Lemke Crest [2002] QBCCMCmr 52 (1 February 2002)

P J HANLYREFERENCE: 0449-2001

ORDER OF AN ADJUDICATOR

MADE UNDER PART 10 OF CHAPTER 6

BODY CORPORATE AND COMMUNITY MANAGEMENT ACT 1997

Number of Scheme:	19231
Name of Scheme:	Lemke Crest
Address of Scheme:	228 Enborisoff Street TAIGUM QLD 4018

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

Albert Francis Kelly, the owner of lot 65



I hereby order that the application for an order that will direct the secretary of Lemke Crest body corporate to convene an extraordinary general meeting to present to owners a proper statement of accounts for the year ending 31 March 2001, is dismissed.



STATEMENT OF ADJUDICATOR’S REASONS FOR DECISION - REF 0449-2001

“Lemke Crest” CTS 19231

The applicant, Albert Francis Kelly, the owner of lot 65, has sought the following order of an adjudicator under the Body Corporate and Community Management Act 1997 (the Act), quote -

The order being sought is one that will direct the secretary of Lemke Crest body corporate to convene an extraordinary general meeting to present to owners a proper statement of accounts for the year ending 31 March 2001.

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 at the annual general meeting held on 23 May 2001 the motion to adopt the audited statement of accounts was lost. The applicant further states that the accounts were incomplete and not in accordance with the requirements of the standard module regulations.

The body corporate committee and the body corporate manager were invited to respond to the application. The secretary stated in her submission that an extraordinary general meeting was to be held in October 2001, at which the relevant financial details would be available for owners in a “more readable format”. Following the extraordinary general meeting, which was held on 17 October 2001, the secretary advised that, after lengthy discussion, the accounts were adopted in their current form, “as there appeared to be no problem with the end result only the way in which the accounts were presented.” The secretary further stated that the current committee assured owners that future accounts would be presented in a more acceptable format.

The requirements of the standard module in relation to accounts are set out in section 105, as follows:

Accounts

105.(1) The body corporate must—

(a) keep proper accounting records; and

(b) prepare for each financial year a statement of accounts showing

the income and spending (or receipts and payments) of the body

corporate for the financial year.

(2) The statement of accounts may be prepared on a cash or accrual

basis.

(3) If the accounts are prepared on a cash basis, they must include

disclosure of the following—

(a) total contributions paid in advance to the administrative and

sinking funds;

(b) total contributions in arrears, and total outstanding penalties;

(c) balances for all financial institution accounts and investments;

(d) all outstanding receipts and payments.

(4) If the accounts are prepared on an accrual basis, they must show the

assets and liabilities of the body corporate at the end of the financial year.

(5) The statement of accounts must include the corresponding figures for

the previous financial year (unless the statement is for the body corporate’s

first financial year).

(6) A copy of the statement of accounts must accompany the notice of

the annual general meeting first happening after the end of the financial year

for which the accounts are prepared.

It is quite apparent that the accounts as presented do not comply with the above requirements. However, the accounts have been audited, and as the body corporate has discussed the accounts in detail at the extraordinary general meeting held on 17 October 2001, and an overwhelming number of owners voted to adopt them in their present form, and, further, as the accounts for 2001/2002 will soon require to be done, I do not propose to order that the body corporate hold another extraordinary general meeting in relation to the accounts for the period ending 31 March 2001.

I have therefore dismissed the application. I point out, however, that the committee must comply with the requirements of section 105 when preparing the accounts for 2001/2002.2n