Chifley Court [2003] QBCCMCmr 347 (23 January 2003)

Last Updated: 7 September 2007

DJ ReardonREFERENCE: 0735-2002

ORDER OF AN ADJUDICATOR

MADE UNDER PART 10 OF CHAPTER 6

BODY CORPORATE AND COMMUNITY MANAGEMENT ACT 1997

Number of Scheme:	23260
Name of Scheme:	Chifley Court
Address of Scheme:	101 - 103 Whiting Street LABRADOR QLD 4215

TAKE NOTICE that pursuant to an application made under the abovementioned Act by David Nicklinson as Body Corporate Manager for the "Chifley Court" Body Corporate:

I hereby order that the application for a declaration that the Body Corporate Committee’s decision to terminate the body corporate management services of David Nicklinson is void, is dismissed.

I further order that the application for a declaration that the Body Corporate Committee’s decision to engage Body Corporate Services as a body corporate manager for the scheme is void, is dismissed.


STATEMENT OF ADJUDICATOR’S REASONS FOR DECISION - REF 0735-2002

"Chifley Court" CTS 23260

1. Orders sought

The Applicant, has sought the following orders of an adjudicator under the Body Corporate and Community Management Act 1997 ("the Act"), quote-

"(1) I seek an order to declare invalid the decision of the committee to terminate the services of David Nicklinson as manager.

(2) I seek an order to declare invalid the decision of the committee to appoint "Body Corporate Services" as manager."

Section 223(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 contravention of the terms of, 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)).

The "Chifley Court" community titles scheme consists of 10 lots and common property. The community management statement for "Chifley Court" indicates that the Body Corporate and Community Management (Standard Module) Regulation 1997 ("the Standard Module") applies to the scheme.

2. Application and submissions

This dispute resolution application was made on 4 December 2002. On 5 December 2002, the Commissioner for Body Corporate and Community Management ("the Commissioner") invited the Committee for the Body Corporate to make a written submission about the application. The Secretary for the Body Corporate has provided a written submission about the application.

While the Applicant was advised of his right to obtain copies of submissions pursuant to section 196 of the Act, and to make a written reply to the submissions, the Applicant has declined to exercise this right to date.

On 19 December 2002, the Commissioner made an initial case management recommendation that the application should be the subject of departmental adjudication.

3. Matters in dispute

As stated above, this application concerns the role of the Applicant as body corporate manager for the Body Corporate.

The Applicant has provided the minutes of document titled Resolution passed outside a Committee Meeting dated 31 October 2002. This document purports to record the following 2 resolutions of the Body Corporate Committee:

"1. Body Corporate Management

That the services of David Nicklinson of Nicklinson Realty of 363 Stafford Road Stafford be terminated as at 4 November 2002.

RESOLVED that Motion 1 be Carried. Yes: 5
No: 0

2. Body Corporate Management

That Body Corporate Services be appointed Body Corporate Manager under section 87(1) of the Body Corporate and Community Management Act 1997 for a term of 1 year commencing 11 November 2002 for a fee of $100.00 per lot plus GST per annum for the purposes of providing administrative services to the Body Corporate.

RESOLVED that Motion2 be Carried. Yes: 5

No: 0"

In the supporting grounds to the application, the Applicant expresses a view that the committee for a body corporate does not have the authority to either enter into an engagement, or terminate an engagement, of a body corporate manager.

In his submission, the Secretary outlines a number of concerns of the Committee regarding the Applicant’s performance as Body Corporate Manager for the Body Corporate. However, in light of my comments below, I do not consider that it is necessary for me to assess those concerns at this time. In his submission, the Secretary also states that there is doubt as to whether the Applicant actually had a current and valid agreement with the Body Corporate at the time of the purported termination.

In the course of my consideration of this application, on 24 December 2002 I wrote to the Applicant and requested a copy of the body corporate management agreement between the Body Corporate and the Applicant, and a copy of the minutes of the meeting at which the Body Corporate resolved to enter into the agreement. I provided a copy of this letter to the Body Corporate, care of the Body Corporate Secretary.

