Paradise Sands [2003] QBCCMCmr 39 (31 July 2003)

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

• Helen Margaret Gleeson, the owner of lot 12;
• Coreena Adele Byrnes, the co-owner of lot 4;
• John Trevor Ray, the co-owner of lot 19;
• Maxwell James Shelley and Bonita Ann Shelley, the owners of lot 15;
• Patricia Conolly Hague-Smith, the co-owner of lot 1;
• George James Fitzwalter, the co-owner of lot 35;
• Suzanne Brooks, the co-owner of lot 7;
• Wayne Tony Usher, the owner of lot 36.

I hereby order that the application by the above named parties for an order to have the motion invalidated appointing BC Administration as BC manager for 3 years, is approved.

I further order that the resolution purportedly carried pursuant to motion 7 at the 2002 AGM which appointed Body Corporate Administration as body corproate managers for a term of 3 years, is invalid and of no effect.

I further order that until the 2003 AGM is held in December, Body Corporate Administrators shall perform only routine administrative matters on behalf of the body corporate, and in particular, shall not have any involvement in –

• Committee meetings (at which the appointment of a body corporate might be considered);
• Preparation of the notice of meeting and agenda for the forthcoming AGM;
• The AGM itself (at which motions regarding the appointment of a body corporate manager will presumably be considered).

STATEMENT OF ADJUDICATOR’S REASONS FOR DECISION - REF 0042-2003

"Paradise Sands" CTS 14989

The applicants (listed above) have sought the following order of any Adjudicator under the Body Corporate and Community Management Act 1997 (the Act), quote –

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

(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)).

The applicants state that –

Motion 7, headed Appointment of Body Corporate Manager (Ordinary Resolution) provided that Body Corporate Administration (BCA) be appointed body corporate manager for 3 years commencing 1 Dec. 2002 at a fee of $5402.00 pa plus GST. There was no alternative motion included in the notice. The 2002 AGM was held on 14 December 2002. The minutes record that motion 7 was carried by a vote of 19 "yes" with 8 "no" votes.

The committee has made a submission in response to the application. The submission provides that "the committee have requested that BCA amend the body corporate administration agreement to a period of one year and BCA have agreed to this action".

The committee submission then goes on to state that –

The applicants are correct in their submission that the appointment of the body corporate manager at the 2002 AGM did not comply with the legislation. Section 104 of the Standard Module provides that –

104 Quotes for major spending
(1) This section applies if--
(a) a motion to be moved at a general meeting of the body corporate proposes the carrying out of work or the acquisition of personal property or services, including the engagement of a body
corporate manager or service contractor, but not including the engagement of a service contractor who also is, or is to be, a letting agent; and
(b) the cost of carrying the proposal into effect is more than the relevant limit for major spending for the scheme.
(2) The lot owners must be given copies of at least 2 quotations for carrying out the work or supplying the personal property or services.
(3) If the motion is proposed by the committee, the committee must obtain the quotations.
(4) If the motion is not proposed by the committee, the person proposing the motion must obtain the quotations and give them to the secretary.
(5) Copies of the quotations or, if voluminous, summaries of the quotations and advice about where the complete documents may be inspected, must accompany the notice of the meeting at which the motion is to be considered.
(6) If, for exceptional reasons, it is not practicable to obtain 2 quotations, a single quotation must be obtained and must accompany the notice of meeting.
Example--
If goods to be acquired by the body corporate are obtainable from only 1 source, a quotation for supplying the goods must be obtained from the source and circulated with the notice of meeting. The fact that goods with the necessary characteristics are only obtainable from a single source would be an exceptional reason for not obtaining 2 quotations for the supply of the goods.
(7) Each quotation obtained under this section must be retained as an attachment to the minutes of the meeting at which the quotation is considered.

