Cairns Ocean Views [2002] QBCCMCmr 452 (17 July 2002)

RA MeekREFERENCE: 0218-2002

ORDER OF AN ADJUDICATOR

MADE UNDER PART 10 OF CHAPTER 6

BODY CORPORATE AND COMMUNITY MANAGEMENT ACT 1997

Number of Scheme:	1114
Name of Scheme:	Cairns Ocean Views
Address of Scheme:	221 - 225 Lake Street CAIRNS QLD 4870

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

John Lewis Costelloe, the co-owner of lot 2

RA MeekI hereby order that the application by John Lewis Costelloe, the co-owner of lot 2, for several orders, namely that

Motion 12 of AGM Agenda be declared invalid.

Motion 14 of AGM Agenda be declared valid.

Motion 11 of AGM Agenda be declared invalid.

Letter from AM Trimble (Manager) to the commission dated 20^th March 2002 asking for advice to be totally rejected as –

a) No authority had been given at the AGM for such action;

b) The secretary had prohibited the manager from taking any action relating to the appointment of the Manager (letter of 4^th March, 2002);

c) The letter disregards the requirements of the Act;

It be ruled that the AGM was adjourned and it be resumed when the Adjudicator’s findings are known regarding Management contract and no Extraordinary AGM may deal with the matter;

A ruling regarding the validity of the Manager’s reappointment by the committee on a month to month basis;

The manager be directed on the matter of the Secretary/Treasurer’s authority.

Consideration be given to appointment an administrator.

is dismissed.

I further order that until such time as the issue of the appointment of a body corporate manager is considered and determined in general meeting, the “month to month” appointment of Trimble Real Estate Pty Ltd as manager is specifically limited to the extent that Trimble shall only act on written instructions of the committee.
STATEMENT OF ADJUDICATOR’S REASONS FOR DECISION - REF 0218-2002

“Cairns Ocean Views” CTS 1114

The applicant, John Lewis Costelloe, the co-owner of lot 2, has sought the following order of an adjudicator under the Body Corporate and Community Management Act 1997 (the Act), quote -

Motion 12 of AGM Agenda be declared invalid.

Motion 14 of AGM Agenda be declared valid.

Motion 11 of AGM Agenda be declared invalid.

Letter from AM Trimble (Manager) to the commission dated 20^th March 2002 asking for advice to be totally rejected as –

d) No authority had been given at the AGM for such action;

e) The secretary had prohibited the manager from taking any action relating to the appointment of the Manager (letter of 4^th March, 2002);

f) The letter disregards the requirements of the Act;

It be ruled that the AGM was adjourned and it be resumed when the Adjudicator’s findings are known regarding Management contract and no Extraordinary AGM may deal with the matter;

A ruling regarding the validity of the Manager’s reappointment by the committee on a month to month basis;

The manager be directed on the matter of the Secretary/Treasurer’s authority.

Consideration be given to appointment an administrator.

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)).

I do not propose to restate the applicant’s grounds since these are known to the other parties via the submission process. Submissions were sought from all owners, the committee and the body corporate manager. Submissions were received from the committee (although the applicant challenges this submission alleging that no valid meeting was convened in order to formulate this submission), the manager, and from certain owners (some of whom are also members of the committee). Additionally there is a submission from a Marie Anne Green who is not an owner but instead a current committee member. The applicant has also challenged the acceptance of this submission, on the basis that Ms Green is not an owner. However in the circumstances, I am simply not prepared to descend to this level of technicality.



The application specifically relates to certain aspects of the AGM held on 26 February 2002. In submissions though, a wider picture of the basis of the dispute is presented to me. The applicant has argued in his reply that “none of (the submissions) contained any information or opinions which were directly relevant to the issues put to the Commission” and that “... they should be disregarded”.

Whilst I acknowledge the approach suggested by the applicant, and certainly do not intend to descend to a consideration of the numerous issues which appear to be underlying this dispute, I also note that the role of an adjudicator is to make orders that are “just and equitable in the circumstances ... to resolve a dispute ...”. In my view, just and equitable requires some consideration of the wider dispute and not simply the issues which any one party might wish to focus on.

