Adam T Apartments [2003] QBCCMCmr 214 (10 November 2003)

Last Updated: 17 May 2005

REFERENCE: 0568-2003

ORDER OF AN ADJUDICATOR

MADE UNDER PART 9 OF CHAPTER 6

BODY CORPORATE AND COMMUNITY MANAGEMENT ACT 1997

Number of Scheme:	4118
Name of Scheme:	Adam T Apartments
Address of Scheme:	QUEENSLAND

TAKE NOTICE that pursuant to an application made under the abovementioned Act by Christine June Dawson, the co-owner of lot 1

I hereby order that the annual general meetings for 2001 and 2002 purportedly held on 27 March 2003 shall be deemed to have been extraordinary general meetings, and shall be so described in the minutes of those meetings. I further order that – (1) Christine June Dawson is appointed as administrator to call, hold and chair an extraordinary general meeting ("the meeting") of "Adam T Apartments" within two (2) months of the date of this order for the purpose of - • the consideration of motions included on the agenda of the meeting; and • the election of committee members (if necessary). (2) The administrator shall hold the appointment for the period beginning from the date of this order until of the close of the meeting ordered. I further order that within seven (7) days of the date of this order the administrator must give a copy of this order to each person whose name appears on the roll as the owner of a lot in the scheme ("lot owners"). I further order that – (1) For the purpose of calling, holding and chairing the meeting, the administrator shall have all the powers of the chairperson, secretary and treasurer of the body corporate, and of the committee, with the exception of the following powers - • to further delegate any of those powers to another person; or • to incur any expenditure apart from that necessary for the calling and holding of the meeting, except in regard to expenses that must necessarily be met and are capable of being authorised and incurred by a committee under the legislation. (2) The nomination and election procedures for the election of committee members shall be in the same manner as provided for in sections 14 and 15 of the Body Corporate and Community Management (Standard Module) Regulation 1997. (3) The administrator must give at least fourteen (14) days written notice inviting owners to submit motions for inclusion on the agenda of the meeting. (4) The meeting shall be otherwise called and held in accordance with the Act, particularly sections 42 and 45 of the Standard Module and all other provisions relating to meetings under Part 4 of the Standard Module. (5) The administrator must not give the notice of meeting to owners earlier than twenty-one (21) days from the date of this order. I further order that Peter Moran shall refund to the body corporate within 1 month of the date of this order any and all monies received by him for secretarial duties in the 2001, 2002 and 2003 financial years in excess of $1,200 per annum. I further order that Peter Moran shall, within 7 days of the date of this order, hand to the applicant, Christine June Dawson, all body corporate books and records within his possession, or over which he has control.

STATEMENT OF ADJUDICATOR’S REASONS FOR DECISION - REF 0568-2003

"Adam T Apartments" CTS 4118

The applicant, Christine June Dawson, has sought an order of an adjudicator under the Body Corporate and Community Management Act 1997 (the Act) as follows:

To dismiss present committee and appoint an administrator.

Rule 2001, 2002 and 2003 AGMs out of order.

Administrator to convene new general meeting and new committee be elected and that the present committee members not be allowed to hold same positions.

To ensure new committee operates under Standard Module and will hold regular committee meetings.

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)).

In the supporting grounds the applicant stated:
The committee comprises of 3 owners, being the owners of lots 3, 4 and 5 – regular committee meetings are not held
The financial year ends 31 December
Regular annual general meetings have also not been held – in 2003 the annual general meetings for 2001, 2002 and 2003 were all held on the one night
On 22 July 2003 the applicant and another owner requested that an extraordinary general meeting be held – to date that has not occurred

All owners were invited to respond to the application.

Submissions were received from all owners, including from the applicant’s mother, who is a co-owner of lot 1 with the applicant. Opinion was evenly divided on the merits of the application.

The present chairperson, who resides overseas, and will remain away from Australia until July 2004, expressed a preference for the appointment of an external body corporate manager "to avoid any further internal issues between unit owners." She did, however, state that she has not experienced problems with the management of the units as she has at all times been kept informed of such matters by the present secretary, Mr Moran.

There appeared to be consensus on the appointment of a body corporate manager, although several owners expressed the view that the present application would only impede progress towards that ultimate end.

I met with the applicant and Mr Moran on 31 October 2003. I noted that annual general meetings had not been held in 2001 and 2002. I pointed out to the parties that the Body Corporate and Community Management (Standard Module) Regulation 1997 (Standard Module), by which this scheme is regulated, required that an annual general meeting be held within 3 months after the end of each of the scheme’s financial years (s.60). I also pointed out the requirements for selecting a committee (s.11), calling for nominations (s.13) and allowing owners the opportunity to submit agenda motions (s.41). I also pointed out that the remuneration paid to Mr Moran exceeded the level for major spending and a second quote for secretarial services should have been obtained and should have been proposed in an alternative motion for owners’ consideration (s.104).

