Indigo Blue Beachside Residences [2003] QBCCMCmr 189 (30 October 2003)

Last Updated: 17 May 2005

REFERENCE: 0561-2003

ORDER OF AN ADJUDICATOR

MADE UNDER PART 9 OF CHAPTER 6

BODY CORPORATE AND COMMUNITY MANAGEMENT ACT 1997

Number of Scheme:	30961
Name of Scheme:	Indigo Blue Beachside Residences
Address of Scheme:	186 The Esplanade BURLEIGH HEADS QLD 4220

TAKE NOTICE that pursuant to an application made under the abovementioned Act by Mr John Scutt, a committee member of Indigo Blue

I hereby order that the body corporate committee meeting of 15 August 2003 was invalid and all resolutions passed at that meeting are also invalid.

STATEMENT OF ADJUDICATOR’S REASONS FOR DECISION - REF 0561-2003

"Indigo Blue Beachside Residences" CTS 30961

Application

The Indigo Blue Beachside Residences Community Titles Scheme (Indigo Blue) is a 44 lot scheme under the Body Corporate and Community Management Act (Act) and the Act’s Accommodation Module Regulation (Accommodation Module). It consists of a high rise residential scheme that has only just been built.

This application is by John Scutt (applicant), an owner of lot 25, and a member of the body corporate committee seeking to invalidate a committee meeting on the basis that he was unlawfully excluded from attending that meeting.

On 27 August 2003 the applicant, obtained an urgent interim order that the body corporate "not carry out any resolutions made at the committee meeting held on 15 August 2003, pending a final determination of this application".

Background

The factual background to this dispute concerns a claim by the applicant that he was initially given permission to attend the committee meeting on 15 August 2003 by telephone but this permission was withdrawn at the commencement of the meeting. He claims this resulted in him being unlawfully excluded from participating in the meeting.

I am willing to accept the evidence of the applicant, regarding the committee meeting of 15 August 2003, that:

• On 12 August 2003 he sent an email to the chairperson of the committee saying that he would be in Sydney on the day of the meeting but that he would be able to attend the meeting by conference call;
• On 14 August 2003, he sent a further email to the chairperson (and other members of the committee) in relation to the committee meeting saying "I can attend by conference call between 10am-12.30pm and am happy to pick up the cost of the call. I have not heard from you since 12 August so I am not sure what you wish to do. In the event that you are unable to conference call me in I would ask the various resolutions voted on at tomorrow’s BC meeting be faxed to me on 02 89014827 and I will return to Ernst (Angela) by 9am Monday 18 August 2003";
• On 15 August 2003, the morning of the meeting, the chairperson replied to the applicant’s email of 14 August 2003. This email was sent at 7.16 am and stated "Hi John, I have a phone that works on speaker. I hope this is suitable. If it doesn’t work I shall arrange for you to vote by fax. Regards, Warren";
• Approximately 10 minutes before the meeting the chairperson telephoned the applicant. The chairperson told the applicant that the chairperson’s mobile telephone had a speaker facility so the applicant could attend the meeting by telephoning that number, at his own expense;
• At the start of the meeting the chairperson telephoned the applicant and told him that the majority of the committee had voted against the applicant attending by conference call because they did not want to set a precedent of allowing committee members to attend by conference call.

One further factual matter is that Annette Davie, one of the committee members, has submitted a statement saying that the committee meeting was held in her apartment and that she does not have a phone suitable for making conference calls. However, this submission is not relevant as I have accepted the applicant’s submission that the chairperson had told him he could call the chairperson’s mobile telephone that had a speaker facility, not Annette Davie’s telephone.

Submissions

The applicant’s main submissions were to the effect that:

• The committee led him to believe he could attend the committee meeting by telephone;
• The committee unlawfully excluded him from the committee meeting; and
• The meeting should therefore be invalidated.

Submissions were also made on behalf of the body corporate. A number of these submissions were not directly relevant to the application and were simply general submissions about the conduct of the meeting. However, submissions relating to the applicant’s claim were to the effect that:

• The applicant was not led to believe that he would be permitted to participate in the meeting by telephone or facsimile. In particular, the comment the applicant relies on was made less than three hours prior to the meeting. Further, the applicant was given an opportunity to appoint a proxy and declined this opportunity;
• Legislation requires that attendance at a committee meeting be in person or by proxy and does not address the issue of conference call facilities;
• All members present at the committee meeting were aware of the applicant’s views, at least in respect of the issue regarding location of the building signage;
• The applicant appears to have been most concerned with issues about the location of the building signage and car wash facilities and if conference facilities were provided to him there would have been insufficient time to cover a number of other important issues that were to be addressed at the meeting; and
• The meeting was held in Ms Davie’s apartment and she has advised that the telephone facilities in this apartment are not suitable for conference calls.

