La Porte D'Or [2001] QBCCMCmr 457 (16 August 2001)

C G YOUNGREFERENCE: 0481-2001

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 Porta D'or
Address of Scheme:	3422 Gold Coast Highway SURFERS PARADISE QLD 4207

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

Donjen Nominees Pty Limited, the owner of Lot 141,


C G YOUNGI hereby order that the application for the following interim orders –

A. “An Order declaring that the resolution of the Committee for the Body Corporate purportedly passed at the Meeting held on 9 June 2001 which resumed on 22 June 2001 calling for an Extraordinary General Meeting (“EGM”) is void.

B. An Order declaring that the calling of the EGM and all motions contained in the Notice of EGM are irregular, invalid and void.

C. An Order cancelling the EGM.

D. In the event that all or any of Orders A, B and C are made, then a further Order that the Committee of the Body Corporate distribute to all Lot Owners a copy of the Application, the Adjudicators Orders and Adjudicators Reasons for Decision.”

E. An order postponing the EGM to a date to be fixed by the Adjudicator but not before 30 September 2001”,

is dismissed.

I further order that the resolutions, if any, passed in respect of motions put to the extraordinary general meeting to be held on 18 August 2001, must not be implemented or otherwise acted upon by the body corporate, pending determination of the application by final order. 2n
STATEMENT OF ADJUDICATOR’S REASONS FOR DECISION - REF 0481-2001

“La Porta D'or” CMS 12681

The applicant, Donjen Nominees Pty Limited of Lot 141, has sought the following order of an adjudicator under the Body Corporate and Community Management Act 1997 (“the Act”), quote -

A. “An Order declaring that the resolution of the Committee for the Body Corporate purportedly passed at the Meeting held on 9 June 2001 which resumed on 22 June 2001 calling for an Extraordinary General Meeting (“EGM”) is void.

B. An Order declaring that the calling of the EGM and all motions contained in the Notice of EGM are irregular, invalid and void.

C. An Order cancelling the EGM.

D. In the event that all or any of Orders A, B and C are made, then a further Order that the Committee of the Body Corporate distribute to all Lot Owners a copy of the Application, the Adjudicators Orders and Adjudicators Reasons for Decision.”

The applicant has also sought interim orders in identical terms to the above orders, and the following additional interim order –

E. “An order postponing the EGM to a date to be fixed by the Adjudicator but not before 30 September 2001.”

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) of the Act).

Apart from Order D concerning a procedural matter, all of the orders sought by the applicant are directed against the holding of the extraordinary general meeting on Saturday 18 August 2001.

At the outset I wish to point out to the parties that it is not the policy of adjudicators to put a body corporate and owners to the expense and inconvenience of preventing meetings from proceeding, except in extreme circumstances. This is especially so in the case of large bodies corporate such as “La Porte D’Or” comprising 186 lots, where the number of persons who have made air and land travel arrangements, and perhaps other arrangements so that they or their proxy may attend the meeting, is often significant. The nearness of the meeting date, a matter of days in this instance, is another factor militating against the meeting being stopped.

However, where it is clear that a motion is wrong in law and there is evidence that the body corporate committee may act quickly to implement it, and it is a matter that cannot be reversed or cannot be reversed without significant difficulty or cost, then an order may require that the particular motion or motions not be dealt with, though the meeting may nevertheless proceed. Alternatively, an order may allow a motion to be dealt with at a meeting but if passed, cannot be implemented until the application is finally determined. These are options that, if applicable in the circumstances, are preferable to a blunt shutting down of a meeting, and these alternatives will be considered for the orders sought in this application.

I will also consider the applicant’s additional submission that the stopping of the meeting is justified on a separate ground; that the body corporate and the applicant have agreed to mediate certain differences existing between them on 11 September 2001, which touch on the substance of certain motions, and it is appropriate they not be decided by owners until after the mediation.

The applicant provided a copy of the application to the Body Corporate Manager, Astute Body Corporate Management (“Astute BCM”) which has made a brief submission to the application. Although the submission is not in response to an invitation by the Commissioner under section 194 of the Act, I intend to treat it in the same manner as a submission and consider it in my determination of the interim orders; had the copy not been provided by the respondent, one would have been provided by this office and a submission invited.

