Hi-Ho Holiday Motel [2002] QBCCMCmr 99 (22 February 2002)

E J SHANNONREFERENCE: 0079-2002

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 KIM DOUGLAS YOUNG, owner of lots 4 and 5,

E J SHANNONI hereby order that the EGM scheduled for 13 February 2002, is to take place at 9 am Tuesday 26 February (or if this time and date is not considered appropriate by any member of the committee, then another time and date on or before 28 February 2002, as determined by the majority of committee members) to consider all of the motions as originally proposed for the EGM, with the exception that when counting the vote on the motion reading:

"That the Body Corporate instructs the Committee to carry out faithfully the motions carried at the AGM subject to such considerations as may be necessary to avoid conflict with any existing contract and with the proviso that it is clearly understood the motions were always intended to as a guide to future actions and were not intended to apply until the current Management contract expires"

that that motion, if carried, must not be taken to apply to motions 8, 9, 10, 11 and 13, 14, 15, 16 and 18, 19 and 20 of the AGM.

I further order the chairperson, prior to the EGM, to notify all owners in writing that contrary to the statement made in her letter of 25 January 2002, all persons eligible to vote at the EGM, will be able to vote in person at that meeting if they so desire. Voters who have already elected to vote by completing voting papers, in accordance with section 50(2) of the Regulation, will be taken to have cast their votes for the motions to be considered at the EGM unless they elect to attend the EGM in person to vote, in which case their written votes will not be counted.2n
STATEMENT OF ADJUDICATOR’S REASONS FOR DECISION - REF 0079-2002

“Hi-Ho Holiday Motel” CTS 14117

nThe applicantn Kim Douglas Young, 4ownerthe owner of lots 4 and 5, nhas2
sought the following order of an adjudicator under the Body Corporate and Community Management Act 1997 (the Act), quote -

“to instruct the body corporate of Hi-Ho Holiday Motel CTS 14117 to cause a letter to be sent to all lot owners advising them that, contrary to an unauthorized letter sent to them by committee chairperson, Karen Schuch, all lot owners have and retain the right to vote in person at general meetings.”

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)).

In the supporting grounds, the applicantn nstates that:

“1. The committee chairman sent an unauthorized letter dated 25 January 2002 (with unauthorized minutes attached) giving an illegal voting instruction to owners indicating they “cannot vote at the meeting” referring to the scheduled EGM of 13 February 2002.

2. Certain motions proposed for the EGM scheduled for 13 February 2002 concern issues which remain the subject of an awaited decision by the adjudicator following a submission made to the office of the Commission for BCCM by Dominique Chaudet relating to matters raised at the AGM in November 2001.”

On 13 February 2002, I issued an interim order ordering that the EGM scheduled for 13 February 2002 must not proceed pending the making of a final order in relation to this matter. I also ordered the body corporate committee to lodge by 20 February 2002 a copy of:

• the contract engaging the services of the current body corporate manager; and

• the notice of the EGM called for 13 February 2002 including the agenda.

Section 50(1) of the Body Corporate and Community Management (Accommodation Module) Regulation 1997 (“the Regulation”) provides that:

“Voting at a general meeting must be done in the way provided in this section unless the body corporate decides by special resolution that voting is to be done in another way.”

Section 50(2) of the Regulation details how voting is to occur at a general meeting (unless, of course, a special resolution was made in accordance with section 50(1) of the Regulation):

“Voting by persons present at a general meeting must be by show of hands, or by giving completed voting papers to the person chairing the meeting not later than the start of the meeting, unless-

(a)	a ballot is required by the Act, this regulation or the by-laws; or
(b)	the person chairing the meeting decides a ballot is necessary to ensure an accurate count of votes.”

As indicated in the statement of reasons to my interim order, I cannot see how the secret ballot referred to in the letter, dated 25 January 2002, of the chairperson of the body corporate, Ms Karen Schuch, falls within the ambit of section 50(2) of the Regulation - unless a special resolution under section 50(1) of the Regulation authorising this to occur had been passed by the body corporate.

It is evident from the submission of Ms Schuch, of 15 February 2002, that the secret ballot had not been authorised by a special resolution.

In her submission, Ms Schuch states that:

“My action in advising owners to not vote in person at the EGM was based on my understanding of the report of the conversations Mr. Lamont had with Mr. Grimsey.”

Moreover, she undertook in this submission:

“to send to all owners of the body corporate [a letter] advising them of their right to vote in person at general meetings contrary to advice they previously received from me.”

I am satisfied, on this basis, that the EGM originally scheduled for 13 February 2002 may proceed, providing that the persons eligible to vote at the EGM are able to do so in accordance with section 50(2) of the Regulation.

