Tea Trees [2002] QBCCMCmr 510 (20 August 2002)

P J HANLYREFERENCE: 0300-2002

ORDER OF AN ADJUDICATOR

MADE UNDER PART 10 OF CHAPTER 6

BODY CORPORATE AND COMMUNITY MANAGEMENT ACT 1997

Number of Scheme:	20878
Name of Scheme:	Tea Trees
Address of Scheme:	4 Itong Place CURRUMBIN QLD 4223

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

Mavis Amy Harrison, the owner of lot 18



I hereby order that the application for an order

1. That the annual general meeting to be held on 26 May 2002 be cancelled and declared null and void.

2. That the annual general meeting be rescheduled with the owners motions 1 to 15 being resubmitted, but

a) Those motions that have not been presented correctly (being the purported motions from the committee – motion numbers 16 to 12 (sic)) be resubmitted correctly in accordance with the Body Corporate and Management Act (sic), standard module and to include quotes and contracts where necessary

b) And that the elections be processed correctly for the meeting

c) And that the voting papers include provision for the owners lot number, signature and date

d) That the minutes of the committee meeting showing resolutions to be submitted by the committee for the AGM be sent to owners

e) That explanatory notes be included

3. That as it seems the secretary is incapable and inexperienced to prepare a proper general meeting, that an administrator be appointed to assist with the preparation and conducting of the annual general meeting.

is dismissed.


STATEMENT OF ADJUDICATOR’S REASONS FOR DECISION - REF 0300-2002

“Tea Trees” CTS 20878

The applicant, Mavis Amy Harrison, has sought the following order of an adjudicator under the Body Corporate and Community Management Act 1997 (the Act), quote -

1. That the annual general meeting to be held on 26 May 2002 be cancelled and declared null and void.

2. That the annual general meeting be rescheduled with the owners motions 1 to 15 being resubmitted, but

a) Those motions that have not been presented correctly (being the purported motions from the committee – motion numbers 16 to 12 (sic)) be resubmitted correctly in accordance with the Body Corporate and Management Act (sic), standard module and to include quotes and contracts where necessary

b) And that the elections be processed correctly for the meeting

c) And that the voting papers include provision for the owners lot number, signature and date

d) That the minutes of the committee meeting showing resolutions to be submitted by the committee for the AGM be sent to owners

e) That explanatory notes be included

3. That as it seems the secretary is incapable and inexperienced to prepare a proper general meeting, that an administrator be appointed to assist with the preparation and conducting of the 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 Tea Trees “is a complex comprising 44 units (standard module) with approximately 39 owner residents the majority being elderly citizens who have not been given the opportunity of fully understanding the meeting notice and how to vote because the papers are confusing and in many cases incorrect.” The applicant then cites various examples of anomalies in the meeting notice. I do not propose to set these out again, as a copy of the application was provided to all owners when they were invited to respond to the application. The applicant then stated that the committee election was not held by secret ballot as required, and, further, that there was no provision on the voting papers for owners to place their signatures, their lot number and the date on which the voting paper was completed.


All owners were invited to respond to the application. Fourteen individual submissions were received, and a further fourteen owners signed a pro-forma statement of support for the committee. Of the fourteen individual submissions, four owners expressed some dissatisfaction with certain aspects of the committee’s handling of the day-to-day affairs of the body corporate. The remainder opposed the application, and expressed confidence in the committee.

A submission was also received from the committee, and, in due course, the applicant replied to that submission. I do not propose to repeat all of that material in this “Statement of Reasons”, except to the extent necessary to elucidate my determination.

In support of her request that the annual general meeting held on 26 May 2002 be declared invalid, the applicant referred to a number of anomalies in relation to the meeting:

Minutes not sent to all owners – the committee advised that minutes of meetings are sent to all owners who have requested them. Section 37(1) of the standard module provides that minutes must be sent to every lot owner, except those lot owners who have stated that they do not wish to receive copies of minutes. If the committee is only sending minutes to those owners who have requested minutes, then it should ensure that in future it complies with section 37(1).

Motion 22 – the applicant states that there should have been separate motions to approve the administration fund levy and the sinking fund levy and also notes that the motion does not provide for the fixing of contributions, payments by instalments or lot entitlements. The committee states that it has complied with section 95 of the standard module in that motion 22 advised owners that the administration fund levy was increasing to $90.00 per quarter, thereby making the sinking fund levy $60.00 per quarter. Motion 22 did not include all of the information required by section 95, in that it did not fix the date on or before which each instalment was due to be paid. Although the levies were payable quarterly, the quarter would not necessarily have to start on 1 January, so this should be made clear in the motion. It is not necessary, however, to have separate motions, provided that all of the information required by section 95 is clearly set out in the one motion, and the amount levied for each fund is identified. I note, incidentally, that the applicant did not vote against motion 22 at the meeting.