In this order I am solely concerned with the application for interim orders. Orders A to D are in the nature of final orders – that is, they seek a final determination of the respective issues raised. They are therefore not in the nature of an interim measure within the meaning of section 225 of the Act (see above). Order E is in the nature of injunctive relief, and given that the meeting subject of the order is impending, I believe that urgent circumstances exist and that an answer to the application for Interim Order E is appropriate.

I shall be considering the applicant’s grounds to the extent necessary to determine the interim order, that is, whether I should interfere in the holding and conduct of the meeting this Saturday. The grounds as submitted are under the following headings: Calling of EGM; Notice; Agenda; Motions; and all motions, Motions 1 to 15, either singly or in pairs.

Before dealing with the grounds, I wish to make a general observation about them. After reading the core narrative of ten pages and the large number of attachments, it seems to me that the quality of some of the grounds submitted suggests that the solicitor for the applicant has trawled through every procedure and document relating to the meeting to identify whatever minor irregularity, or possible irregularity, is present. Some of these could perhaps have been resolved directly with the committee rather being bundled into an application.

This approach is evident in the applicant’s initial grounds of “Calling of EGM; Notice; Agenda; and Motions”, all of which allege that statutory procedure for the calling of meetings has not been followed and therefore the meeting would be invalid if held. The applicant alleges the following –

• None of the persons capable of calling meetings under section 40 of the Body Corporate and Community Management (Standard Module) Regulation 18997 (“Standard Module”), actually called the meeting, nor could Dring as the representative of Astute BCM be authorised to do so as he is not a committee member.

• The committee should have decided the time, date and place of a meeting and should not have delegated the task to its Body Corporate Manager (Astute BCM).

• The notice of meeting is defective in that it does not specify who called the meeting.

• Section 45(1) of the Standard Module requires that the committee should have either prepared the agenda itself or, as it delegated this task to Astute BCM, should then have approved it.

• Section 45(2)(a) of the Standard Module has not been complied with in that the agenda does not show the “substance” of each motion – the wording opposite several motions is identical (identified as Motions 4,5,6,7,12 and 13).

• The committee did not approve the motions to be put to the meeting – it delegated the task of drafting them to Astute BCM but should then have considered and approved them.

The recorded involvement of the committee in the calling of the meeting is to be found in the minutes of the committee meeting held on 9 June and continued on 22 June 2001 –

“Calling an extraordinary general meeting

The committee decided there were enough issues (such as air-conditioning, fire hydrant pipe upgrade, part of a District Court order still outstanding, and the surveillance camera system) needing resolutions of the body corporate to warrant calling an EGM. Possible dates for the EGM were considered, noting that lot owners must be given six weeks notice of the EGM.

Resolved unanimously that an EGM will be called for a Saturday in mid August, at a venue to be arranged by Astute.

Resolved unanimously that Astute will draft the motions for consideration and circulate the necessary documentation to all lot owners at least six weeks before the EGM.”

In meetings of all kinds, including body corporate meetings, minor irregularities in procedure occur both in the calling of the meeting and in the conduct of the meeting. It is a well established practice of the Courts not to void meetings on the grounds of minor irregularities in procedure, provided members of the meeting group have not been disadvantaged in properly exercising their right to vote on the matters brought before the meeting. However, in regard to the matters raised here, there is no need for a resort to this principle to allow the meeting to proceed.

The minutes clearly show that the committee was in control of: the decision to call the meeting; the matters to be put to the meeting; and the timing and venue for the meeting. It even specified that a greater period of notice be given instead of the statutory minimum of 3 weeks (see section 43 of the Standard Module).

I have no doubt that the committee controlled the process and the meeting is of its making. In any case, if the product of any of the matters of procedure delegated to Astute BCM were either incorrect or not to the liking of the committee, then it would have been a simple matter for it to meet (it has six weeks to do so) and revoke the notice, or to amend the notice, in whatever way it saw fit. The covering letter accompanying the notice of meeting, not submitted by the applicant but supplied by Astute BCM, is dated 5 July, some 5 weeks ago, and there is no evidence before me of any such remedial action having been taken or contemplated by the committee.

However, I do need to assess whether any of the irregularities alleged by the applicant exist, and if so, whether they involve a fundamental breach of the legislation such that it would wrong in law to allow the meeting to proceed.

