Bayview Bay [2001] QBCCMCmr 419 (31 July 2001)

C G YOUNGREFERENCE: 0453-2001

INTERIM ORDER OF AN ADJUDICATOR

MADE UNDER PART 10 OF CHAPTER 6

BODY CORPORATE AND COMMUNITY MANAGEMENT ACT 1997

Number of Scheme:	6609
Name of Scheme:	Bayview Bay
Address of Scheme:	37 Bayview Street RUNAWAY BAY QLD 4216

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

Gregory Clark MARSH as nominee and principal of Gregory Marsh Holdings Pty Ltd A.C.N. 078 621 342, as the owner of Lot 53,



C G YOUNGI hereby order that the application for an interim order that the committee meeting held on 11 July 2001 be declared to be invalid and the resolutions purported to have been passed at that meeting authorising the assignment of management rights and the waiving of a transfer payment not be acted upon, is dismissed.

I further order that the secretary must forward a copy of this interim order and accompanying reasons to all owners with the “Notice Inviting Submission to an Application Lodged with the Commissioner” relating to this application.2n

STATEMENT OF ADJUDICATOR’S REASONS FOR DECISION - REF 0453-2001

“Bayview Bay” CMS 6609

The applicant, Gregory Marsh on behalf of Gregory Marsh Holdings Pty Ltd of Lot 53, has sought the following order of an adjudicator under the Body Corporate and Community Management Act 1997 (“the Act”), quote -

1. To set aside Resolutions passed at an 11^th July 2001 meeting of the Committee of the Body Corporate for Bayview Bay. Said resolutions relate to the Assignment of Management Rights and the waiving of Payment of Amount on Transfer of Management Rights.

2. To call an Extraordinary General Meeting of the Body Corporate to properly consider the matters referred to above and also to consider whether the Committee of the Body Corporate has always acted in accordance with the Body Corporate and Community Management (Accommodation Module) Regulation 1997 and in the best interests of the owners.

The applicant has also sought the following interim order of an adjudicator, quote -

An interim order is sought to determine the legality of a Body Corporate Committee meeting held 11 July 2001 and, in particular, the standing of Resolutions decided at that meeting. Further, if the Adjudicator finds that either the Committee Meeting or the Resolutions from that meeting were not legally in accordance with the Body Corporate and Community Management (Accommodation Module) Regulation 1997, then an interim order is hereby sought to prevent the enaction of those Resolutions by the Body Corporate.

Section 225(1) of the Act 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)).

The applicant has advised that an interim order is necessary as the assignment of the managements rights for the scheme is to be settled on 1 August 2001. In the circumstances, I consider that circumstances exist which requires the issue of an interim order prior to that date.

I would point out, however, that the short period of time available for me to make an interim order could have been considerably lengthened had the applicant acted immediately in submitting this application after learning of the committee resolutions. The application was received at this office on 23 July whilst the applicant, who denies having received a notice of meeting and does not nominate the date of receipt of the minutes of that meeting, should have received the minutes on 17 or 18 July as they were reportedly mailed on 16 July 2001.

In accordance with section 197 of the Act, a copy of the application was provided to the secretary and the committee was invited to make a submission to the issue raised in respect of the application for an interim order. A submission was received the same day, as requested in view of the time restraint, and will be taken into account in determining this application for an interim order.

The central argument of the applicant for invalidation of the committee meeting of 11 July, is that a quorum within the meaning of section 30 of the Accommodation Module regulations was not present.


His assertion is incorrect. Section 30 states –

ÿ

Quorum at committee meetings [SM, s 32]

30.(1) At a meeting of the committee a quorum is at least half the

number of voting members of the committee.

Examples of subsection (1)—

1. If there are 6 voting members of the committee, a quorum is 3.

2. If there are 7 voting members of the committee, a quorum is 4.

(2) For deciding whether there is a quorum—

(a) a voting member who is present—

(i) is counted as 1; or

(ii) if the voting member also has the proxies of 1 or more

absent voting members—is counted as 2; and

(b) a non-voting member who is present is not counted, whether or

not the non-voting member also has the proxy of an absent voting

member.

