasons in my order to that application as to why the decision of the chairperson to reject the voting papers should stand. I do not intend to repeat those reasons here but refer the parties to those reasons given to Order 705-2000, a copy of which is attached.

In a related issue, the applicants refer to the “Statement Regarding Meeting Procedure...” and appear to suggest that the information given is incorrect in regard to the delivery of written voting papers. The statement is comprised in an official form, Form BCCM 4 Version 1. It is not designed to exhaustively set out all of the regulations governing voting but is meant as a simple guide for owners. It refers to section 51 of the Standard Module as an example of the second guide-point, but there is nothing in the wording that contradicts the recent District Court of Queensland decision (“Surfers Waters” v M & G Angland, Appeal 761/99 of 10 March 2000) concerning the delivery of voting papers under that section (see my reasons to Order 705-2000). The applicants state that owners rely on the information provided by the committee and that information should be current. I assume this is a reference to the Court decision, with the allegation being that the secretary should have advised owners of the requirements regarding the delivery of voting papers. I have already addressed this point in my reasons to Order 705-2000 at page 4, “This argument doesn’t stand as neither the secretary nor the committee were under any duty to advise owners of the case and the potential pitfall in having voting papers delivered by a third party. There have been a number of adjudicator and court decisions that bear on voting and the committee has no duty in advising owners of these either. Owners must inform themselves as to the rules of voting, and in that regard I would point out that the Commissioner’s Office runs an Information Service including a Freecall telephone service, for owners.”

The applicants also refer to “intimidatory explanatory notes” included in the voting papers warning of “potential legal action against the body corporate” if owners voter in a certain way, but do not enclose a copy of those comments. It is a matter for the applicants to make out their own case and not for the adjudicator to obtain documents to assess the allegations they make. However, I would say that a warning by a committee of possible legal consequences if a motion is passed, or is not passed as the case may be, is not in itself intimidatory or unlawful. The legislation provides that owners are restricted to a 100 word explanatory note but is silent as to comments by the committee. In the absence of any restriction committee’s are free to insert their own comments, though I think some degree of legislative control should be considered as an amendment. The applicants also state that the committee minutes do not show where the committee resolved to make such comments and they conclude, therefore, that they must have been made unilaterally by the chairperson with the result that owners have been “seriously misled”. If, as the applicants are suggesting, the chairperson had inserted comments in conflict with the collective view of the committee, then I have no doubt that the committee would have met (perhaps by emergency flying minute) and taken measures to neutralise the chairperson’s action, probably by abandoning or adjourning the meeting with an amended notice of meeting. That did not happen. In any case, it is evident from documentation that the applicants have an adverse opinion of the committee as a whole, and therefore I find it difficult to accept that the applicants seriously believe that the comments are in conflict with the majority committee opinion.

The applicants also give hearsay evidence of a telephone conversation with the co-owners of two lots who allegedly voted in accordance with the committee’s suggestions in order to avoid the legal action warned of in its comments. I cannot accept that as evidence.

The applicants then allege that some owners were informed of the vote delivery requirements of section 51(2) as decided in a recent appeal decision of the District Court of Queensland, while other owners were not informed. No evidence was given in support of this statement except in the statement that, “Mr Lees’ voting paper was rejected, while Mr Farren-Price’s was accepted due to his presence at the meeting.” I think the reason for the difference in treatment of the voting papers is obvious; Lee’s relied on delivery by an intermediary contrary to section 51(2) while the vote of Mr Farren-Price was capable of ratification by him through his presence at the meeting.

The applicants also refer to two votes being added to the count after the meeting had ended. The minutes of the meeting contain a record that the proxies for Lots 53 and 60, though initially considered invalid, were later found to be valid and evidently included in the vote. Whether or not the votes are valid or invalid is a question of fact, however even if these votes should not have been included the effect on the voting on motions is such that there would be no alteration in the declarations made at the meeting as to whether a motion failed or passed. That is because there were no resolutions which had passed or failed on a vote of two votes or less. As the resolutions remain unchanged the point is of no consequence and nothing is to be gained in the determination of this application by pursuing the matter.

2.	That the Secretary be directed to convene a new Extraordinary General Meeting, correctly documented, including a current version of meeting procedure and voting rights.

This order would only be of relevance if I were to find the meeting of 5 December 2000 to be invalid and I have not done that. If there are matters which the applicants feel can still be decided, then of course section 61 of the Standard Module provides a means which allows at least 25% of the number of owners to bring on a meeting by serving a notice for a “Requested Extraordinary General Meeting” on the secretary.

3.	That the Secretary be ordered to distribute to all Body Corporate members complete copies of all Adjudicators Orders including the “Statement of Reasons for Decision”, made against the Body Corporate since the last general meeting.

This is a matter for the committee, or the body corporate in general meeting, to decide. It would only be in extraordinary circumstances that an adjudicator would make such an order. Of course there is nothing to prevent the applicants, or other owners, from sending copies of orders to other owners.

4.	That the Secretary be ordered to remove from the voting papers all unauthorised explanatory notes and any reference to potential legal action against the Body Corporate if certain voting procedures are not followed.

I have already determined this issue under Order “1” above.

5.	That the Secretary be ordered to destroy any unauthorised voice recordings taken at the Extraordinary General Meeting.

This order has nothing to do with the balance of the application which is aimed at the invalidation of the meeting. In any case, this is not a matter within the jurisdiction of an adjudicator and interested owners will need to seek private legal advice as to their position and possible cause of action.


SUMMARY:

In summary I would reiterate that the grounds to the application considered are those contained in both the original lodgement and a later undated lodgement received on 2 January 2001 (signed by one of the applicants, Mr Farren-Price on 31 December 2000).

The grounds consist of a series of allegations and some hearsay concerning a number of events relating to the meeting of 5 December 2000. The allegations are unsupported by any documentation or statements from any third parties mentioned. While this jurisdiction does not require applicants to have a knowledge of the legislation or to refer to precedents, it does require that applications seeking such a serious remedy as the invalidation of a meeting, especially one in which a number of contracts were decided upon, be supported by some prima facie evidence and in the least include copies of documentation put in issue. This application lacked all of these. Even so, had there been matters which may have been significant if proved true, and which would have justified the issuing of an interim order to prevent the body corporate from implementing the matters resolved at the meeting, then I would have sought additional information and submissions. However there were no matters of this nature present in the application and I have therefore dismissed the application.

It seems to me that the applicants have bundled a number of allegations together into an application in the hope that this office would conduct an investigation which would turn up some fundamental error or omission that would result in the meeting being invalidated. From my reading of a number of documents, including circular letters to owners, contained in Application 705-2000, there is a factional split amongst owners where emotional language and allegations serve to continue the division.
Both factions are undoubtedly convinced they are right and the result is applications of the type seen here, in Application, 705-2000 and in the rash of other applications lodged during the year 2000 (seven in all). While I can understand the applicant’s view in lodging this application, I would point out that this office does not have the resources to attend to a ongoing series of applications that reflect factional interests.

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 applicants are dissatisfied with the order then the legislation provides an avenue of appeal as outlined in the covering letter to this order.