Cornhill Gardens [2002] QBCCMCmr 14 (11 January 2002)

RA MeekREFERENCE: 0465-2001

ORDER OF AN ADJUDICATOR

MADE UNDER PART 10 OF CHAPTER 6

BODY CORPORATE AND COMMUNITY MANAGEMENT ACT 1997

Number of Scheme:	19308
Name of Scheme:	Cornhill Gardens
Address of Scheme:	134 Hill Road RUNCORN QLD 4113

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

Owen William Sheiles, the owner of lot 95


RA MeekI hereby order that motion 20 headed Appointment of B&D Body Corporate Management purportedly carried at the AGM of the body corporate held on 8 May 2002 is invalid and of no effect.

I further order that the agreement entered into between the body corporate and B&D Body Corporate Management pursuant to such motion is void, pursuant to section 85 of the Accommodation Module Regulation.
STATEMENT OF ADJUDICATOR’S REASONS FOR DECISION - REF 0465-2001

“Cornhill Gardens” CTS 19308

The applicant Owen William Sheiles, the owner of lot 95, has sought the following order of an adjudicator under the Body Corporate and Community Management Act 1997 (the Act), quote -

That motion 20 (Appointment of B&D Body Corporate Management) put forward at the AGM held on the 8^th May 2001 be invalidated and the body corporate be directed to convene an EGM to reconsider this resolution.

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 applicant provides two grounds for seeking to invalidate the resolution. These are that the motion was included on the agenda as being proposed by the body corporate committee, when in fact it was not so proposed. Secondly, that –

I believe that a copy of the managers’s proposed contract should have been included with the meeting notice and the voting papers so that all members would be fully informed prior to casting their vote. ...

There is no dispute by either the committee or the manager as to the correctness of these two statements. Rather there is explanation as to why the matters occurred in the manner in which they did.

In respect of the first point raised by the applicant, the body corporate manager has correctly stated that it has no right to propose motions for inclusion on the agenda of a general meeting (see section 45). The manager suggests that the motion should have been proposed by the chairperson. This technically is not correct either. There are two parties who might propose a motion, an owner, or the committee. The committee however, does not include an individual member thereof.




What should have occurred is that the body corporate manager advised the committee that its contract was about to expire. The committee should then have met and determined an appropriate course of action in respect of the appointment of a manager. The options were several. Depending on what the committee elected to do, it should then have acted accordingly. It may, for example, have resolved to include a single motion on the agenda for the re-appointment of the current manager, as in fact occurred. Alternatively, it might have sought quotes from other managers, reviewed such quotes, and then resolved to include some or all of the quotes on the agenda of the AGM. However, the committee did not adopt this course of action. If this was the only ground relied on by the applicant, I consider that it would have been a difficult call between invalidating the motion (and the consequent costs of a further meeting being convened), and allowing the motion to stand.

However the second ground relied on by the applicant is more compelling, and requires the invalidation of the motion. It is namely that a copy of the proposed agreement was not included on the agenda of the meeting. It has been explained to me by both the manager and the committee that this was done for reasons of (reducing) cost to the body corporate.

Section 85 of the accommodation module provides, relevantly, as follows –

85.(1) The body corporate may engage a person as a body corporate manager or service contractor, or authorise a person as a letting agent, only if—
(a) the engagement or authorisation is approved by ordinary resolution of the body corporate;19 and
(b) the terms of the engagement or authorisation are included in the material forwarded to members of the body corporate for the general meeting that considers the motion to approve the engagement or authorisation.
(2) If subsection (1) is not complied with, the engagement or authorisation is void. ...

This section makes it absolutely clear that a copy of the proposed engagement must be included with the notice of meeting. Moreover, it leaves no room for discretion. It states that if the requirements of the section are not complied with, then the engagement is void. Given the statutory requirement, the issue of cost to the body corporate becomes irrelevant. In any event, I note that the notice of meeting was some 52 pages in length, and the agreement 7 pages. The inclusion of the agreement would have increased the size of the notice by 14% approximately.

I intend to order that motion 20 purportedly carried at the AGM held on 8 May 2001 is void and of no effect. n