Village Square [2003] QBCCMCmr 368 (6 February 2003)

Last Updated: 7 September 2007

RA MeekREFERENCE: 0668-2002

ORDER OF AN ADJUDICATOR

MADE UNDER PART 10 OF CHAPTER 6

BODY CORPORATE AND COMMUNITY MANAGEMENT ACT 1997

Number of Scheme:	24715
Name of Scheme:	Village Square
Address of Scheme:	2 Sickle Avenue HOPE ISLAND QLD 4212

TAKE NOTICE that pursuant to an application made under the abovementioned Act by

Jennifer Beth Frank, the owner of lots 65, 245 and 246 and William Fleetwood and Virginia Margaret Fleetwood, the owners of lots 44 and 176


RA MeekI hereby order that the application by Jennifer Beth Frank, the owner of lots 65, 245 and 246 and William Fleetwood and Virginia Margaret Fleetwood, the owners of lots 44 and 176, for orders seeking -

1.	A declaration that the EGM of the body corporate held on 24 October 2002 was adjourned after the passing of motion 3 to the date of the next general meeting.
2.	A declaration that until the meeting is reconvened the motions numbered 4 through to 29 on the Agenda for the 24 October EGM have not been passed.
3.	The secretary be directed to forward nomination forms to all owners to elect a person to the position of chairperson of the body corporate,

is dismissed.

I further order that the Extraordinary General Meeting of the body corporate of Village Square held on Thursday 24 October 2002 was validly continued by those members and others who remained at the meeting after the determination of motion 3 on the agenda, and that motions 4 to 29 were validly considered and determined by the meeting.

I further declare that motions 9 (headed Financial Arrangements – Levies and Penalties), 10 (headed New Service Contract – Ms J Boehnert) and 11 (headed Service Contract – Village Square Securities Pty Ltd) were validly carried at the EGM.




I further order that resolutions 10 and 11 as carried at the EGM, and motion 16 which was "withdrawn" (headed Authorised On-Site Letting Agent) shall not be implemented or otherwise acted upon until a final order to application 0071 of 2003 is made, or that application is withdrawn.

STATEMENT OF ADJUDICATOR’S REASONS FOR DECISION - REF 0668-2002

"Village Square" CTS 24715

Application and interim order

The applicants, Jennifer Beth Frank, the owner of lots 65, 245 and 246 and William Fleetwood and Virginia Margaret Fleetwood, the owners of lots 44 and 176, has sought the following order of an adjudicator under the Body Corporate and Community Management Act 1997 (the Act), quote -

1.	A declaration that the EGM of the body corporate held on 24 October 2002 was adjourned after the passing of motion 3 to the date of the next general meeting.
2.	A declaration that until the meeting is reconvened the motions numbered 4 through to 29 on the Agenda for the 24 October EGM have not been passed.
3.	The secretary be directed to forward nomination forms to all owners to elect a person to the position of chairperson of the body corporate.

The applicants also sought an interim order, and on 2 December 2002, the following interim order was made, quote -

RA MeekI hereby order that the application by Jennifer Beth Frank, the owner of lots 65, 245 and 246 and William Fleetwood and Virginia Margaret Fleetwood, the owners of lots 44 and 176, for interim orders that

1. A declaration that the EGM of the body corporate held on 24 October 2002 was adjourned after the passing of motion 3 to the date of the next general meeting.

2. A declaration that until the meeting is reconvened the motions numbered 4 through to 29 on the Agenda for the 24 October EGM have not been passed.

3. The secretary be directed to forward nomination forms to all owners to elect a person to the position of chairperson of the body corporate

is dismissed.

I further order that -

•	the body corporate shall not implement or otherwise act upon any of the resolutions purportedly carried at the EGM of the body corporate held on 24 October, 2002 (the meeting) until a final order to this application is made, this application is withdrawn, or this order is of no effect through operation of law;
•	that until a final determination of this application is made, the members of the committee who were members up to the time of the meeting (excepting the position of Brian Otto as Chairperson whose position was vacated pursuant to motion 3) shall continue as members of the committee in their former committee capacity;
•	the secretary shall not destroy or otherwise interfere with any of the materials held by her which relate to the meeting, including voting papers and the like.