In a letter to this Office dated 8 January 2003, the Applicant stated that the body corporate records had already been collected by the Committee, and as a result he did not have access to, and therefore could not provide, the requested material. While I accept this reason for not having access to a copy of the minutes of previous meetings of the Body Corporate, I must say that I find it somewhat peculiar that the Applicant would not retain a copy of an agreement that he was a party to, notwithstanding that he quite properly returned the records of the Body Corporate to the Committee upon request.

I also received a letter from the Body Corporate Secretary dated 10 January 2003, concerning my letter of 24 December 2002. In his letter, the Secretary indicates that at his request, the purported new Body Corporate Manager reviewed the records of the Body Corporate, however, was unable to locate a body corporate management agreement between the Body Corporate and the Applicant. However, the Secretary has provided an extract of minutes of a meeting at which, the Body Corporate resolved to enter into a body corporate management agreement with the Applicant for a term of 3 years and 23 days, commencing on 8 May 1995.

I will now turn to the specific orders sought by the Applicant.

4. Determination

4.1 Validity of termination of body corporate management arrangement

As will be outlined in more detail below, a committee for a body corporate does not have the authority to engage a body corporate manager. Rather, section 87(1)(a) of the Standard Module provides that an engagement of a body corporate manager must be approved by ordinary resolution of the body corporate at a general meeting.

Section 58 of the Standard Module provides the following:

"Amendment or revocation of resolution of general meeting

58. If a resolution without dissent, special resolution or ordinary resolution

is required for a particular purpose, a resolution passed for the purpose may

only be amended or revoked by a resolution of the required type."

It seems to me, that if an ordinary resolution of a body corporate is required to engage a body corporate manager, section 58 requires the same type of resolution, that is, an ordinary resolution of the body corporate, to terminate the engagement.

For these reasons, I agree with the Applicant’s comments that a committee does not have authority to terminate the engagement of a body corporate management agreement.

However as explained previously, I have been unable to verify that there was a current agreement between the Body Corporate and the Applicant at the time of the purported termination. Notwithstanding my comments above, it seems to me that the verification of the existence of a current and valid agreement is a prerequisite to any finding that the Body Corporate has failed to properly terminate the agreement. For these reasons, I intend to dismiss this part of the application.

4.2 Validity of engagement of Body Corporate Services

I agree with the Applicant’s statement that a committee for a body corporate does not have authority to engage a body corporate manager on behalf of the body corporate. Rather, this is a matter that must be considered by the body corporate at a general meeting. In this regard, I refer to section 87 of the Standard Module, which provides the following:

"87 Authority to make engagement or give authorisation

(1) The body corporate may engage a person as a body corporate

manager or service contractor, or authorise a person as a letting agent, only

if--

(a) the engagement or authorisation is approved by ordinary

resolution of the body corporate; and

(b) the terms of the engagement or authorisation are included in the

material forwarded to members of the body corporate for the

general meeting that considers the motion to approve the

engagement or authorisation.

(2) If subsection (1) is not complied with, the engagement or

authorisation is void.

(3) A body corporate may agree to the amendment of an engagement or

authorisation mentioned in subsection (1) only if the amendment is

approved by ordinary resolution of the body corporate.

(4) If subsection (3) is not complied with, the amendment of the

engagement or authorisation is void."

However, given that I am not satisfied that the Applicant had a current and valid body corporate management agreement with the Body Corporate, I am also not satisfied that the Applicant has an appropriate interest or standing to seek an order concerning the validity of the purported engagement of Body Corporate Services. Rather, in my view, this is a matter that could be assessed upon application by a current owner of a lot included in the scheme. For this reason, I also intend to dismiss this part of the application. However, I would point out to the Body Corporate that they should ensure that the current Body Corporate Manager has been properly engaged in accordance with the requirements of the legislation.