York Mews [2001] QBCCMCmr 620 (10 December 2001)

RA MeekREFERENCE: 0704-2001

INTERIM ORDER OF AN ADJUDICATOR

MADE UNDER PART 10 OF CHAPTER 6

BODY CORPORATE AND COMMUNITY MANAGEMENT ACT 1997

Number of Scheme:	24280
Name of Scheme:	York Mews
Address of Scheme:	7 York Street NUNDAH QLD 4012

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

Body Corporate for York Mews


RA MeekI hereby order that the notice of extraordinary general meeting of York Mews Body Corporate purportedly issued by the body corporate manager, Premier Body Corporate Management proposing a meeting for 9:30 am on Saturday 15 December 2001 at the office of the manager, is invalid and of no effect.

I further order that this notified meeting shall not proceed.

I further order that, within seven (7) days of the date of this order, the secretary (Adam Grey) shall send a copy of this order and statement of reasons to all owners together with a notice inviting submission of motions for inclusion on the agenda of the meeting to be convened in accordance with the terms of this order (the meeting).

I further order that all owners shall have twenty-one (21) days from the date of this order to submit to the secretary motions for inclusion on the agenda of the meeting. All motions which are received by the secretary from owners within such time shall be included on the agenda of the meeting.

I further order that within twenty-eight (28) days from the date of this order, the body corporate secretary shall give notice to all owners in according with the Standard Module Regulation of a meeting to be convened and held to consider all motions included on the agenda in accordance with the terms of this order.

I further order that fourteen (14) days notice of the meeting is to be given, and that in all other respects, proceedings at the meeting shall be in accordance with the Body Corporate and Community Management Act 1997 and the Standard Module Regulation.

I further order that the meeting might consider any other motion validly before it.

STATEMENT OF ADJUDICATOR’S REASONS FOR DECISION - REF 0704-2001

“York Mews” CMS 24280

The applicant, the Body Corporate for York Mews, has sought the following interim order of an adjudicator under the Body Corporate and Community Management Act 1997 (the Act), quote -

That the body corporate manager not call an EGM without written prepared Agenda by the committee and that the body corporate manager write to all owners to cancel any action or proposed action arising from correspondence attached to their Memorandum to Owners dated 16 November 2001.

The final order as sought by the applicant is not a proposed order as such, but rather a series of statements.

Section 225(1) 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 background to the application is that the body corporate held its AGM on 29 October 2001. Of the 12 lots in the scheme, 6 lots appear to have voted at the AGM. Most of the motions, including those proposing administrative and sinking fund contributions, were defeated. A motion proposing that the body corporate “find an alternative body corporate management service” to replace the current manager was carried. Significantly, a committee of two were elected; Wayne Webley as chairperson, and Adam Grey and Secretary Treasurer. No ordinary member committee positions were filled at this meeting.

Following the AGM, the body corporate manager, Premier Body Corporate Management (Premier) has issued a notice for a further EGM to be held on Saturday 15 December 2001 at its office at South Brisbane. The body corporate committee, on behalf of the body corporate have sought an order preventing this meeting proceeding essentially for the reason that it was not authorised by the committee. The grounds state –

I sent letter to Premier ... informing them I did not authorise them to act as secretary and that they could not call meeting. ...

The committee concludes –

We ask, as the committee of York Mews Body Corporate, for an order and retraction from Premier Body Corporate Management so the committee can fulfil its obligations to owners and act on motions defeated and passed at AGM 29 October 2001 without further interfering. Premier is terminated (under 14 day clause of refusing to carry out instructions dated from 6 November 2001).

Premier has responded to this application by way of submission. In that submission, Premier states that motion 11 of the AGM did not terminate its services, or appoint an alternative manager, and that it still “has a valid contract which has two years to run”.

In respect of the proposed meeting, Premier states –

... this meeting has come about following the failure of the motions at the AGM. Clearly, the body corporate cannot function if it does not pass a budget and issue levies.