The persons present at the meeting were Favot, Kenyon, Powell and Withers, the latter also holding a proxy for Cust. All of these members, and the proxy donor, are voting members except for Favot who is the non-voting secretary and treasurer. Sub-section 2(b) requires that Favot not be counted in determining a quorum.

At the annual general meeting of 18 December 2000, the minutes show that the chairperson elected from the floor was Kenyon (following MacMahon’s immediate resignation), with Favot as the non-voting secretary and treasurer, and ordinary members, Cust, Khouri, Powell and Withers. It seems that no one was elected in replacement of Kenyon in the ordinary member position.

The number of committee voting members is therefore five (Kenyon, Cust, Khouri, Powell and Withers). Under the requirements of section 30(1), the number of members present must be at least three – this would have also been the requirement had Kenyon’s ordinary membership position been filled. The requirement was met by the attendance of Kenyon, Powell and Withers, without even considering Cust’s proxy. Once the quorum was established, the meeting was able to proceed and motions could be passed, even where, as in the case of the motions for assignment and transfer payment because of the conflict of interest provisions, all present were not able to vote. That is, the quorum must be established at the outset of the meeting and provided the quorum members remain at the meeting, motions can be dealt with even where a “quorum” of voters is not able to vote for certain individual motions.

The applicant is mistaken in his belief that the quorum requirement refers to voters on motions whereas in fact it relates to the meeting. It may seem a strange requirement to some, including myself, however that is the clear interpretation of section 30 of the Accommodation Module.

The other important argument raised by the applicant concerning the validity of the committee meeting, is that owners were not notified of the meeting in accordance with the requirements of section 26(2)(b) of the Accommodation Module.

In evidence of this assertion, the applicant has submitted that neither he nor at least three other lot owners (Lots 3, 17 and 32) received notification – he also states that the owner of Lot 45 is uncertain of having received notification, as she has no notice in her files. Additionally, he has submitted a copy of a letter from the owner of Lot 16 in which she states not having received notice of the meeting. The applicant has obtained this information after contacting the owners concerned.

In the submission of the secretary, Irene Favot, she states that notification of the committee meeting was sent to all owners. She has forwarded a copy of her administrative assistant’s diary of all mailings for the period 26 June to 24 July which shows the entry “Bayview Bay (Comm Meet Notice) 11/7/01” against the date of 2 July 2001. She states that the address labels are run off from the scheme’s computer database and therefore no lot was overlooked, as may be the case in a manual addressing system. She has no explanation for notifications not being received except that of the postal system.

I am unaware of how many owners the applicant has contacted to obtain details of the 5 or 6 (including himself) owners who state they received no meeting notice. In order to offer more credible evidence, if it exists, the applicant should have attempted contact with all or a sizeable number of owners, if he has not already done so.

That is not to say that the evidence is not of value – the failure to receive notices by 5 or 6 owners is, if verified, disturbing, and at least indicates that further investigation should be made. This will be achieved by a notice to all owners from this office, along with a copy of this order, before a final order is made in the matter.

However, on the basis of the statements of two owners and the alleged statements of 3 or 4 other owners, and the evidence supplied by the secretary, I am not prepared to issue an interim order to prevent the execution of contracts of considerable commercial value, especially on the day before they are to be executed.

The applicant has raised other matters, including the Deed of Variation voted upon on 18 December 2000, and the behaviour of the committee in consideration of the general interests of owners. In regard to the former I would point out that the resolution is now over 7 months old and must be viewed against the time limitation provisions of section 193 of the Act, while the latter issue may or may not expose some failings of the committee, but in any case may not lead to any useful conclusion.

However, these are matters that will be left to be determined by final order to the application after submissions are sought from owners and a further submission is sought from the body corporate committee on all of the issues raised in the application.

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.2n