No motion to approve current financial statements and accounts, approve auditors, confirm minutes of previous annual general meeting – the committee states that the financial statements and accounts were circulated with the notice of meeting, and “those accounts would have to be moved, seconded and accepted by the body corporate, as has been the case in previous years. Therefore there is no requirement for a further motion to approve these. The same applies to the confirmation of the minutes for the previous annual general meeting.” I note that a motion was moved that the financial reports be accepted. Such a motion should be a standing item on the agenda of every annual general meeting, because section 45(3) of the standard module requires that the agenda must provide for the presentation of the accounts for the financial year. Unless a motion is included on the agenda of the meeting, it cannot be considered at a meeting, because owners who do not attend the meeting but submit a voting paper are otherwise deprived of the opportunity of voting for or against the motion. I do note, however, that the motion was carried. Similarly, there should be a motion on the agenda to approve the minutes of the previous general meeting, in this case the previous annual general meeting, in accordance with section 45(2)(a)(v) of the standard module. Such a motion was in fact carried at the meeting, but my comments above apply in this instance as well. As to the appointment of auditors, I note that motion 23 provided for the re-election of certain auditors, but to comply with section 45(3)(b) of the standard module, there should have been two motions, one of which provided, by special resolution, that the accounts were not to be audited, and the other, effectively a motion in the alternative, which provided by ordinary resolution, for the appointment of an auditor.
No explanatory notes – it is unclear from this statement whether the applicant is saying that explanatory notes were provided with various motions but did not accompany the agenda, or whether she is saying that explanatory notes were not provided at all. There is no requirement for an explanatory note to accompany a motion. If, however, an owner “seeking the inclusion of a motion under (section 45(2)(a)(iii) of the standard module) supplies an explanatory note about the motion, and the note is not longer than 100 words, the note must accompany the agenda.” (section 45(4) of the standard module).

Motions 17-21 – I consider that events have overtaken this particular aspect of the applicant’s complaint, as I note that her application was lodged before the meeting held on 26 May 2002, and at that meeting she did not vote against these motions, and is also recorded as having withdrawn several earlier motions submitted by her in relation to similar topics (i.e. motions 4, 5, 7 and 8). I do however consider that in future, the committee should include the actual cost of, say, gardening services, by stating that the hourly rate is to be $x, and that the gardener will work for whatever number of hours, simply to keep new owners informed. It is really not sufficient to say that the gardening services will be provided on the same terms and conditions as last year, even though a perusal of previous minutes reveals that the hourly rate is $20.00 for gardening, and a lump sum of $100.00 applies for lawns, edges and gutters. This comment also applies to the handyman position, which is shown in the previous year’s minutes as being payable at the rate of $12.00 per hour. As for the motions relating to the secretary and the treasurer, the sum to be paid to each of them is stated as being $660.00 per annum, and in the absence of any further elaboration, that fee should be, and according to the submission from the committee, is, a flat fee. It is a matter for the committee as to whether the respective roles need to be particularised. I would have thought that the roles are essentially self-explanatory, especially having regard to the fact that the role of the secretary, in particular, is set out in the Act and the standard module.

Elections – the applicant contends that the election should have been by secret ballot, however, the minutes of the extraordinary general meeting held on 26 July 1998 reveal that a motion proposed by Mr O’Flaherty that all future elections of the committee be by way of open ballot at an annual general meeting was carried by 30 votes in favour, with 2 votes against, and 6 abstentions. Accordingly, section 12(2) of the standard module has not been breached.

Voting papers – the applicant contends that no provision was made for owners to sign their names, date the voting paper and advise their lot number, and, further, that no explanation was provided on how to vote. Section 42(3)(c) of the standard module provides as follows:

42 Notice of general meeting

(1)

(2)

(3) The notice of a proposed general meeting must—

(a)

(b)

(c) be accompanied by a voting paper—

(i) stating each motion to be considered at the meeting and, if

the motion is not proposed by the committee, stating the

name and lot number of the person proposing the motion;

and

(ii) stating for each motion whether a resolution without

dissent, special resolution or ordinary resolution is required;

and

(iii) enabling a person who is a voter for the general meeting to

record a written vote on each motion to be considered at the

meeting; and

(d) contain or be accompanied by explanatory or other materials

required under this regulation to be contained in or to accompany

the notice.10

10 Materials that could be required to be contained in or accompany the notice of the

general meeting include—

• committee election ballot-papers (sections 16 (Conduct of elections for

committee by secret ballot) and 17 (Conduct of elections for committee by open

ballot))

• explanatory notes to a motion (section 45 (Agenda for general meeting))

• budgets (section 94 (Budgets))

• quotation documents (section 104 (Quotes for major spending))

• statement of accounts (section 105 (Accounts))

• auditor’s certificate (section 106 (Audit)).

Section 51(2) of the standard module provides:

51 Exercise of vote at general meetings

(1)

(2) A written vote is cast by completing the voting papers as required by

the accompanying instructions and giving them to the secretary

(personally, by post or by facsimile) before the start of the meeting.

In this instance, the secretary sent a letter dated 9 May 2002 to all owners advising them of the manner in which the voting paper was to be completed. It appears that the letter was written by the secretary as a result of his having received a letter dated 7 May 2002 from the applicant, in which she stated, amongst other things, that the voting paper did not carry any directions on where to cast a vote and where to sign.

In considering this application, I have also been mindful of the views expressed by His Honour Judge Boulton DCJ in Chen and Body Corporate for Wishart Village CTS 19482 (District Court Brisbane 29 May 2001):

The very detailed provisions of the standard module regulation to which I have referred above make it almost inevitable that from time to time there will be non-compliance. Equally though the provisions of the Act make it clear that non-compliance of an insubstantial nature will not be allowed to imperil the actions of bodies corporate or their committees, particularly in the instance of committees where actions are taken bona fide.

I consider that the various matters of non-compliance illustrated above were of an insubstantial nature, and that there is therefore no basis upon which to invalidate the annual general meeting. I have therefore dismissed the application in its entirety.

I would like to point out, however, that in future the body corporate should carefully adhere to the requirements of the Act and the standard module, otherwise any future application on these same points may result in a different outcome.