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 reasons for my determination of the requested interim order, I concluded –

I do intend to make what I consider to be a genuine interim, or injunctive orders, to preserve the status quo until a final determination of this application can be made. I propose to order that –

•	The body corporate not implement or otherwise act upon any of the resolutions purportedly carried at the EGM of the body corporate held on 24 October, 2002 (the meeting) until a final order to this application is made, this application is withdrawn, or this order is of no effect through operation of law. Practically, this requires that the body corporate not implement or proceed with any matter the subject of resolutions 4 to 29 inclusive during the intervening period. If the body corporate has already purported to sign agreements based on the authority of the purported resolutions, then I consider that the body corporate should only implement those agreements to the extent that the body corporate is legally bound to do so;
•	That until a final determination of this application is made, the members of the committee who were members up to the time of the meeting (excepting the position of Brian Otto as Chairperson whose position was vacated pursuant to motion 3) shall continue as members of the committee in their former committee capacity. This order however does not prevent any member of the committee from resigning their position if they elect to do so. I strongly suggest to the committee that it seek to avoid considering issues of significant contention or dispute involving the body corporate during this period. However this is not an order, and the committee is at liberty to determine matters properly before it;
•	That the secretary shall not destroy or otherwise interfere with any of the materials held by her which relate to the meeting, including voting papers and the like. This physical evidence may become very relevant to the subsequent investigation of this application.

To indicate my preliminary view of this dispute, I consider that the validity of the meeting is in issue on three bases, namely –

•	The effect of the vacation of the office of the chairperson in consequence of motion 3 being carried; and
•	The effect of the alleged loss of order at the meeting following the carrying of motion 3;
•	Depending on the outcome of above two issues, whether the outcome of the meeting might be "re-constructed" from a combination of purported minutes and voting records and other information in the possession of the secretary.

Jurisdiction

I am satisfied that this is an application which I have jurisdiction to consider and determine under section 182 of the Act; namely an application by an owner or owners against the body corporate regarding a "dispute" in connect with a meeting of the body corporate held on 24 October 2002.

Teleconferences and AGM

As part of my investigation of this application, and application 0704 of 2002, I have now had two teleconferences with parties I consider relevant to the determination of this application. The first teleconference was held immediately prior to the AGM of the body corporate which was held on Tuesday 14 January 2003. The parties to that teleconference were Mr Vincent Vine in his personal capacity (Vine) and Mr Brian Otto (Otto) who was the authorised representative of both the applicants to this application, and of Mr Carrigg, the applicant in application 0704 of 2002.

The reason for that teleconference was to respond to a letter from Vine regarding the content of motions at the AGM, given the dispute which had arising regarding the EGM (in particular, whether certain motions which were considered at the EGM could be re-submitted to the AGM) and further, whether the election of the committee should proceed at the AGM. My answer to both questions was in the affirmative. Namely that motions the subject of the EGM could be re-submitted to the AGM, and that the AGM should elect a committee for the body corporate which each body corporate is required to do at the conclusion of each AGM.

My reasons for concluding as I outlined above were that there was nothing in the dispute regarding the previous EGM that should delay or inhibit the body corporate from considering motions which were lawfully before it, or from electing a committee as it was statutorily required to do. In particular, I sought to allow this body corporate to proceed and to continue to operate to the greatest extent possible, notwithstanding the continuation of the previous dispute.

I noted in the first teleconference that the re-submission of motions to the AGM, and the election of the committee, may resolve to some extent the existing dispute, though the extent to which this would occur, if at all, was impossible to know or predict. As such, it was a case of letting the cards fall where they might, so to speak, and then considering what issues, if any remained to be resolved. This in my view is precisely what occurred. The AGM of the body corporate was held on 14 January 2003, a committee was elected, and many of the motions the subject of dispute in the earlier EGM were determined one way or another.

Following the close of submissions, I received correspondence from Otto, attaching a copy of the draft minutes of the AGM. In essence, that correspondence indicated that in consequence of the AGM being held, the validity of 4 motions only remained in issue. Following the close of submissions, and the receipt of the Otto correspondence, I determined to convene a further teleconference, this time between Vine and Otto, and as well, the elected secretary, Clare Cauchi, who requested the participation in the teleconference of Gavin Frederick, a member of her office, for the reason of his involvement in the preparation of the EGM notice.

Otto’s correspondence also raised the question of the legality of Vine having withdrawn three motions originally considered at the EGM, and re-submitted to the AGM, from the agenda of the AGM. This matter is now the subject of a further application made by Village Square Securities Pty Ltd to this office which is currently in submission phase. Given this further application, it is not appropriate that I comment on the validity or otherwise of the withdrawal of motions by Vine from the AGM, except to consider the extent to which any determination I might make in the context of this application might impact on the implementation of the motions in question, in the event that the motions are determined to have been validly carried at the EGM.

