Discovery Court [2001] QBCCMCmr 598 (27 November 2001)

P J HANLYREFERENCE: 0362-2001

ORDER OF AN ADJUDICATOR

MADE UNDER PART 10 OF CHAPTER 6

BODY CORPORATE AND COMMUNITY MANAGEMENT ACT 1997

Number of Scheme:	23433
Name of Scheme:	Discovery Court
Address of Scheme:	18 Discovery Drive HELENSVALE QLD 4210

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

Graham Ross McDonald, the owner of lot 17


I hereby order that the application for an order to:

• Invalidate the body corporate annual general meeting held 26 April 2001

• Appoint Graham McDonald as chairman

• Appoint a new body corporate manager

• Reconvene an annual general meeting

is dismissed.

I further order that the body corporate shall within 1 month of the date of this order convene an extraordinary general meeting to adopt administrative fund and sinking fund budgets, and to fix contributions to the administrative fund and to the sinking fund.


STATEMENT OF ADJUDICATOR’S REASONS FOR DECISION - REF 0362-2001

“Discovery Court” CTS 23433

The applicant, Graham Ross McDonald, the owner of lot 17, has sought the following order of an adjudicator under the Body Corporate and Community Management Act 1997 (the Act), quote -

•	Invalidate the body corporate annual general meeting held 26 April 2001.
•	Appoint Graham McDonald as chairman.
•	Appoint a new body corporate manager.
•	Prepare a revised budget.
•	Reconvene an annual general meeting.

Section 223(1) of the Act 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)).

In the supporting grounds, the applicant states that the body corporate chairman, in conjunction with the body corporate manager, manipulated and miscalculated the 26 April 2001 annual general meeting voting process. In further correspondence attached to his application, he detailed the miscalculation, which resulted in motions 7-12 being declared as having been carried, when the voting results reveal that they should all have been defeated. The applicant also referred to the fact that certain votes were disallowed, which he considered to be further evidence of an attempt to manipulate the outcome of the meeting.

All owners and the body corporate committee were invited to respond to the application. Submissions were received from the body corporate committee and from three owners. Two of those owners supported the application, and the third owner, who is also the chairperson, opposed it.

The submission from the body corporate committee, through Herd & Janes, Lawyers, acknowledged that the voting on motions 7-12 was inadvertently counted incorrectly, but otherwise opposed the application. The submission concluded that the committee is prepared to call and hold an extraordinary general meeting to reconsider motions 7-12 on the agenda of the annual general meeting held on 26 April 2001.

The first of the orders sought by the applicant is the invalidation of the annual general meeting. He has not alleged any irregularity in the calling of the meeting, but relies on the error in relation to the voting on motions 7-12 to support his view. I do not propose to invalidate an entire meeting on this basis. Obviously, the voting results declared in relation to motions 7-12 are incorrect. The committee has acknowledged that fact, and has stated that it is prepared to hold a further extraordinary general meeting to reconsider those motions. I have ordered accordingly.

The applicant has also expressed concern that the votes for lots 1 and 9 were rejected because the voting papers were not delivered personally to the secretary. The committee advised that only the ballot paper for the election of the committee was rejected for lot 1, because it was not in the secret ballot envelope. As the owner of lot 1 was present in person at the meeting, she should have been afforded the opportunity to complete another ballot paper, as provided for in section 16(8)(a) of the Standard Module, which has general applicability in a situation where the body corporate has decided to conduct a secret ballot for committee elections, even though this scheme is regulated by the Accommodation Module. Notwithstanding the failure to allow the owner of lot 1 to complete a further ballot paper, the voting for chairperson would not have altered with the addition of one vote to either of the candidates for that position.

The voting paper and the ballot paper for lot 9 were rejected on the basis of the decision of Robin DCJ in Body Corporate for Surfers Waters CTS 20377 v Angland [2000] QDC 34 (10 March 2000) in which His Honour held that the word “personally” in section 51(2) of the Standard Module (as applied in that case), (section 49(2) of the Accommodation Module applies in this case), meant that the owner was required to personally give the voting paper to the secretary, and that voting papers delivered by a third party(in that instance, by the son of the resident manager) were therefore invalid. Accordingly, the chairperson was entitled to reject the voting paper and the ballot paper for lot 9.

The voting paper and the ballot paper for lot 23 were forwarded to the secretary by post, as is permissible under the regulation module, and were accepted accordingly. I have noted that the owner of lot 23 requested the chairperson to check the forms to ensure that she had completed them correctly. The chairperson stated in his submission that the owner of lot 23 had already decided how she wished to vote, and that he simply checked the forms as requested by her, and then placed the forms in their respective envelopes, and posted them to the secretary. I do not propose to invalidate the vote or the ballot paper for lot 23 on this basis.

The applicant has also sought an order that this office appoint a new body corporate manager. This office does not appoint body corporate managers. That is the province of the body corporate, and was dealt with at the meeting in question. The applicant has not provided any reason for seeking an order that the appointment made at that meeting was invalid, apart from stating that the entire meeting should be invalidated. The motion proposing the appointment included a copy of the administration agreement; the fee for the 12-month appointment did not exceed the limit for major spending, so an alternative motion with another quote was not required; the motion was an ordinary resolution and it was carried. I do not propose to make the order sought.

The applicant has also sought an order that the body corporate prepare a revised budget. The applicant provided no reasons for seeking such an order, other than to say in his covering letter that owners are attempting to “redress excessive body corporate costs”. The committee pointed out in its submission that this is a relatively small scheme, which has a resident manager, and therefore owners are responsible for all costs associated with such an engagement. The committee further stated that it considered the budgets presented to the meeting were fair and reasonable, based on past expenses and anticipated future expenses. The requirements for budgets are set out in section 92 of the Accommodation Module. In particular, section 92(3) deals with the sinking fund budget, and the need to reserve an appropriate proportional share of amounts necessary to be accumulated to meet anticipated major spending over at least the next 9 years after the financial year in question.

As noted above, I have ordered that an extraordinary general meeting be held to reconsider the budgets and fix contributions. It will be a matter for owners to decide at that meeting whether they regard the budgets as satisfying the requirements of section 92. I do not propose to make an order that the body corporate prepare a revised budget, although the committee may well decide to provide explanatory notes to the budget motions at the further meeting, which I have ordered.2n