After the minutes were sent out, a number of lot owners queried the body corporate’s position. Accordingly, Premier, as body corporate manager, sent out a circular to lot owners (at no cost to the body corporate) advising that it would be prudent to call and hold an EGM to reconsider the motions that failed at the AGM. Given that the body corporate failed to pass the budgets and issue levies, it left the body corporate in an invidious position and it was necessary to rectify the situation as soon as possible.

Subsequent to this circular, Premier received a requisition from at least 25% of lot owners (lots 3, 5 and 8) to call and hold an EGM to reconsider the motions. Under its delegated powers, Premier convened an EGM which is to be held on 15 December 2001 and is the subject of this application.

... It is intended that the EGM to be held on 15 December 2001 should rectify the problems which have arisen from the defeat of the motions on the agenda for the AGM on 29 October 2001.

If an order is granted to stop the meeting, then the situation will only get worse and nothing is achieved. At the end of the day, an EGM has to be convened to reconsider the motions that were defeated at the AGM and whether this is done by the committee or a requisitioned meeting makes no difference. ...

Essentially what we have is two owners who through apathy of the other lot owners have been elected as chairperson and secretary / treasurer and who do not have the support of the majority of the other lot owners.

In essence, this dispute is about control of the body corporate. The question posed by this application is who, the body corporate committee or the body corporate manager, has the power to convene a general meeting of the body corporate. On this question the legislation has provided clear guidance.

It is clear that the body corporate elected a committee of two at the AGM on 29 October 2001. This has not been challenged by Premier, and I am not interested in its statement that these two owners do not have the support of the majority of the other lot owners. Given that they were elected at the AGM, then these two persons have the right to function as the body corporate committee. If other owners are not satisfied with the performance of these persons on the committee, then there are mechanisms in the legislation to have these positions declared vacant.

Section 40 of the standard module provides that a general meeting may be called by the secretary, or another member of the committee authorised by the committee to call the meeting. This section does not entitle the body corporate manager to call a general meeting. The role of a manager is not to run or control a body corporate. Rather the manager provides a professional service, for which the manager is remunerated. This does not mean that the body corporate abdicates its power to the manager. Quite the contrary, the manager is at the direction of the committee in the performance of the role of manager. This is particularly so where the manager is not also the elected (but non-voting) secretary of the body corporate as is the case here.

In the present scenario, it is the secretary who is authorised by the legislation to convene general meetings of the body corporate, not the manager. Premier states that it called the meeting “under its delegated powers”. Section 106 of the Act is relevant here. It provides –

106 Delegation to body corporate manager
(1) The body corporate for a community titles scheme may delegate its powers to a body corporate manager, but only to the extent permitted under subsections (2) and (3).
(2) The body corporate—
(a) may delegate to the body corporate manager some or all of the powers of the body corporate’s committee, or of an executive member of the committee; but
(b) must not prevent the committee, or an executive member of the committee, from—

(i)	exercising a delegated power; or
(ii)	directing the body corporate manager about how a delegated power is to be exercised.

(3) A delegation under subsection (2) may be revoked at any time.
(4) The body corporate may not delegate its powers to a person other than under this section.

Whilst the body corporate may have delegated certain powers to the manager, this does not mean that the manager can exercise those powers unilaterally. Rather, the manager should act at the direction of the committee. In the current scenario, I consider that the manager, upon receipt of correspondence from owners, was required to bring this correspondence to the attention of the committee and request instructions. The manager should not have unilaterally determined to call a general meeting.

The manager alleges that it was requisitioned by owners to convene the meeting which it has. Even if this were truthfully the case (see my comments later regarding how the meeting in fact came to be requisitioned) the fact of the (alleged) requisition by owners does not assist the manager. Section 61 of the standard module, which provides for a requisitioned EGM, states that the notice must be given to the secretary, or in the secretary’s absence, the chairperson. Again, what was required was for the manager to refer the matter of the requisitions to the committee and to request instructions on how to proceed.

The intention of the legislation is to make the role and power of the committee dominant over that of the manager. The position and role of the manager is subject to the direction of the committee. This was done so as to overcome difficulties which arose under the previous legislation, where it was not clear who was entitled to direct the other, and often power struggles for control of the body corporate arose, leading to impasse situations. The current legislation clarifies this by providing that any delegation given to a manager does not prevent the committee from exercising the power delegated, or directing the manager how the power is to be exercised, or revoking the delegated power at any time. Given these provisions, there can be no doubt that the committee has power to direct the manager in the performance of that role.