In consequence of the second teleconference which I conducted on Tuesday 4 February 2003, I consider it settled between the parties that the issue in dispute to be resolved in the current application, is the question of the validity of the EGM continuing after the consideration of motion 3, and in the event that it is determined that the meeting was validly continued, then the validity of 4 motions which were carried at the meeting, and which were not resubmitted to the AGM. Those motions were –

1. Motion 9 headed Financial Arrangements – Levies and Penalties;

2. Motion 10 headed New Service Contract – Ms J Boehnert;

3. Motion 11 headed Service Contract – Village Square Realty Pty Ltd;

4. Motion 16 headed Authorised On-Site Letting Agent.

One further issue was raised in the second teleconference; namely what minutes the body corporate should adopt for the EGM in the event that the meeting is determined to have been validly continued. This was in issue given the circumstances occurring at the meeting after the determination of the third motion, and the fact that the then secretary left the meeting at this point. One of the parties to the teleconference raised how the minutes should be re-constructed, or determined. I initially indicated that I considered that in the event of it being determined that the meeting was validly continued, the minutes should be "re-constructed" by the current secretary from records available. At this point, Vine indicated that following the disruption to the meeting, a minute-taker was appointed ("Mrs Maselli") who proceeded to take minutes of the continued meeting.

I indicated in the teleconference, and continue to be of the view, that in the event of the continued meeting being determined to be valid, that the minutes of Mrs Maselli, who was actually present at the meeting, should be preferred to a set of minutes which might be re-constructed by the current secretary. I consider that there should be one qualification to this; namely that the current secretary should update the minutes produced by Mrs Maselli by the inclusion of voting papers, which the then secretary removed from the meeting at the conclusion of motion 3. I indicated in the teleconference that votes by voting paper should be included in the count, as I considered that the vote had in fact been cast – the voting paper was evidence of the intention of the owner to vote in a particular way. If the meeting is determined to have validly continued, then votes by voting paper should be included in the count on each motion for the sake of completeness of the record.

The validity of the "continuation" of the EGM

I do not propose to restate the circumstances occurring at the meeting in any detail. Suffice to say I have been provided with several versions in consequence of the submission process. In reality, the essential facts are not really in dispute.

The meeting proceeded until motion three, that the position of the chairperson Otto be declared vacant, was carried. Otto vacated the chair, and before motion 4 was put to the meeting, a Mr D Scott advised the meeting that in accordance with Horsley’s Meeting Procedure Law and Practice 4^th Edition by AD Lang:

It is essential that a new chair be appointed by the same resolution which removes the incumbent. If not, on the resolution of removal being passed, the meeting will have no chair, and accordingly will lapse.

Following this point being made, the meeting dissolved to a disputed level of chaos (depending on which version of events is being considered), and a number of owners, and certain committee members, notably the secretary, and the professional body corporate manager then proceeded to leave the meeting, taking with them various records relating to voting at the meeting. Those who left the meeting advocate that the meeting had ended, and could not be continued, on the basis of the quoted passage from Horsley’s; namely that the motion which removed the chair, did not appoint a replacement chair, and that in consequence of this the meeting lapsed.

Those who remained considered that the meeting should continue under section 35 of the Commercial Module. This section provides –

35 Chairing general meetings [SM, s 46]
(1) The chairperson must chair all general meetings at which the chairperson is present.
(2) A person elected (with the person’s consent) by the persons present and having the right to vote at a general meeting must chair the meeting if--
(a) the chairperson is absent from the meeting; or
(b) a chairperson has not been chosen; or
(c) there is a vacancy in the office of chairperson. ...

On the basis of this section, those who remained at the meeting elected a new chairperson, and a "minute taker" and the minutes prepared by her record the "continuation of meeting". The meeting then proceeded to determine motions 4 to 29 as per the agenda.

At the outset, I make the observation that it appears to me that it was generally known beforehand that the objection raised at the meeting to its continuation, on the basis of the quoted passage from Horsley’s, would occur. There are numerous pieces of evidence suggesting this including that Mr Scott read his passage on que so to speak; that a number of owners choose to leave the meeting, as if seeking to bring about an end to the meeting; that apparently, the information section of this office had been contacted twice on the question of how motions dealing with the vacancy and appointment to the committee should be dealt with; the immediate reliance on section 35 by those seeking to maintain that the meeting should continue, to nominate a few examples. I am prepared to conclude that what occurred at this meeting was pre-meditated, and perhaps reflected deeper divisions and conflicts within the body corporate.

