Hi-Ho Holiday Motel [2002] QBCCMCmr 89 (18 February 2002)

E J SHANNONREFERENCE: 0710-2001

INTERIM ORDER OF AN ADJUDICATOR

MADE UNDER PART 10 OF CHAPTER 6

BODY CORPORATE AND COMMUNITY MANAGEMENT ACT 1997

Number of Scheme:	14117
Name of Scheme:	Hi - Ho Holiday Motel
Address of Scheme:	2 Queensland Avenue BROADBEACH QLD 4218

TAKE NOTICE that pursuant to an application made under the abovementioned Act by Dominique Roland Chaudet, the Owner of lot 1,

E J SHANNONI hereby order that the application for an interim order be upheld, but not in the terms sought by the applicant. Particularly, I order that body corporate committee not implement any of the disputed motions (ie, motions 8, 9, 10, 11 and 13, 14, 15, 16 and 18, 19 and 20 of the AGM) pending the making of a final order in this matter.

STATEMENT OF ADJUDICATOR’S REASONS FOR DECISION - REF 0710-2001

“Hi - Ho Holiday Motel” CMS 14117

nThe applicant has2
sought the following order of an adjudicator under the Body Corporate and Community Management Act 1997 (the Act), quote -

That motions 8, 9, 10, 11 and 13, 14, 15, 16 and 18, 19 and 20 ... ruled Out of Order by the Chairman, on illegal or unenforceable grounds where that ruling was overturned by Ordinary Resolution and subsequently voted on and carried at the AGM for Hi Ho Motel CTS 14117 held on Monday 19 November 2001, be declared invalid and not to be enforced to protect the Body Corporate whose owners may have voted on these private motions with insufficient or misleading information.

The applicant also sought the following interim order:

That the ruling of the Chairman set out in Item 10 above [refer to the paragraph quoted just above] be upheld until the Commissioner rules on Item 10 to prevent motions subsequently carried being enforced.

Section 225(1) 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)).

The Committee of the Body Corporate, as a condition of being granted an extension of time within which to make submissions on this application, undertook in writing to the Commissioner for Body Corporate and Community Management to not implement the disputed motions of the AGM of 19 November 2001 until an order is made in this matter. This particular business of the Body Corporate Committee, therefore, is on hold pending my determination of this matter. In addition, I consider it important that all affected parties (particularly the owners who were not present at the AGM of 19 November 2001) be afforded an opportunity to make submissions in relation to this application prior to the making of a final order. Accordingly, I have decided that an interim order is necessary in the circumstances.


In the supporting grounds, the applicant nstates that:

Two owners present (representing a majority by exercising proxies) overturned the Chairman rulings, which were considered correct and supported by a legal opinion by Shand Talyor Lawyers ... and considerations by the Chairman on each motion ..., thus allowing the votes on each motion by absent owners (represented by voting papers) to be counted despite those owners not receiving the information on illegal and unenforceable practices given by the Chairman to the meeting resulting in the motions being carried.

Section 45 of the Body Corporate and Community Management (Accommodation Module) Regulation 1997 (“the Regulation”) states:

(1)	The person chairing a general meeting of the body corporate must rule a motion out of order if—

(a) the motion, if carried, would conflict with the Act, this regulation or the by-laws, or would be unlawful or unenforceable for another reason; or

(b) except for a procedural motion for the conduct of the meeting, or a motion to correct minutes—the substance of the motion was not included in the agenda for the meeting.

(2) The person chairing the meeting must give reasons for ruling a motion out of order and the reasons must be recorded in the minutes of the meeting.

(3)	The persons present and entitled to vote may reverse a ruling given under subsection (1)(a) by passing an ordinary resolution disagreeing with the ruling.

Section 46(1) of the Regulation deems that a:

voter is taken to be present at a general meeting if the voter is present at the meeting personally, by proxy or by written voting paper.

At the AGM of 19 November 2001, the Chairperson ruled motions 8, 9, 10, 11 and 13, 14, 15, 16 and 18, 19 and 20 out of order (in accordance with section 45(1) of the Regulation).

The persons present and entitled to vote at the meeting then overturned the Chairperson’s rulings. As stated in the grounds for the application:

Two owners present (representing a majority by exercising proxies) overturned the Chairman rulings ...

