Silva Lake [2001] QBCCMCmr 23 (17 January 2001)

P G DanielsREFERENCE: 0555-2000

ORDER OF AN ADJUDICATOR

MADE UNDER PART 10 OF CHAPTER 6

BODY CORPORATE AND COMMUNITY MANAGEMENT ACT 1997

Number of Scheme:	4380
Name of Scheme:	Silva Lake
Address of Scheme:	280 Christine Avenue STEPHENS QLD 4227

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

Angela Steele the owner of lot 3, Vera Edwards the owner of lot 4 and Gavan Parker the owner of lot 5

1. P G DanielsI hereby order that the engagement of Ian D Bloomfield Pty Ltd trading as Advanced Body Corporate Administration (Advanced) as body corporate manager for the Body Corporate for Silva Lake community titles scheme 4380 (Silva Lake) is void.

2.

I further order that Advanced can perform services on behalf of Silva Lake that are detailed in a document titled “Body Corporate Management Proposal for Silva Lake” that was forwarded with the notice of an extraordinary general meeting held on 6 October 2000 for three months from the date of this order.

3.	I further order that order 2 ceases to have effect if within three months from the date of this order:

a.	the Committee of Silva Lake resolves and gives notice to terminate the arrangement with Advanced due to any ground mentioned in section 86 of the Body Corporate and Community Management (Standard Module) Regulation 1997; or
b.	Silva Lake and Advanced or another body corporate manager enter into a valid contract for body corporate management; or
c.	A general meeting of Silva Lake occurs at which Silva Lake considers a motion or motions to engage a body corporate manager and does not resolve to pass a motion to engage a body corporate manager.1y

STATEMENT OF ADJUDICATOR’S REASONS FOR DECISION - REF 0555-2000

“Silva Lake” CTS 4380

The applicants, Angela Steele the owner of lot 3, Vera Edwards the owner of lot 4 and Gavan Parker the owner of lot 5, have sought the following order of an adjudicator under the Body Corporate and Community Management Act 1997 (the Act):

Declare the Extra Ordinary General Meeting of the Body Corporate called for on October 6^th 2000, void for irregularity.

The applicants also sought an interim order cancelling the meeting. I dismissed that application on 6 October 2000.

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 –

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)).

The Body Corporate for Silva Lake held an extraordinary general meeting on 6 October 2000 (the meeting). There were four motions on the agenda and voting papers relating to the engagement of four different body corporate managers. The meeting was called by the Secretary Valmai Johnes.

The minutes of the meeting show that Advanced Body Corporate Administration was approved by the Body Corporate. Advanced Body Corporate Administration is a trading name of a company named Ian D Bloomfield Pty Ltd. I will refer to Advanced Body Corporate Administration in my reasons.

The applicants have the following complaints about the meeting.

A quote from Body Corporate Administration that was forwarded with the notice of the meeting has the following words and figures on it:

“840.00 + GST
4 Comm. Meetings
@ say $120 480.00 + GST
__________
1320.00 + GST
132
___________
1452.00”

Valmai Johnes relevantly states the following about the matter in her submission, “The quote in question had calculations scribbled on it by R. Smith, immediate past Secretary/Treasurer to show the extra costs for committee meetings and G.S.T. that would need to be added to the price in order to make a fair comparison with the other quotes.”

The applicants allege that the alteration to the Body Corporate Administration quote was done without that manager’s authority or knowledge.

A proposal forwarded with the notice of the meeting was from Advanced Body Corporate Administration. Mr Bloomfield of Advanced Body Corporate Administration forwarded a letter dated 18 September 2000 to the Body Corporate C/- Mrs Dawn Griffiths that gives further information in respect of the proposal. The letter was forwarded to owners after the notice of meeting had been forwarded. The letter relevantly states:

“Further to our recently submitted quote for Body Corporate Management service for Silva Lake, I confirm the following:-

1)	quote includes attendance at 4 committee meetings and one annual general meeting per annum.

2)	quote includes for one extraordinary general meeting in the first year.

3)	An initial contract period of 1 year is acceptable. A 3% increase in fees would be applicable after the first year.”

Valmai Johnes wrote on the bottom of the letter the following, “Above amendment should be compared with calculations on back of BCA’s quote for price parity”.

The applicants state the following in respect of the letter, “This has given an unjust advantage over other submissions and should be rejected.”

In my view, the extra information which the applicants complain about, was given to assist owners in determining how to vote at the meeting. I do not accept that there was any attempt to mislead owners or unduly advantage a manager(s). I would dismiss the application in respect of the grounds that have been raised.

However, in the course of considering this matter it has come to my attention that the actual contracts with the proposed managers were not circulated with the notice of the meeting. In particular the contract with Advanced Body Corporate Administration was not circulated. I note that it is referred to in the proposal that was forwarded with the notice of the meeting. The failure to circulate the relevant contract is a contravention of section 87 of the Body Corporate and Community Management (Standard Module) Regulation 1997 which provides as follows:

Authority to make engagement or give authorisation

87.(1) The body corporate may engage a person as a body corporate

manager or service contractor, or authorise a person as a letting agent, only

if—

(a) the engagement or authorisation is approved by ordinary

resolution of the body corporate;17 and

(b) the terms of the engagement or authorisation are included in the

material forwarded to members of the body corporate for the

general meeting that considers the motion to approve the

engagement or authorisation.

(2) If subsection (1) is not complied with, the engagement or

authorisation is void.

(3) A body corporate may agree to the amendment of an engagement or

authorisation mentioned in subsection (1) only if the amendment is

approved by ordinary resolution of the body corporate.

(4) If subsection (3) is not complied with, the amendment of the

engagement or authorisation is void.

It should be noted that a contravention of section 87 can occur where all or some of the terms of engagement of a body corporate manager are not forwarded with the material for a general meeting. I suggest that in terms of section 87 it is a dangerous practice to forward to owners, after a notice of a general meeting has been forwarded, further material relating to the terms of engagement of a body corporate manager.

It will be observed that section 87(2) provides that a failure to comply with section 87(1) results in the engagement being void.

I have decided to consider the matter in this application so that the issue can be properly addressed rather than leave the Body Corporate in a state of uncertainty.

I conducted a teleconference with Mr Ian Bloomfield of Advanced Body Corporate Administration, Richard Smith, the Secretary and Angela Steele, one of the applicants on 17 January 2001. Mr Bloomfield informed me that there is no formally executed contract between the Body Corporate and Advanced Body Corporate Administration. He has performed various duties on behalf of the Body Corporate including the holding of an annual general meeting and the issuing of contribution notices.

The question that needs to be addressed is what “just and equitable” order should be made in respect of the matter: section 223 of the Act.

I will order that the engagement of Advanced Body Corporate Administration is void. However, I will make further orders taking into account the following matters. The manager has already performed services on behalf of the Body Corporate and acquired knowledge about the scheme. Additionally, there were least four owners (as at the date of the meeting) who wanted a body corporate manager engaged for this scheme. I take into account, from other applications, the level of conflict in the scheme.

I have decided to order that Advanced Body Corporate Administration can continue to perform services as detailed in the proposal forwarded with the notice of the meeting on behalf of Silva Lake for three months, subject to order 3. In that period, a further meeting can be held to properly engage a manager in accordance with all of the requirements of the Act and the Regulation. That is a matter for the Body Corporate to consider.