The "relevant limit for major spending" is $200 per lot, or for this body corporate $9000. At $5402 pa, at least in the first year, the minimum amount over three years will be in excess of $16,000. Section 104 operates and two alternative proposals / quotes should have been put to the meeting. This wasn’t done, and the motion is therefore invalid. The applicants are entitled to the order sought. I am not persuaded that the contract can simply be read down to operate as a one year contract, as submitted by the committee.

The only question is whether given that an AGM is to be held in December, whether it is practical and in the interests of the body corporate that a meeting be held ahead of this meeting, to determine motions regarding the appointment of a body corporate manager. It is clear from submissions that other owners, in addition to the applicants, are dissatisfied with the current level of service being provided by the manager, BCA. However, to convene a committee meeting, obtain quotes for body corporate management services, hold a further committee meeting to convene an EGM, then give notice (21 days) and hold the meeting, it will consume much, if not most, of the time between now and when the AGM is to be held in December.

Also, the potential disruption to the body corporate must be considered. In particular, if the current invalidly appointed body corporate manager is to be terminated, then there may be considerable disruption to the extent of administrative matters (eg. payment of contributions, bank accounts, computer records etc).

In all the circumstances, I conclude that the consideration of motions for the appointment of a body corporate manager should be delayed until the AGM in December. However, I consider that BCA should not gain any advantage from this and to this end, I intend to order that BCA shall perform only administrative services for the body corporate for which they are contracted. In particular, I consider that BCA should not have any involvement in –

It is invariably the case in my experience that an existing body corporate manager has the inside running when the renewal of the body corporate management appointment comes up. The existing manager often prepares the agenda, and sometimes is even responsible for obtaining quotes. Clearly there is a conflict of interest here, and this is what I am seeking to avoid. So I reiterate, BCA should only provide administrative support to the body corporate (eg. collect contributions, pay bills, undertake committee instructions, give advice on legislative matters). No representative of BCA should attend any committee meeting held before the AGM in December, or the AGM itself, and should not involve themselves in the obtaining of quotes or the preparation of the forthcoming AGM notice or agenda of meeting. This order will place a greater responsibility on the members of the current committee, excluding any representative of BCA. However, this is necessary to ensure that the appointment of a manager at the forthcoming AGM is undertaken on a fair playing field.

There are additional allegations in the grounds regarding the declaration of the vote at the 2002 AGM, in particular that an accurate count of "no" votes on motion 7 was not taken, and that counting on motions generally was not in accordance with the legislation. I do not propose to make any finding on this aspect, but rather to set out the provisions of section 56 of the standard module headed Declaration of voting results on motions. Perhaps this information is timely in view of the forthcoming AGM.

56 Declaration of voting results on motions
(1) The person chairing a general meeting must declare the result of voting on motions at the meeting.
(2) When declaring the result of voting, the person chairing the meeting must state--
(a) the number of votes cast for the motion; and
(b) the number of votes cast against the motion; and
(c) the number of abstentions from voting on the motion.
(3) The numbers mentioned in subsection (2) must be recorded in the minutes of the general meeting or in a voting tally-sheet kept with the minutes.
(4) Records kept under subsection (3) must include, for each motion (other than a motion decided by secret ballot)--

(a) a list of the votes, identified by lot number, rejected from the count; and
(b) for each vote rejected--the reason for the rejection; and
(c) for each lot for which a vote was cast, or for which there was an abstention from voting--the number of the lot, and whether there was a vote for the motion, a vote against the motion, or an
abstention from voting on the motion; and
(d) the total number of--
(i) votes counted for the motion; and
(ii) votes counted against the motion; and
(iii) abstentions from voting on the motion.

Number of Scheme:	14989
Name of Scheme:	Paradise Sands
Address of Scheme:	42 Old Burleigh Road, SURFERS PARADISE QLD 4217

Queensland Body Corporate and Community Management Commissioner - Adjudicators Orders

Paradise Sands [2003] QBCCMCmr 39 (31 July 2003)