Moreover, if a body corporate manager were at any time to act in a manner inconsistent with a decision of the committee of the body corporate, then the decision of the manager would be void. This is specifically provided for in section 92(3) of the Act -

92 Power of committee to act for body corporate
(1) A decision of the committee is a decision of the body corporate.
(2) Subsection (1) does not apply to a decision that, under the regulation module, is a decision on a restricted issue for the committee.
(3) Despite anything in a contract with the body corporate (including the engagement of a body corporate manager), a decision of the body corporate manager is void to the extent that it is inconsistent with a decision of the body corporate’s committee.
(4) If persons, honestly and reasonably believing that they are the committee for the body corporate, make a decision while purportedly acting as the committee, the decision is taken to be a decision of the committee despite a defect in the election of 1 or more of the persons.

It seems clear to me that Premier were not prepared, following the AGM, to proceed in the manner instructed by the committee. Rather Premier sought to avoid the committee and go direct to owners. In its correspondence of 16 November 2001 presumably to all owners, the manager in fact solicited owners to requisition an EGM. It provided a form letter to this effect addressed to the secretary, care of itself. In the circumstances, I am not prepared to accept the manager’s statement that it called the meeting on the requisition of owners. Rather, the manager openly solicited the requisition of meeting from owners. I consider this action to be completely inappropriate on the part of the manager.

I intend to invalidate the meeting which has been called for 15 December 2001. This meeting is invalid, for the reason that the manager had no authority to call the meeting. I acknowledge that a meeting of the body corporate needs to be held given the outcome of the AGM. However it is the committee, and in particularly the secretary Adam Grey, who is authorized to call that meeting. Based on the information provided to me, I consider that the secretary / committee did intend to call a general meeting, but that the manager sought to avoid this.

There are a number of matters this body corporate must resolve at the meeting including the position of the manager. I agree that motion 11 carried at the AGM did not terminate the manager’s appointment. Moreover, it is not possible for a committee to terminate the appointment of a body corporate manager. As a motion proposing the appointment of a manager must be carried by ordinary resolution of the body corporate in general meeting, so must any termination of such appointment. Consequently, if the body corporate proposes to terminate the services of Premier, then there will need to be a motion to this effect included on the agenda of the forthcoming meeting. I say forthcoming as this body corporate will need to call and hold a general meeting in the immediate future. In the circumstances, I not only intend to invalidate the meeting convened by the manager for this Saturday, but I intend to go further and to order the secretary to convene a meeting.

I intend to order that the secretary is to send a copy of this order and statement of reasons to each owner within one week of the date of this order, together with a notice inviting submission of motions for inclusion on the agenda of the proposed meeting. I intend to allow owners a two week period to forward motions to the secretary for inclusion on the agenda of the meeting. In addition, the committee will have the right to submit motions for inclusion on the agenda. The committee will be able to prepare most parts of the agenda during this time, so as not to delay the calling of the meeting further than need be.

As for what the manager might do in the interim, I suggest at the very least that it comply with all reasonable requests and directions of the committee, and to act in a manner consistent with it being a paid contractor of the body corporate. It should take no further actions designed to undermine the current committee. In particular, I remind the manager that section 150(1) of the standard module provides that the body corporate must allow all members of its committee reasonable access (without payment of a fee) to the body corporate’s records. The manager should not seek to obstruct the committee in the calling of the meeting proposed.

I consider that this order will go some way to resolving the current difficulties affecting this body corporate. However, I consider that this order is also final in its determination of this matter. In my view, there is no further order that I can make. Certainly, it is not my role to termination the appointment of the manager, as the final paragraph of the applicant’s grounds seem to suggest. This can only be done by the body corporate in general meeting, by ordinary resolution.

In the circumstances, it is not intended to invite further submissions regarding this matter, or to make a further order, since this decision, though an interim one as sought by the applicant, is final in its determination of this matter. If either party considers that an appeal of this decision is warranted, then it should appeal the interim order.