I also pointed out that Mr Moran should have called and held the requested extraordinary general meeting within 6 weeks after the notice was given to him (s.61(3)). Mr Moran explained that he had to get the books up to date, and then submit them to an auditor, so as to be in a position to hand over the management to a body corporate manager, as was foreshadowed at the meetings held on 27 March 2003. Mr Moran further stated that he had also been finalising quotes for body corporate management.

After the meeting, I received a further submission from Mr Moran on 2 November 2003. The submission was provided to the applicant, who, in turn, replied to that submission on 6 November 2003.

I have a number of concerns with the way in which this body corporate has been administered over the past few years. Firstly, and most obviously, annual general meetings were not held in 2001 and 2002. As I explained to Mr Moran at the meeting, the failure to hold such meetings cannot then be remedied by holding three annual general meetings on the one night. Secondly, Mr Moran has stated that he has found his role as secretary/treasurer very demanding, particularly when he has had other pressing family commitments which have competed for his time. Thirdly, owners appear not to have been invited in writing to nominate for committee positions, or to submit motions for consideration. Fourthly, the level of remuneration paid to Mr Moran exceeded the level for major spending for this scheme ($1,200) which is calculated by multiplying the number of lots by $200.

In addition, Mr Moran’s failure to hold the requested extraordinary general meeting within the requisite period is a further concern. Although I am sure that Mr Moran has tried to keep owners informed over the years, the simple fact is that if he did not have the time to properly attend to body corporate business in a timely fashion, then he should have handed the role over to someone else. Furthermore, much of the documentation produced by Mr Moran has not been in the correct form.

I propose to deal with this matter as follows:

The meetings held on 27 March 2003 were validly called in that 21 days’ notice was given, and all owners were in attendance, either by voting paper or in person. The notices of meeting and accompanying material did not strictly comply with the requirements of the Act as to form, and the motions on the agenda were incorrectly described as "overtures" (terminology which has no relevance to this jurisdiction), but the subject matter of the motions was appropriate for consideration by the body corporate, albeit that it was late. To that extent therefore, I intend to allow the meetings to stand. However they should not have been described as the annual general meeting for 2001 and the annual general meeting for 2002, because the time had long passed for those meetings to have been held, but they should in fact have been described as extraordinary general meetings. My order in respect of these meetings, therefore, is that they shall be deemed to have been held as extraordinary general meetings, and the minutes shall be amended to reflect this change of description. I do not intend to otherwise invalidate the meetings.

The meeting purporting to be the annual general meeting for 2003 was held within the prescribed time, namely within 3 months of the end of the financial year, and may therefore be so described. Although once again the notice of meeting and meeting material did not strictly comply with the requirements of the Act, I am prepared to allow the meeting to stand. I think it is more important for this body corporate to move on, and ensure that in future all meetings comply with the requirements of the Act than it is to overturn previous decisions which are defective predominantly as to form.

I also do not propose to invalidate the motions to ratify payments to the secretary, even though the amounts involved exceeded the limit for major spending, as mentioned above. I propose instead to order that the secretary refund to the body corporate any amount received by him in excess of $1,200 per year. I have made this decision because owners appear to recognise that the secretary has attended to various matters on behalf of the body corporate over the past number of years, even though he may not have acted within time limits or as quickly as he should have in relation to some matters, namely the hazardous vegetation. Further, owners ratified the payments after the event, so they appear to have been prepared to accept the secretary’s shortcomings.

I do not accept, however, that Mr Moran is the appropriate person to call the requested extraordinary general meeting. He has had more than enough time to do so, and time is fast approaching for owners to be invited to nominate for committee and propose motions for the annual general meeting required to be held before 31 March 2004. If there is any more delay in holding the extraordinary general meeting, the purpose of it will have been lost. I also note that the motion which was proposed referred to a trial period of 6 months. Given the delay in calling the extraordinary general meeting, that trial period will obviously have to be amended to accommodate the looming annual general meeting. I therefore propose to order that the applicant be appointed as administrator in order to call and hold the meeting. At the extraordinary general meeting, if the motion as proposed by the owners of lots 1 and 2 (for secretarial and treasury duties to be carried out by Ms Dawson and Ms Culpeper) is defeated, an interim committee should be elected to manage the day to day administrative needs of the body corporate until the next annual general meeting. The nomination and election process should be carried out in accordance with sections 14 and 15 of the Standard Module. There is nothing to prevent owners from nominating present members of the committee to serve on the interim committee, although given Mr Moran’s acknowledged difficulties in attending to body corporate business in a timely fashion, and his inability to follow the proper format, I would think that he would not be an appropriate choice for chairperson, secretary or treasurer, but he may wish to serve as an ordinary member of the committee. Owners may also propose other motions for inclusion on the agenda of the extraordinary general meeting, in addition to the motion proposed by the owners of lots 1 and 2 on 22 July 2003, provided those motions are conveyed in writing to the administrator within the time frame allowed in the order.

I further propose to order that Mr Moran hand all body corporate books and records in his possession, or over which he has control, to the applicant within 7 days of the date of this order. At the meeting on 31 October 2003, Mr Moran advised me that the books had been with the auditor for over a week. As a further period of 10 days has elapsed, it would not be unreasonable to expect that the books should now be available, particularly as this is a small scheme.