From correspondence provided by the applicant as part of the application, it is abundantly clear that the applicant’s principle objection is to the currently appointed body corporate manager Trimble Real Estate Pty Ltd (Trimble). To quote from the applicant’s correspondence of January 2002, apparently sent to owners, the applicant states under the heading “Appointment of a New Manager”

The most important matter to be dealt with at the forthcoming AGM is the replacement of Trimble Real Estate with a competent professional manager who can exercise proper control over maintenance, repairs and accounts. Every aspect of management has been a shambles for nearly three years; our resources have been reduced to nil, costs have been grossly excessive, keeping control of funds appalling. The handling of tenders and contracts and the standard of workmanship have been totally unacceptable. At every general and committee meeting I have had to listen to hours of deceitful excuses for deficiencies in management.

This is merely one example in a letter littered with allegations and statements directly concerning Trimble in its capacity as the manager. The letter in fact concludes with the statement that “with the appointment of Cairns Strata Management, there will be a complete overhaul of our management”. I conclude that the real issue underlying this application is the applicant’s efforts to remove Trimble as the manager.

It has been suggested to me in submissions that the applicant is seeking the appointment of an on-site manager, responsible to attend to maintenance of the complex and so forth. Whilst I do not intend to comment on the performance of the manager, I will state that the roles of body corporate manager and on site (or building) manager are fundamentally different. Subject to the terms of the agreement between the body corporate and the manager, the usual role of a body corporate manager is to undertake the administrative or secretarial duties of the body corporate. These usually include maintaining the body corporate books and records, convening meetings of the committee and the body corporate, forwarding contribution notices, and receipting contributions received, paying body corporate accounts when due and the like. In contrast, the usual role of a building manager is considerably different. The building manager (who is often also the letting manager) usually has no responsibility for maintaining body corporate books and records, but rather is responsible to maintain the buildings and complex generally, to report to the committee on items of maintenance required and to act on the committee’s instructions regarding maintenance. Also the role of a building manager often includes the duty to enforce by-laws.

I have set out the above to indicate what I consider to be the usual distinctions between the two roles. I consider that this distinction needs to be made as I conclude that many of the applicant’s expectations, as evidenced by the letter referred to, and by other correspondence of the applicant provided to me by Trimble, suggests to me that the applicant’s expectation of the performance of the manager is more analogous with the role performed by a building manager rather than a body corporate manager. If the applicant seeks the appointment of an on-site building manager, then I suggest that he propose this by submitting a motion for inclusion on the agenda of a general meeting of the body corporate. It is then for the body corporate in general meeting to determine, by ordinary resolution, whether to appoint a building manager.

I do not propose to consider or investigate the actions of Trimble to any great extent. However, what I would say to all owners is that the applicant’s criticism of Trimble should be viewed in the context of what Trimble is contractually bound to provide. I suggest owners should review the agreement which the body corporate has entered into with Trimble, and determine whether the performance of Trimble is satisfactory when measured against the duties set out in that document. In my view, it would be incorrect to measure the performance of Trimble against the performance criteria which would normally be expected of a building manager. Building managers are usually paid considerably more annually for the performance of their duties than body corporate managers are.

The application seeks the invalidation of motions 11 and 12, and the validation of motion 14, of the AGM held on 26 February 2002. Motions 1 to 11, and the election of the committee, were considered by the body corporate on that date. When motion 11 was being considered, there was discussion as to the validity of this and subsequent motions, and the minutes indicate that “... the meeting agreed that as the validity or otherwise was fundamental to the balance of the Agenda items, there should be no further discussion (other than to declare the election of office bearers) and that the meeting should be closed.” There was a further statement that the “manager (was) to obtain an opinion from the commissioner as to the validity of Motions”.

The minutes indicate that the meeting was subsequently reconvened on 22 April 2002 where motions 11 to 14 were considered. The minutes indicate that motions 15 to 17 “were not required as motion 14 was lost”. Following this, 10 items of general business were discussed.

In respect of motions 11 and 12 which the applicant seeks be invalidated, the minutes indicate that the motions were ruled out of order by the chairperson “as it had the incorrect proposer”. Given the outcome of the meeting, I don’t propose to consider the validity of these motions further.

Motions 13 and 14, both proposed by the applicant and headed “Termination of Body Corporate Manager” and “Appointment of Body Corporate Manager” respectively were both declared lost by a margin of 4 votes against to three votes in favour. In his grounds, the applicant states that –

The motion was not directly addressed by the meeting, but the manager did contend that it was invalid, as although there were two quotes, owners were not given the opportunity of voting for either of them, only the one recommended by the proposer.

