Brookchester Manor [2001] QBCCMCmr 51 (6 February 2001)

P G DanielsREFERENCE: 0034-2001

ORDER OF AN ADJUDICATOR

MADE UNDER PART 10 OF CHAPTER 6

BODY CORPORATE AND COMMUNITY MANAGEMENT ACT 1997

Number of Scheme:	9048
Name of Scheme:	Brookchester Manor
Address of Scheme:	17 Linning Street MT WARREN QLD 4207

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

Colin James Bennett a co-owner of lot 9



P G DanielsI hereby order that an extraordinary general meeting of the Body Corporate for Brookchester Manor community titles scheme 9048 held on 12 December 2000 is void.1n
STATEMENT OF ADJUDICATOR’S REASONS FOR DECISION - REF 0034-2001

“Brookchester Manor” CTS 9048

The applicant, Colin James Bennett, a co-owner of lot 9, has sought the following order of an adjudicator under the Body Corporate and Community Management Act 1997 (the Act):

To overturn a resolution at an extraordinary general meeting held on 12 December 2000 until another meeting can be called.

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 Brookchester Manor held an extraordinary general meeting on 12 December 2000 (the meeting). The meeting considered motions to approve the expenditure of funds for work and the raising of a special levy.

The applicant seeks the above order on the basis that a quorum was not present at the meeting. Section 48(1) and (2) of the Body Corporate and Community Management (Accommodation Module) Regulation 1997 (the Regulation) provide the requirements for a quorum at a general meeting as follows:

Quorum for general meetings [SM, s 48]

46.(1) A voter is taken to be present at a general meeting if the voter is

present at the meeting personally, by proxy or by written voting paper.

(2) A quorum at a general meeting is at least 25% of the number of

voters for the meeting, except that—

(a) if the number of voters for the meeting is 3 or more, 2 individuals

must be present personally; and

(b) if the number of voters for the meeting is less than 3, there is a

quorum if at least 1 individual is present personally.

It will be observed that there are two quorum requirements. There must be at least 25% of voters present personally, by proxy or voting paper. In this scheme of 60 lots that equates to 15 voters. Secondly, there must be 2 individuals present at the meeting.

A review of the minutes of the meeting indicates that only 12 persons voted. (If Ms Ruhle was unfinancial the number of voters was 11: section 47(11) of the Regulation). Only 1 voter was actually present at the meeting. Consequently, there has been a contravention of section 46 of the Regulation.

I will give consideration to the order that should be made. I take into account the following matters. The 25% quorum requirement is already quite low. The meeting considered important motions that imposed a financial burden on owners via the special levy. I have decided to make an order that the meeting is void.

The Secretary, D Baker has made a submission in respect of the application. He has emphasised the need for some work on scheme land to occur. Whilst it is important for a Body Corporate to discharge its maintenance obligations, this cannot occur where there has been a failure to comply with legislative requirements about the expenditure of money. Mr Baker has raised other matters in respect of his association with the Manager Dalreign Pty Ltd. It is unnecessary for me to comment on those matters in the context of the order sought and that I have made. The applicant has raised the prospect of a further meeting taking place at which various matters could be considered including the performance of the Manager. A requested extraordinary general meeting can take place pursuant to section 59 of the Regulation which provides as follows:

Requirement for requested extraordinary general meeting [SM, s 61]

59.(1) An extraordinary general meeting (a “requested extraordinary

general meeting”) of the body corporate must be called if a notice asking

for an extraordinary general meeting to consider and decide motions

proposed in the notice is—

(a) signed by or for the owners of at least 25% of all the lots included

in the scheme; and

(b) given to the secretary or, in the secretary’s absence, the

chairperson or, if the committee has not yet been chosen, given to

the original owner.

(2) The secretary may be presumed to be absent if a notice is given to the

secretary at the address for service of the body corporate, and no reply is

received within 7 days.

(3) A requested extraordinary general meeting must be called and held

within 6 weeks after the notice asking for the meeting is given.

(4) A requested extraordinary general meeting of the body corporate may

be called even though the body corporate’s first annual general meeting has

not yet been held.

I decline to make an order that an extraordinary general meeting be called. The legislation already provides a mechanism. If there is compliance with the requirements of section 59 and a meeting is not called, the matter can be addressed in a further application.

I do wish to bring to the attention of the Body Corporate that where a proposal involves spending above the limit for committee spending then it must be specifically authorised by ordinary resolution at general meeting: section 101(1)(a) of the Regulation unless 101(1)(b), (c) or (d) apply. Each proposal must be the subject of a separate motion.