The extent to which this observation is relevant is that if it is determined that the meeting should have been, and was validly continued, then I do not consider that it would be reasonable to then find that the meeting failed in any event due to "the effect of the alleged loss of order at the meeting following the carrying of motion 3", which I referred to in my interim order. In my view, if it is determined that the meeting was validly continued, then those who sought to have the meeting conclude after the determination of motion 3 should not be victorious in the current dispute, not for the reason that it legally came to an end after the consideration of that motion, but rather that the meeting came to an end in consequence of the alleged loss of order. This is akin to the equitable doctrine that those who seek a particular remedy should do so "with clean hands". I therefore conclude that my determination of the validity or otherwise of the continuation of the meeting will be independent of any consideration of the question of the meeting having been concluded through any loss of order.

In determining the question of whether the meeting was validly continued, there are two sources for guidance; firstly the statute, and secondly, in the absence of specific statutory provision, the common law. The statement from Horsley’s is a statement of the common law. Moreover, it is a statement provided in isolation. A second text is available to me, namely Joske’s Law and Procedure at Meetings in Australia (9^th edition, Eilis S Magner). Chapter 6 is headed "The Chair". At page 44, under the heading "Removing a person from the chair" it is stated –

In the absence of express provision to the contrary, a chairperson has no definite term of office and may be removed at any time. However, a motion of no confidence in the chair is not the proper motion for this purpose and should not be accepted from the chair or put to the meeting. When it is the intention to elect a new chairperson, the motion should be that another person (whose name is stated) take the chair (Wishart v. Henneberry (1962 3 FLR 171 at 173)), not that the chairperson leave the chair. A motion that the presiding officer should leave the chair standing alone has the effect of adjourning the meeting.

On its face, this statement of the common law appears to be consistent with that quoted from Horsley.

The question arises whether such an interpretation is consistent with the provisions of the statute, in this case the relevant provisions of the Commercial Module. In this context, it should be noted that the legislation generally sets out a prescriptive regime for the convening and holding of meetings of the body corporate. It is my view, resort should only be had to the common law position where the matter in dispute is specifically not dealt with in the legislation (for example, the adjournment of a meeting), and even then, where the common law position is not inconsistent or in conflict with the intent of the legislation generally.

Those seeking to argue that the meeting was validly continued rely on section 35 of the Commercial Module. Subsection (1) provides that the chairperson must chair all general meetings at which the chairperson is present. Subsection (2) then provides in three circumstances which are specified (absence / no previous person chosen / vacancy in the office) then a person who is elected by the persons present must chair the meeting.

It is important to note in my view that this section at least contemplates that circumstances might arise at a body corporate meeting when no chair exists. In this circumstance, it contemplates the members present acting without the direction of a chair so as to elect a person to the chair. At its most basis, it contemplates the continuation of the meeting notwithstanding that no chair exists. This seems to me contrary to the common law position, which appears to conclude that the loss of the chair for whatever reason is fatal to the continuation of the meeting.

Those seeking to argue that the meeting continued after the determination of motion 3, rely specifically on subsection (2)(c) "there is a vacancy in the office of chairperson". In the interpretation of this provision, I consider that section 14 is relevant. That section relevantly provides –

14 Term of office [SM, s 25]
(1) The term of office of a member of the committee continues until another person is chosen for the position.
(2) However, a member’s position becomes vacant if the member--
(a) dies; or
(b) becomes ineligible to hold the position; or
(c) resigns by written notice given to the chairperson or secretary; or
(d) is absent from 2 consecutive meetings of the committee without the committee’s leave; or
(e) is convicted (whether or not a conviction is recorded) of an indictable offence; or
(f) is removed from office by ordinary resolution of the body corporate.
...

This section acknowledges that a member of the committee can be removed from office by ordinary resolution of the body corporate (section 14(2)(f)). Moreover, it provides that a member’s position becomes vacant if the member is removed from office by ordinary resolution. In my view, the term "vacant" is used in the same sense as the term "vacancy" in section 35. To this extent, I conclude that sections 35 and 14 are capable of operating, and are intended to operate, in unison.

I conclude that the provisions of the legislation to which I have referred apply to cover the situation which arose within this body corporate, and that it is not necessary to refer to the common law position. Moreover, I find that the common law position on this question is inconsistent with the intent of the legislation, and that the legislative provisions must operative to the exclusion of the common law.

