Fountain View [2003] QBCCMCmr 159 (9 October 2003)

Last Updated: 17 May 2005

REFERENCE: 0658-2003

INTERIM ORDER OF AN ADJUDICATOR

MADE UNDER PART 9 OF CHAPTER 6

BODY CORPORATE AND COMMUNITY MANAGEMENT ACT 1997

Number of Scheme:	31366
Name of Scheme:	Fountain View
Address of Scheme:	67 Nerang Street, NERANG QLD 4211

TAKE NOTICE that pursuant to an application made under the abovementioned Act by the Body Corporate of Fountain View CTS 31366

I hereby order that the annual general meeting for Paradise Park Resort CTS 28501 scheduled to take place on 10 October 2003 shall not proceed as the scheme ended its existence as a separate community titles scheme on 19 September 2003 upon amalgamation under Chapter 2 Part 10 of the Body Corporate and Community Management Act 1997.

STATEMENT OF ADJUDICATOR’S REASONS FOR DECISION - REF 0658-2003

"Fountain View" CTS 31366

The applicant, the body corporate for Fountain View CTS 31366, has sought an order of an adjudicator under the Body Corporate and Community Management Act 1997 (the Act) as follows:

1) That the annual general meeting due to be held on Friday 10 October 2003 at 11.00am be deferred and reconvened and that the committee prepare the agenda for the reconvened annual general meeting in accordance with section 45 of the Standard Module. Such agenda shall be in accordance with the instructions of the committee.
2) That the motion passed at the annual general meeting held on 28 October 2002 appointing Body Corporate Administration as body corporate manager for Paradise Park Resort CTS 28501 for three years commencing on 1 November 2002 be ruled invalid and of no effect and that the body corporate manager return all body corporate assets to the chairman on behalf of the committee, including all cheque books, documents, files, records and other material.

Section 276(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 the Act or the community management statement; or

(c) a claimed or anticipated contractual matter about-

(i) the engagement of a person as a body corporate manager or service contractor for a community titles scheme; or

(ii) the authorisation of a person as a letting agent for a community titles scheme.

An order may require a person to act, or prohibit a person from acting, in a way stated in the order (section 276(2)). An adjudicator's order may contain ancillary and consequential provisions the adjudicator considers necessary or appropriate (section 284(1)).

Section 279(1) of the Act allows an adjudicator to make an interim order if satisfied, on reasonable grounds, that an interim order is necessary because of the nature or urgency of the circumstances of the application.

The application was forwarded to the Commissioner’s office by facsimile transmission at 2.47pm on 6 October 2003, with the original documents being received by Express Post on 7 October 2003. Given the constraints of time, a teleconference was arranged between the solicitors for the applicant and the respondent body corporate manager and the adjudicator for 9.15am on 9 October 2003.

The teleconference proceeded as arranged. Mr Clayton Glenister, of McDonald Balanda & Associates, represented the applicant, and Mr Frank Higginson of Hynes Lawyers, represented the respondent. Mr Higginson advised me that he had been provided with a copy of the application late yesterday afternoon, but owing to previous commitments had been unable to consider it prior to the teleconference.

Mr Glenister outlined the applicant’s argument, which was essentially that an annual general meeting cannot take place for a body corporate which has been dissolved. Mr Higginson agreed.

I note that the Notice of Meeting was dated 19 September 2003. It was on that day that the community management statement for the amalgamated scheme registered.

Section 86 of the Act provides:

Effecting amalgamation of community titles schemes

(1) The amalgamation of schemes A and B must be recorded under the

Land Title Act, sections 115W and 115X.24

(2) The amalgamation takes effect under that Act, section 115X.

Section 87 of the Act provides:

Dissolution of bodies corporate on amalgamation

(1) When schemes A and B are amalgamated, the bodies corporate for

schemes A and B are dissolved.

(2) On dissolution of the bodies corporate for schemes A and B, the

rights and liabilities of the body corporate for schemes A and B are vested

in the body corporate for scheme C.

(3) Body corporate assets for schemes A and B (including freehold land

and other body corporate assets registered or otherwise held in the name of

a dissolved body corporate) are vested in the body corporate for scheme C,

and may be dealt with by the body corporate as if they were registered or

otherwise held in its name.

(4) If the amalgamation is authorised under a court order, subsections (2)

and (3) have effect subject to the order.

It is regrettable that owners will be inconvenienced by the cancellation of the scheduled meeting, but clearly the meeting cannot proceed. I have ordered accordingly.

I have not made the second order sought by the applicant as I have no jurisdiction in relation to a scheme which has been dissolved. I note, however, that the motion appointing Body Corporate Administration involved expenditure in excess of $41,000.00 over the three year term of the engagement, which exceeded the limit for major spending for the scheme. Had I had jurisdiction to consider the second order, I would have ordered that the motion was void, for the reason that owners were not given the opportunity to consider a second quotation (which should have been incorporated in a second motion). This is the type of order that is routinely made by adjudicators when a body corporate does not comply with section 104 of the Body Corporate and Community Management (Standard Module) Regulation 1997 (Standard Module).

I also noted with interest that the body corporate manager did not include certain motions (dealing with the termination of the body corporate manager’s appointment) proposed by the committee on the agenda of the scheduled annual general meeting, on the basis that the motions had not been received before the end of the scheme’s financial year. The body corporate manager ought to have known that the time restriction imposed in section 41(2) of the Standard Module only applies to motions submitted by a member of the body corporate, not the body corporate committee. It is now immaterial, given that the meeting cannot proceed, but the body corporate manager should ensure that a similar error is not made in future.

The amalgamated scheme will now be required to hold its first annual general meeting.