The applicant’s grounds contains additional material subsequent to the re-convening of the AGM. However nothing in this material appears to me to address the issue of the validity of motion 14. In the applicant’s reply to submissions, the applicant states that “it is apparent from the opinions put forward in these submissions that, should a further general meeting be convened and two compliant ordinary motions ... were put to the members, the indications are that, if 12 voted ballots were cast, the voting would be a draw 6/6 which would not resolve this vital issue”.

Is the applicant suggesting by this statement that I should somehow resolve this issue? If so, then I decline to do so. It is not my role to determine which body corporate manager, if any, a scheme should engage. Rather, I consider the solution to be a simple one. If it is proposed to appoint a body corporate manager, then a further general meeting needs to be convened so that the issue may be considered and determined.

On the issue of the right of the manager to approach the commission “for advice”, I propose to make no order. This office, via its information service, provides both telephone and written information to any person or entity who seeks such information. The other service provided by this office is dispute resolution, the service of which the applicant has availed himself. In the circumstances, I conclude that the manager had a right to approach this office for information even if this action had not been approved and / or ratified by the body corporate, which it appears to have been in any event.

The applicant has next sought that the AGM not be “resumed” until after my findings are known. This is contrary to what has occurred. However in the circumstances, I do not intend to invalidate the reconvening of the meeting. It is valid for a meeting to be adjourned in certain circumstances, and thereafter reconvened by the chairperson when the matter the subject of the adjournment has been resolved or addressed to the satisfaction of the chairperson.

The applicant seeks a ruling regarding the validity of the manager’s reappointment by the committee on a month to month basis. What appears to have been resolved at the reconvened meeting, under the heading of general business was that “... if no decision had been received in 12 weeks time ie. by 15/7/02, then Manager is to call for submissions for an EGM, to appoint a new manager. Trimble Real Estate to continue on, on a month to month basis, until matter is resolved”.

I do not have available to me full information regarding how this decision was taken. It appears to have been taken in the context of the reconvened general meeting, but the applicant states that it was a committee decision. From the minutes, it seems that only four of the seven committee members were present. Whilst a committee may proceed in the absence of three members, it is necessary for committee members to receive proper notice of the relevant meeting. There is no evidence that this has occurred.

In the circumstances, I suggest that the involvement of Trimble in relation to the convening of a further general meeting should be limited to purely administrative support functions. I note that no employee of Trimble is the appointed secretary of the body corporate. It is the role of the secretary to convene meetings of the body corporate, although practically this duty is usually undertaken by an appointed body corporate manager.

However, in my view, the secretary does not unilaterally have power to convene either general or committee meetings. Whilst the secretary technically has the power to convene such meetings, I suggest that such meetings should only be convened in appropriate circumstances. For example, a general meeting should be convened by the secretary upon requisition for such a meeting by more than 25% of owners (section 61 of standard module) or alternatively when instructed by a majority of members of the committee in a properly convened meeting. In the case of committee meetings, I suggest that the secretary should convene a meetings within previously agreed timeframes (eg. if the practice is to convene a committee meeting each two months) or alternatively, when there are a number of issues requiring determination, or when the annual general meeting is imminent, and the committee must meet to consider and prepare the agenda. In any event, I suggest the secretary should informally seek the confirmation of other committee members as to their availability before convening a committee meeting.



Whilst I am not prepared to invalidate the “month to month” appointment of Trimble until either a general meeting is held or a new manager is appointed, I do intend to order that Trimble should only act on instructions of the committee. This is the requirement of section 92(3) of the Act which provides –

... 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.

I therefore intend that the involvement of Trimble in any aspect of the convening of a further meeting, and the consideration of the appointment of a body corporate manager, should be as directed in writing by the committee. In this regard, Trimble should not act only on the instruction of the chairperson, or the secretary for that matter, but rather the majority decision of members of the committee.

I consider that my comments in this regard address the next point raised by the applicant, namely that the manager be directed on the matter of the secretary / treasurer’s authority.

Finally, the applicant seeks that consideration be given to the appointment of an administrator. I decline this request. This body corporate has a properly formed committee which is empowered to act. It should make decisions by majority resolution, and thereafter implement those decisions. Provided correct procedures are followed, I see no reason why the appointment of an administrator is necessary in the current circumstances.


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