No. 9 Port Douglas Road [2002] QBCCMCmr 264 (3 May 2002)

P J HANLYREFERENCE: 0167-2002

INTERIM ORDER OF AN ADJUDICATOR

MADE UNDER PART 10 OF CHAPTER 6

BODY CORPORATE AND COMMUNITY MANAGEMENT ACT 1997

Number of Scheme:	24368
Name of Scheme:	No. 9 Port Douglas Road
Address of Scheme:	9 Port Douglas Road PORT DOUGLAS QLD 4870

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

Famestock Pty Ltd, the owner of lots 1, 16 and 18, and by Michael Joseph McEvoy and Christina McEvoy, the owners of lots 2 and 11, and by Michael Joseph McEvoy and Christina McEvoy as trustees, the owners of lots 8, 9 and 12



I hereby order that the application for an interim order that the body corporate not enforce or execute the resolutions passed at the annual general meeting held on 21 February 2002 until the hearing and determination of this application, is dismissed.

I further order that the application for an order that all resolutions passed at the annual general meeting held on 21 February 2002 were invalid, null and void, is dismissed.

STATEMENT OF ADJUDICATOR’S REASONS FOR DECISION - REF 0167-2002

“No. 9 Port Douglas Road” CMS 24368

The applicants have sought the following order of an adjudicator under the Body Corporate and Community Management Act 1997 (the Act), quote -

That all resolutions passed at the annual general meeting held on 21 February 2002 were invalid, null and void,

The applicants have also sought the following interim order of an adjudicator, quote -

That the body corporate not enforce or execute the resolutions passed at the annual general meeting held on 21 February 2002 until the hearing and determination of this application,

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)).

In the supporting grounds, the applicants state that at the annual general meeting held on 21 February 2002, the chairperson ruled that they were unable to vote, as they were unfinancial at the time of the meeting. The applicants provide various documents in support of their claim that they paid all outstanding levies prior to the meeting, and should therefore have been permitted to vote. The applicants further state that they control 8 out of 18 lots, and 26 lot entitlements, which they claim to be half of all lot entitlements should a poll have been called on any motion requiring an ordinary resolution.

The body corporate committee and the body corporate manager were invited to respond to the application. A detailed submission was received from McCullough Robertson, solicitors instructed by the body corporate committee. The submission makes the following points:

• The monies paid on 20 February 2002 by the applicants on account of outstanding levies and interest was calculated up to 21 December 2001. Any payment made after that date would not account for further interest accrued to the date of payment.

• The applicants failed to disclose that legal proceedings had been commenced on 18 February 2002 for outstanding levies, interest and costs.

• The body corporate disputes that the chairperson’s ruling (that the applicants were ineligible to vote) was wrong because the applicants were fully aware that interest was accruing on outstanding levies up to 21 December 2001 and would continue to accrue until paid.

• The second page of the levy notice notes that if levies are overdue interest and other costs associated with recovering over due amounts may accrue.

• By-law 37 specifies the penalty to be fixed on unpaid contributions (sections 94 & 96 of the Accommodation Module discussed)

• The body corporate strenuously denies that the applicants sought the right to pay the outstanding amounts before the motions were put, and provides statutory declarations from 11 persons present at the meeting attesting to the fact that the applicants left the meeting before the body corporate manager had finished reading a list of outstanding amounts due for each lot in the scheme. Each of the 11 persons further attests to the fact that the applicants did not request the chairperson to allow them the right to pay the outstanding amounts before the motions were put to the meeting.

• The body corporate submits that the annual general meeting held on 21 February 2002 was valid and that all resolutions passed at that meeting were valid.

The applicants incorrectly state that they hold half of the lot entitlements for this scheme. There are 54 lot entitlements, and they hold 26.

The applicants are aware of by-law 37, which clearly provides the amount of interest payable on overdue contributions (defined as being any contributions not paid on or before the seventh day after the date on which they became due and payable). The applicants should also have observed that the levy notice issued on 24 December 2001 was due for payment by 24 January 2002. On their own admission, they paid the amounts detailed in these levy notices on 20 February 2002, significantly more than 7 days after the date on which they became due. Accordingly, leaving aside any other consideration of outstanding levies, there was penalty interest payable on the current levies at the time of the meeting in question. Furthermore, the applicants did not disclose that the body corporate had instituted recovery proceedings against the applicants prior to the meeting. Those proceedings sought payment of outstanding levies, interest and costs. The sum of $32,836.26 paid on 20 February 2002 did not cover the claimed amounts and costs, let alone any component the court might have awarded for interest.

I am therefore satisfied that the applicants would not have been entitled to vote at the meeting held on 21 February 2002 on the basis that they were unfinancial at the time. I am further satisfied that the applicants left the meeting before the voting commenced. In addition, I am satisfied that the meeting was called and held in accordance with the requirements of the Act and the Accommodation Module. There is no evidence before me of any defect in the meeting procedure. I therefore propose to dismiss both the interim and final orders sought by the applicants.

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 applicants, is final in its determination of this matter. If the applicants consider that an appeal of this decision is warranted, then they should appeal the interim order.