Thus it would appear that the two owners present in person at the AGM, by voting in their own rights as well as by exercising their powers to vote by proxy, overruled the Chairperson’s rulings on the disputed motions. Presumably, this was done in accordance with section 45(3) of the Regulation; that is, by passing ordinary resolutions disagreeing with each the Chairperson’s rulings. Once the ordinary resolutions were passed, each motion should have been put up for a vote, and as a result of this vote (and as indicated in the application) motions 8, 9, 10, 11 and 13, 14, 15, 16 and 18, 19 and 20 were passed by ordinary resolution.

To my mind (and subject to any further information that may be provided in any submissions that may be made prior to the making of the final order in this matter), it seems that motions 8, 9, 10, 11 and 13, 14, 15, 16 and 18, 19 and 20 were lawfully passed at the AGM. However, s 223(1) of the Act requires that I make an order that is “just and equitable in the circumstances”. On this point I refer to the grounds on which the application is based; in particular, that the absentee voters at the AGM did not receive “the information on illegal and unenforceable practices given by the Chairman to the meeting”. That is, the absentee owners had no opportunity to read the Shand Taylor legal opinion (upon which some of the Chairperson’s rulings out of order were based), nor were they made aware of the Chairperson’s reasons for ruling the motions out of order.

In a submission made, on behalf of the Body Corporate, by Karen Schuch (the current Chairperson of the Body Corporate) Ms Schuch states that:

The minutes of the AGM were sent to all owners at the end of November along with the chairman’s rulings and copies of the legal opinion by Shand Taylor.

Her submission goes on to say that:

After receiving the legal opinion and after receiving the chairman’s comments the owners learned in December, that members of the previous committee had devised a tactic to have the owners’ votes ‘invalidated’ by this application. Their response was not to change their vote and agree with the chairman’s rulings but rather they took an opposite and extreme position in the matter. Twenty four owners of lots in the CTS out of a possible 36 responded by signing requisitions under S. 59 of the Act [sic] to cancel the option of the manager to have his contract renewed for another year, revoke the manager’s delegation as secretary and appoint instead, a committee member as chairman and most importantly to re-affirm their determination to uphold the motions that passed at the AGM which are in dispute in this application.

Whilst I can accept that these 24 owners (along with the other owners) received copies of the AGM minutes (including the reasons for the Chairperson’s rulings out of order) and the Shand Taylor legal opinion, prior to their requesting an extraordinary general meeting under s 59 of the Regulation, I cannot accept that just because each of these 24 owners respectively requested an EGM, that that, in itself, is clearly indicative of the way in which each of them will vote on the motions to be considered at the EGM.

Given the circumstances, I consider it particularly important to ensure that all affected parties, particularly absentee owners, be provided with an opportunity to make submissions in relation to this application prior to the issuing of a final order.

My interim order, in the meantime, is that I order the Body Corporate Committee to not implement any of the disputed motions (ie, motions 8, 9, 10, 11 and 13, 14, 15, 16 and 18, 19 and 20 of the AGM) pending the making of a final order in this matter.

Whilst I have upheld the application for an interim order, I have not issued the interim order in the terms sought by the applicant (which required that the Chairperson’s rulings out of order be upheld pending the making of a final order). As indicated above, my prima facie position, at this point of time at least, is that it appears that the Chairperson’s rulings out of order were lawfully overturned at the AGM. Accordingly, I can see no overriding justification to reinstate them through the interim order. In any event, my interim order meets the requirements of the applicant in so far as it “prevent[s] motions subsequently carried [viz, motions 8, 9, 10, 11 and 13, 14, 15, 16 and 18, 19 and 20 of the AGM] being enforced”.

This matter will now be investigated in accordance with the usual processes undertaken by this office.

All parties should note the provisions of section 225(2) of the Act which provides that -

An interim order -

a)	has effect for a period (not longer than 3 months) stated in the order; and
b)	may be extended, renewed or cancelled by the adjudicator until a final order is made; and
c)	may be cancelled by a later order made by the adjudicator; and
d)	if it does not lapse or is not cancelled earlier - lapses when a final order is made by the adjudicator.

All parties should be aware of this section and its effect on this interim order. In particular, the applicant may need to request a renewal of the interim order, before a final order is made. The onus of renewing an interim order rests with the applicant. This office will not automatically renew an interim order.2n