Firstly, the body corporate management agreement with Astute includes a delegation of the power of secretary. While the legislation in various parts emphasises the paramountcy of the committee and its executive members over a BCM with like delegated powers (see: section 10(2) of the Standard Module; sections 46(3) and 48(4) of the Standard Module; sections 67(2)(b) and 75(2) of the Standard Module; section 92(3) of the Act; and section 106(2)(b) of the Act), here there is no usurpation of the power of the secretary by Astute BCM issuing the notice of meeting, but of having issued it under its delegated power and acting on the authority, whether express or implied according to what was actually said at the committee meeting, of the secretary. As the decision of the committee was unanimous, and the secretary Coral Franke was present, it can be reasonably inferred that she authorised the service of the notice of meeting on owners, which Astute BCM then did as the delegated secretary. The comments of the committee for Astute BCM to “circulate the necessary documentation to all lot owners at least six weeks before the EGM” merely serve to confirm the arrangement.

The applicant’s next point, that it should have been the committee itself which determined the time, date and place of the meeting, is a trifle in light of the committee’s express instruction to Astute BCM for a “mid-August” date (it is to be held on 18 August), and for the “venue to be arranged by Astute”. Is the applicant seriously saying that the meeting will be invalid, and I should stop it, because Astute BCM decided the venue on the committee’s instruction, rather than the committee actually deciding the venue itself?

Further, in saying that the notice is defective as it does not specify who called the meeting, the applicant is presumably disregarding the covering letter to owners (which, as I have said, the applicant did not attach a copy of with other relevant documents) which is both signed by Dring for Astute BCM and, more significantly, states, “At a committee meeting concluded on 22 June 2001 the committee decided an extraordinary general meeting (EGM) was required to consider a number of important issues.” Again, this allegation is a triviality – the proper source of the calling of the meeting was evident in the covering letter.

Similarly, the applicant’s contention that the committee should have prepared the agenda itself must be assessed against the committee’s recorded actions. The committee mentions the following issues, “air conditioning, fire hydrant pipe upgrade, part of a District Court order still outstanding, and the surveillance camera system”. The motions on the agenda embrace all of these matters, and do not go beyond them. The committee expressly required Astute BCM to draft the motions for these issues and to circulate the necessary documentation. While it may have been prudent for the committee to view the finished motions, the matters subject of the motions appear to have been well debated and known to both the committee and Astute BCM and the committee’s view would have been known to its members and Astute BCM. Perhaps one or more committee members did review the motions, I do not know, nor do I need to know to determine this application for interim orders. I repeat my earlier opinion that had the drafted motions been incorrect of not to the committee’s liking, then it had ample time to have the offending matters, and indeed the meeting itself, altered in whatever way it saw fit.

Lastly, the applicant complains that section 45(2)(a) of the Standard Module has not been complied with in that the agenda does not show the “substance” of each motion, and that the wording opposite several motions is identical. The identical wording relates to motions containing alternative quotes for the same proposed work, for example, “Air Conditioning 18^th Floor” for both Motions 4 and 5. While it may have been more informative to include, for example, “first quote” and “second quote” against Motions 4 and 5 respectively, this is not a matter of notable omissions. The accompanying voting paper sets out the motions in full while the agenda is meant as a “single glance” document, showing owners the scope of a meeting. That the brevity of an agenda could be considered grounds for halting a meeting is absurd.

The remaining grounds refer to each of the 15 motions proposed to be dealt with at the forthcoming meeting. The applicant refers to various irregularities affecting each of the motions, claiming that if they were allowed to proceed to a vote then any resulting resolutions would be invalid for the relevant irregularity.

These allegations will require a comprehensive submission by the committee, perhaps others, and an appropriate investigation by this office.

However, I do not intend that the matter will remain in abeyance any longer than necessary and I propose to proceed to a final order to the application as soon as possible. I note that mediation between the applicant and the body corporate is to take place on 11 September 2001, however I do not believe, at least at this time, that my final orders should be delayed by this private mediation between one owner and the body corporate. However, given that the normal period for receiving submissions is three weeks, and a further two weeks is allowed for the applicant to respond to submissions, the final order will likely be made after the mediation in any case.

In regard to Order D, seeking copies of the order and reasons to be forwarded to owners, this is only ordered where the adjudicator considers that the matter is of such importance that owners should be notified directly of a decision; I do not consider that is necessary in this instance. I have no doubt the chairperson will inform the meeting of the effect of this order.

Although I do not foresee that the provisions of section 225(2) of the Act will be relevant in this instance, the parties should be aware of its provisions -

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, as this office will not automatically renew an interim order.













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