Pacific Gardens [2002] QBCCMCmr 58 (4 February 2002)

DJ ReardonREFERENCE: 0536-2001

ORDER OF AN ADJUDICATOR

MADE UNDER PART 10 OF CHAPTER 6

BODY CORPORATE AND COMMUNITY MANAGEMENT ACT 1997

Number of Scheme:	11997
Name of Scheme:	Pacific Gardens
Address of Scheme:	372 Esplanade SCARNESS QLD 4655

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

June Kite, the Co-owner of lot 10


I hereby order that the purported engagement of Mr TW Cecil of Richardson & Wrench, Hervey Bay as body corporate manager for “Pacific Gardens” community titles scheme 11997, at the extraordinary general meeting held on 17 November 2001, is void.
STATEMENT OF ADJUDICATOR’S REASONS FOR DECISION - REF 0536-2001

“Pacific Gardens” CTS 11997

The applicant, the Co-owner of Lot 10, has sought the following order of an adjudicator under the Body Corporate and Community Management Act 1997 (“the Act”), quote-

“I am seeking an order to invalidate the decision of the body corporate chairperson to employ a manager without the approval of a body corporate meeting.”

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 community management statement for the “Pacific Gardens” community titles scheme indicates that the Body Corporate and Community Management (Standard Module) Regulation 1997 (“the Standard Module”) applies to the scheme.

This application is concerned with whether or not the body corporate for the “Pacific Gardens” community titles scheme properly engaged Mr TW Cecil, of Richardson &Wrench, Hervey Bay, as a body corporate manager for the scheme.

It appears that the matter of engaging a body corporate manager was considered at the annual general meeting of 26 August 2001, where Mr Cecil addressed the meeting, and owners discussed and voted on the issue of engaging Mr Cecil as a body corporate manager for the scheme. It is apparent from submissions made in response to this application that no written notice of meeting had been distributed to owners in respect of this meeting. It appears that the matter was further considered by owners at an extraordinary general meeting held on 17 November 2001, the minutes of which record the following motion as carried:

“4. Body Corporate Manager. That Mr T.W. Cecil be appointed as the Body Corporate Manager at a cost of $1,040.00 including stationery and postage.

Moved: Mrs Taylor. Seconded: Mr Want

5 in favour. 3 Against”

The Act allows bodies corporate to engage a body corporate manager to supply, (including through the exercise of delegated power), administrative services to the body corporate. However, the legislation also makes provision for the form of engagement that is required, as well as the requisite authority of the body corporate to engage a body corporate manager.

Section 78 of the Standard Module provides for the required form of engagement of a body corporate manager in the following terms:

78.(1) The engagement of a person as a body corporate manager or

service contractor is void if the engagement does not comply with the

requirements stated in subsection (2).

(2) The engagement must—

(a) be in writing; and

(b) state the term of the engagement (including when the term begins

and when it ends); and

(c) state the functions the body corporate manager or service

contractor is required or authorised to carry out; and

(d) state the basis on which payment for the body corporate

manager’s or service contractor’s services is to be worked out.

Section 87 of the Standard Module makes provision for the authority required for a body corporate to engage a body corporate manager. Section 87 provides as follows:

87.(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; 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.

(3) A body corporate may agree to the amendment of an engagement or

authorisation mentioned in subsection (1) only if the amendment is

approved by ordinary resolution of the body corporate.

(4) If subsection (3) is not complied with, the amendment of the

engagement or authorisation is void.

In the course of investigating this application, this office sought further information from Mr Cecil of Richardson & Wrench. In the course of two telephone conversations with a member of this office (on 28 November 2001 and 30 January 2002), Mr Cecil indicated that there was currently no written body corporate management agreement, and no proposed agreement was distributed to owners with the notice of extraordinary general meeting for 17 November 2001.

As there is no written engagement of Mr Cecil or Richardson & Wrench as body corporate manager, I consider that the purported engagement is void in accordance with section 78(1) of the Standard Module outlined above. Further, as the terms of engagement were not provided with the material forwarded to owners for the general meeting that considered the engagement of Mr Cecil as body corporate manager, section 87(2) (also outlined above) has the effect that the purported engagement is void. On this basis, I intend to order that the purported engagement of Mr Cecil as body corporate manager for the scheme is void. However, I do wish to point out that this order does not prevent the body corporate from engaging Mr Cecil as a body corporate manager in the future, providing that the relevant sections of the legislation are complied with.

I note from the minutes of the extraordinary general meeting of 17 November 2001 that the body corporate has appointed Mr Cecil as the elected secretary for the scheme. This is a distinct appointment to the engagement of Mr Cecil as body corporate manager, and is not an issue raised in this application. As a result, this order does not affect Mr Cecil’s appointment as the elected secretary for the scheme.


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