I am entirely comfortable with this conclusion, and that the legislation and the common law are in conflict. A wider reading of the provisions of Joske under the relevant heading would appear to substantiate the divergence between the common law position, and that which was intended to apply under the relevant legislation. For example, Joske states –

It is entirely inappropriate to attempt to achieve the end of removing an officer from the chair by moving a motion of no confidence. ... The officer in the chair of a meeting does not serve only which he or she retains the confidence of the meeting. This officer serves for the term for which he or she has been elected and can only be removed for breach of duty.

This is not the case under the legislation. There need be no breach of duty established in order to move a motion that the position of a committee member is vacated. Section 14 specifically contemplates the removal from office of any member of the committee, including a chairperson, on the basis of a motion of no confidence having been moved. Whilst this is not usually stated in motions as the basis for removal of the member of the committee, it is almost always the basis for such a motion being proposed.

Moreover, there is a very practical reason why the common law position is not sustainable in a body corporate context. Unlike many other meeting situations, the statutory requirements for body corporate meetings require that the full text of all motions be included on the agenda of each meeting. Moreover, the ability to amend a motion once it has been included on the agenda is very limited. Consequently there is little if any room for discussion or negotiation on the content of a motion once it has been included on the agenda. The options for members in voting in respect of a motion are essentially to vote "yes", "no" or to abstain.

The motion as suggested by Horsley and Joske would require that the motion read something to the effect –

That the position of the current chairperson ... is vacated, and that ... is elected to the position of chairperson.

The clear difficulty created by this requirement is that it includes in the same motion, two very distinct proposals to be voted on. However, the options for voting remain as before (yes/no/abstain). There is no way of expressing support for one proposal, and opposition to the other. In my view, this position is not sustainable in a body corporate context, and the provisions of the legislation allow for a different interpretation of the requirements.

I conclude that the meeting was validly continued, and that motions 4 to 29 were capable of being considered and determined by the meeting. I note from the minutes prepared by Mrs Maselli that motions 9, 10 and 11 were all carried by votes of 104 "yes", nil against, with 1 abstention. I am further satisfied that the vote for motions 9, 10 and 11 could not have been reversed even if the "86 votes unknown" were assumed to have voted "no" to each of these motions as this would have still resulted in a majority vote in favour of each of the three motions. I am therefore prepared to declare these motions to have been validly carried at the EGM meeting held on 24 October 2002.
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I note that motion 16 was "withdrawn" by the chairperson for a technical reason and was not considered by the meeting. The reason given was a failure to attach the proposed appointment "contract". Whilst the engagement must be in writing, the necessity to include the form of contract in the motion proposing it is not so clear on my reading of the Commercial Module. This however does not mean that it is not in the interests of owners that it be done, and I conclude that the withdrawal of the motion in these circumstances was prudent.

However, I am somewhat confused by this "withdrawal", since whilst the minutes prepared by Mrs Maselli clearly state this to be so, the parties to the second teleconference were in agreement that motion 16 had in fact been determined. This confusion is reflected in the two "summaries" provided to me by Otto. In the first, he states that motion 16 was "withdrawn" at the EGM, however in the second he states that the motion was carried by a vote of 124 to 51. I am not prepared to convene a further teleconference to clarify this, and consider that I am entitled to rely on the minutes which state that the motion was withdrawn at the meeting. Further, I was not asked in this application to consider the validity or otherwise of that purported withdrawal, and do not propose to do so. I consider that I will have an opportunity to review this aspect in connection with the further application which has been made regarding the "withdrawal" of motions 17, 18 and 28 on the agenda of the AGM.

The terms of this order do raise a further issue. I have declared motions 9, 10 and 11 to be valid. Presumably they are now capable of being implemented, and the terms of my interim order will no longer apply to prevent this. However, in consequence of application 0071 of 2003, I consider that the validity two of these resolutions (10 and 11) and the further motion 16, is again in issue. The essence of the argument in that application as I understand it is that the equivalent motions were re-submitted and included on the agenda of the AGM, but that the motions were withdrawn by Vine prior to them being determined. The implication being that the motions, if considered, would not have been carried.

Given these circumstances, in order to preserve the current status quo until a final order is made in respect of application 0071 of 2003, I intend to further order that resolutions 10 and 11 as carried at the EGM, and motion 16 which was "withdrawn" (refer comments above) shall not be implemented or otherwise acted upon until a final order to application 0071 of 2003 is made, or that application is withdrawn.