Decision

Exclusion from committee meeting

The applicant claims that he was unlawfully excluded from participating in the committee meeting of 15 August 2003.

Exclusion of a committee member from participating in a committee meeting will normally invalidate the meeting and any resolutions passed at it, unless there is some lawful excuse for the exclusion.

The applicant has established that the chairperson agreed to arrangements by which the applicant would attend the meeting by telephone. These arrangements were of a procedural nature for the meeting, being something that was within the power of the chairperson to determine.

The actions of the applicant indicated that if he was not given permission to attend by telephone he would have taken some steps to appoint a proxy or fax through his vote on the motions being considered. The applicant had demonstrated to other committee members that he had a real interest in certain of the motions being passed, to the extent that legal advice was sought in respect of some of the motions. The applicant followed up an initial request to attend by telephone that was not responded to by the chairperson. Further, the applicant’s request to attend by telephone was accompanied by an alternative suggestion of being sent a voting paper by facsimile. If the applicant had been refused permission to attend by telephone it seems likely he would have made alternative arrangements to ensure his vote was accepted at the meeting.

The committee is entitled to establish a practice by which it will not allow committee members to attend by telephone. However, it was unreasonable of the committee to implement this practice in respect of the applicant for the meeting of 15 August 2003 where the applicant had already relied upon the chairperson’s permission to attend that meeting by telephone. The effect of this decision was to exclude the applicant from participating in the meeting.

In summary, the chairperson led the applicant to believe that he would be entitled to attend the committee meeting by telephone. By relying on this, the applicant lost any realistic opportunity to attend the meeting by proxy. In these circumstances, it was unreasonable for the committee to subsequently withdraw permission for the applicant to attend by telephone.

Due to the exclusion of the applicant, the committee meeting (and any resolutions passed at it) should be invalidated. This is, of course, unless the body corporate is able to show a lawful reason for this exclusion. The relevant submissions of the body corporate are considered below.

Submission that physical attendance is necessary

The Act neither expressly authorises or expressly prohibits attendance at committee meetings by telephone. Some provisions recognise that a committee member may be present in person or by proxy (for example, Accommodation Module 31(1)(a)). However, on their plain meaning, the words "in person or by proxy" merely indicate the distinction between a committee member attending personally or appointing a proxy to attend on their behalf. There is no requirement for a person attending personally to be physically present at the meeting. A committee member in attendance at a committee meeting via a conference call or video conference would be attending the meeting "in person".

Submission that the applicant was not prejudiced

On balance, it appears that the applicant’s right to attend the committee meeting (at least by proxy) was prejudiced by the subsequent refusal of the committee to allow the applicant to attend by telephone. Permission to attend the meeting by telephone was granted to the applicant less than three hours before the meeting. However, if permission had been refused at that time, the applicant would still have had time to discuss the issues with the chairperson or another committee member and appoint a proxy to vote on motions on his behalf. The applicant was deprived of this opportunity. The suggestion that the applicant could have organised a proxy after the meeting had actually started did not amount to a realistic opportunity to appoint a proxy.

Other submissions

I have also considered submissions to the effect that the committee was already aware of the applicant’s views on certain matters and that there would have been insufficient time to consider all matters at the meeting if the applicant was allowed to attend. These submissions have no merit. In fact, these submissions would tend to indicate that the applicant was refused permission to attend by telephone because the committee wished to exclude his views, rather than because the committee did not approve of the practice of attending by telephone.

Further, as discussed above, the submission that the apartment phone was not suitable for conference calls is of no relevance as I have accepted that the proposed arrangement was for the applicant to telephone the mobile phone of the chairperson.

Order

I am persuaded that the applicant was unlawfully excluded from attending the committee meeting. For this reason the meeting itself and any resolutions passed at it should be invalidated.

If the committee considers it to be in the body corporate’s interest that any of these invalidated resolutions are passed, the committee should call another meeting and seek to lawfully pass those resolutions.