Further, where a proposal involves spending in excess of the relevant limits for committee spending and major spending for the scheme, 2 quotes must be obtained and placed as alternative motions on the voting papers for the general meeting: section 102 of the Regulation.

I will set out sections 101, 102 and the definitions of “relevant limit for committee spending” and “relevant limit for major spending”. These terms are defined in the Schedule Dictionary of the Regulation.

Spending by committee [SM, s 103]

101.(1) The committee may only carry out a proposal involving

spending above the relevant limit for committee spending for the scheme

if—

(a) the spending is specifically authorised by ordinary resolution of

the body corporate; or

(b) the owners of all lots included in the scheme have given written

consent; or

(c) an adjudicator is satisfied that the spending is required to meet an

emergency and authorises it under an order made under the

dispute resolution provisions; or

(d) the spending is necessary to comply with—

(i) a statutory order or notice given to the body corporate; or

(ii) the order of an adjudicator; or

(iii) the judgment or order of a court.

(2) For this section, if a series of proposals forms a single project, the

cost of carrying out any 1 of the proposals is taken to be more than the

relevant limit for committee spending if the cost of the project, as a whole,

is more than the relevant limit.

(3) This section has effect subject to the requirements under this division

for spending that is above the relevant limit for major spending.

Quotes for major spending decided by body corporate [SM, s 104]

102.(1) This section applies if—

(a) a motion to be moved at a general meeting of the body corporate

proposes the carrying out of work or the acquisition of personal

property or services, including the engagement of a body

corporate manager or service contractor, but not including the

engagement of a service contractor who also is, or is to be, a

letting agent; and

(b) the cost of carrying the proposal into effect is more than the

relevant limit for major spending for the scheme.

(2) The lot owners must be given copies of at least 2 quotations for

carrying out the work or supplying the personal property or services.

(3) If the motion is proposed by the committee, the committee must

obtain the quotations.

(4) If the motion is not proposed by the committee, the person proposing

the motion must obtain the quotations and give them to the secretary.

(5) Copies of the quotations or, if voluminous, summaries of the

quotations and advice about where the complete documents may be

inspected, must accompany the notice of the meeting at which the motion is

to be considered.

(6) If, for exceptional reasons, it is not practicable to obtain 2 quotations,

a single quotation must be obtained and must accompany the notice of

meeting.

Example—

If goods to be acquired by the body corporate are obtainable from only 1 source, a

quotation for supplying the goods must be obtained from the source and circulated

with the notice of meeting. The fact that goods with the necessary characteristics

are only obtainable from a single source would be an exceptional reason for not

obtaining 2 quotations for the supply of the goods.

(7) Each quotation obtained under this section must be retained as an

attachment to the minutes of the meeting at which the quotation is

considered.

“relevant limit for committee spending”, for a community titles scheme,

means an amount worked out by multiplying the number of lots

included in the scheme by—

(a) if paragraph (b) does not apply—$100; or

(b) if the body corporate has by special resolution decided an amount

greater than $100 but not greater than $400—the amount decided.

“relevant limit for major spending”, for a community titles scheme,

means an amount worked out by multiplying the number of lots

included in the scheme by $200.

I do not know if the Body Corporate has passed a special resolution pursuant to paragraph (b) of the definition of the term “relevant limit for committee spending”. If such a resolution has been passed and it provides for expenditure greater than the “relevant limit for major spending”, then section 103 of the Regulation would apply. That section provides as follows:

Quotes for major spending decided by committee

103.(1) This section applies if—

(a) a motion to be moved at a meeting of the committee proposes the

carrying out of work or the acquisition of personal property or

services; and

(b) the cost of carrying the proposal into effect is more than the

relevant limit for major spending for the scheme.25

(2) Before the motion is decided, the committee must obtain and

consider at least 2 quotations for carrying out the work or supplying the

personal property or services.

(3) If, for exceptional reasons, it is not practicable to obtain 2 quotations,

a single quotation must be obtained and considered.

Example—

If goods to be acquired are obtainable from only 1 source, a quotation for

supplying the goods must be obtained from the source. The fact that goods with the

necessary characteristics are only obtainable from a single source would be an

exceptional reason for not obtaining 2 quotations for the supply of the goods.

(4) Each quotation obtained under this section must be retained as an

attachment to the minutes of the meeting at which the quotation is

considered.

I mention the above matters as I am uncertain whether the Body Corporate has complied with the legislative requirements at the meeting. I do not need to determine the matter as I have decided to make an order the meeting is void due to a failure to comply with the quorum requirements.

I have made a final order in respect of this matter. The application has been considered promptly given the nature of the matters raised.