The applicant also submits that:

Certain motions proposed for the EGM scheduled for 13 February 2002 concern issues which remain the subject of an awaited decision by the adjudicator following a submission made to the office of the Commission for BCCM by Dominique Chaudet relating to matters raised at the AGM in November 2001 [viz, application 0710-2001]”

Seven motions are proposed for the EGM. They may be succinctly summarised as:

(a) confirmation of minutes of the AGM of 19 November 2001;

(b) termination of body corporate manager;

(c) appointment of Colin Lamont as secretary;

(d) ratification of all decisions relating to the delegation of secretarial duties to Mr Lamont;

(e) acting on motions from AGM;

(f) appointment of body corporate manager; and

(g) appointment of body corporate manager (alternative motion).

In respect of application 0710-2001, I issued the interim order that the body corporate committee must 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 of 19 November 2001) pending the making of a final order in that matter.

The disputed motions of the AGM may be succinctly summarised as:

8. voting by secret ballot;

9. banking of funds;

10. disbursement of commissions;

11. appointment of honorary members;

13. processing of payments;

14. obtaining a model for minute taking for subsequent use by the body corporate;

15. discounts of levies;

16. granting of discounts;

18. postponement of the appointment of paid secretarial services for the year 2001/2 until such time as the committee has obtained 3 or more quotes;

19. disclosure of statement data; and

20. security of body corporate funds.

The only motions proposed for the EGM, which, in my opinion, may be caught by the interim order issued in respect of application 0710-2001, are motions identified as (c) and (e) above.

Motion (c) is more specifically described in the notice calling for the EGM as:

That the Body Corporate appoint Mr Colin Lamont as Secretary to the Body Corporate for the remainder of the current year at no cost for his services provided that nothing in this motion will prevent the Committee from delegating such secretarial tasks as it requires, such as calling AGM or EGM’s, to the newly appointed management company.

Given that the motion on hold under the interim order issued in respect of application 0710-2001 applies to the appointment of paid secretarial services whereas motion (c) proposed for the EGM relates to the appointment of Mr Lamont for the remainder of the current (presumably, financial) year, at no cost for his services, I do not see this motion as conflicting with the AGM motion that is frozen under the interim order.

Motion (e) of the EGM is more specifically described as:

“That the Body Corporate instructs the Committee to carry out faithfully the motions carried at the AGM subject to such considerations as may be necessary to avoid conflict with any existing contract and with the proviso that it is clearly understood the motions were always intended to as a guide to future actions and were not intended to apply until the current Management contract expires.”

This motion, on the other hand, clearly conflicts with the interim order issued under application 0710-2001. That interim order froze 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 respect of that application. All of these motions were purportedly passed at the AGM. Therefore, if the body corporate were to instruct the committee “to faithfully carry out” those motions it will contravene my interim order issued in 0710-2001.

In her submission of 15 February 2002, Ms Schuch indicates that it is imperative that the EGM scheduled for 13 February 2002 be convened prior to 28 February 2002, particularly because under the terms of engagement of the body corporate manager (“the Agreement”):

“The engagement [of the body corporate manager] will be extended by the body corporate for one year from the end dated stated in schedule A item 1, unless the body corporate decides at a general meeting before that date not to extend this engagement for a further term of one year.”

Schedule A, item 1 of the Agreement provides the:

• Beginning Date of the Agreement to be 1 March 2001; and

• End Date of the Agreement to be 28 February 2002.

(I note that the Agreement copy provided under the submission made by Ms Karen Lacey, of Body Corporate Services, indicates the Beginning Date of the Agreement to be 01/03/02 and the End Date to be 28/02/03. This must be incorrect. Presumably this copy of the Agreement had been prematurely amended in anticipation that Body Corporate Services will continue to be the body corporate manager for Hi-Ho Holiday Motel after 28 February 2002.)

Given the circumstances, I consider it appropriate to order the EGM scheduled for 13 February 2002 to take place prior to 28 February 2002. Accordingly, I order that the EGM originally scheduled for 13 February 2002, take place at 9 am Tuesday 26 February (or if this time and date is not considered appropriate by any member of the committee, then another time and date on or before 28 February 2002, as determined by the majority of committee members) to consider all of the motions as originally proposed for the EGM, with the exception that when counting the vote on the motion identified as (e) above, that that motion, if carried, must not be taken to apply to motions 8, 9, 10, 11 and 13, 14, 15, 16 and 18, 19 and 20 of the AGM.

I further order the chairperson, prior to the EGM, to notify all owners in writing that contrary to the statement made in her letter of 25 January 2002, all persons eligible to vote at the EGM, will be able to vote in person at that meeting if they so desire. Voters who have already elected to vote by completing voting papers, in accordance with section 50(2) of the Regulation, will be taken to have cast their votes for the motions to be considered at the EGM unless they elect to attend the EGM in person to vote, in which case their written votes will not be counted. I make this final element of the order in cognisance of the fact that the voting paper for the EGM originally scheduled for 13 February 2002 required voters to sign their voting paper; thus each “secret ballot” filed for the EGM scheduled for 13 February 2002 should be able to be linked to a particular voter.