Narrowneck Court [2003] QBCCMCmr 404 (4 March 2003)

Last Updated: 10 September 2007

DJ ReardonREFERENCE: 0127-2003

INTERIM ORDER OF AN ADJUDICATOR

MADE UNDER PART 10 OF CHAPTER 6

BODY CORPORATE AND COMMUNITY MANAGEMENT ACT 1997

Number of Scheme:	12625
Name of Scheme:	Narrowneck Court
Address of Scheme:	204 Ferny Avenue, SURFERS PARADISE QLD 4217

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

Jacqueline Lowman, a service contractor and letting agent for the Body Corporate, and a Co-owner of Lot 4


DJ ReardonI hereby order that the application for interim and final orders that motion 5, as stated on the agenda for an extraordinary general meeting of the Body Corporate scheduled for 8 March 2003, "be ruled out of order", is dismissed.1n
STATEMENT OF ADJUDICATOR’S REASONS FOR DECISION - REF 0127-2003

"Narrowneck Court" CTS 12625

1.	Orders sought

The Applicant, a service contractor and letting agent for the "Narrowneck" Body Corporate, and the Co-owner of Lot 4, has sought interim and final orders of an adjudicator under the Body Corporate and Community Management Act 1997 ("the Act") declaring motion 5, as set out on the agenda for an extraordinary general meeting of the Body Corporate scheduled for 8 March 2003, "out of order".

In accordance with section 225(1) of the Act, an adjudicator may make an interim order if satisfied, on reasonable grounds, that an interim order is necessary because of the nature or urgency of the circumstances to which the application relates. An adjudicator’s order may contain ancillary or consequential provisions the adjudicator considers necessary or appropriate (section 230(1)).

The "Narrowneck Court" community titles scheme consists of 44 lots and common property. The community management statement for "Narrowneck Court" indicates that the Body Corporate and Community Management (Accommodation Module) Regulation 1997 ("the Accommodation Module") applies to the scheme.

2.	Application details

This dispute resolution application was made on 26 February 2003. In accordance with section 197 of the Act, the Commissioner referred the application to me for consideration for an interim order, notwithstanding that notice of the application has not been given to the Body Corporate (section 197(3)).

Also on 26 February 2003, a staff member of this Office contacted the Applicant on my behalf, and requested a copy of the full notice of the extraordinary general meeting of the Body Corporate scheduled for 8 March 2003, and a copy of the management and letting agreement between the Applicant and the Body Corporate. The Applicant provided the requested material be facsimile on 26 February 2003.

3.	Interim orders

In any consideration of an application that seeks the making of an interim order, it is necessary to determine whether, because of the nature or urgency of the circumstances relating to the application, an interim order is warranted.

The examples included in the Act under section 225(1) are suggestive of the usual circumstances where an interim order might be made. Both examples are in the nature of injunctive relief. Whilst the range of matters that might be the subject of an interim order is not capable of definition, the applicant does need to establish that the circumstances of the application warrant the making of an interim order.

An interim order will not be made, or will be refused, in circumstances where the only urgency relates to the applicant’s desire to resolve or expedite the matters in dispute, or where the nature of the circumstances are such that the matter is not capable of being dealt with in the context of an interim order.
Given that an interim order may be made ex parte (that is, without reference to, or submission from, the respondent named in the matter), then as a guide, where the circumstances or matters in dispute include matters or allegations not capable of expeditious, and objective consideration, then the request for an interim order may be refused. It is a matter for an adjudicator to determine in respect of each application.

4.	Matters in dispute

This application primarily concerns the validity of motion 5 as proposed by the Committee for the consideration of the Body Corporate at an extraordinary general meeting to be held on 8 March 2003. The voting paper accompanying the relevant notice of meeting describes motion 5 in the following terms:

"That the Body Corporate not extend the term of the current management agreement past the expiry date of the 30^th November 2007."

While the orders sought in this application are limited to an assessment of the validity of motion 5, it may be of benefit for me to briefly outline the broader circumstances of the application.

After reviewing the material before me, I understand that the Applicant and Mr Martin Lowman, became service contractors and letting agents for the Body Corporate by virtue of a transfer of an existing management and letting agreement. In this regard, the Applicant has provided a copy of a Deed of Assignment and Variation dated 1 July 1998, purporting to assign an agreement dated 2 November 1992, between "The Proprietors "Narrowneck Court" Building Unit Plan No 2513 and Lindsay Russel Gibb, Karen Ruby Gibb, Roger John Wade and Lynda Ann Wade. I understand that at this time, the management and letting agreement is due to expire on 30 November 2007.

From the supporting grounds to the application, I understand that the current service contractors and letting agents are endeavouring to transfer their rights and obligations under the management and letting agreement to another person. I also understand that a potential transferee has been identified. However, if I understand the material before me correctly, a difficulty has arisen concerning the remaining term of the agreement, which is now less than 5 years. According to the Applicant, potential transferees will have difficulty obtaining finance to invest in the rights under an agreement of this length. As such, I understand that the Applicant is requesting the Body Corporate to enter into a fresh agreement with the proposed transferee, and to consent to the transfer of the remaining term of the current agreement to the proposed transferee.

The agenda for the extraordinary general meeting to be held on 8 March 2003 contains five motions proposed for consideration by the Body Corporate. Motion 1 is a largely procedural motion seeking the Body Corporate’s confirmation that the minutes of the annual general meeting held on 28 September 2002 are a true and correct record of the meeting.

Motions 2, 3 and 4 have been proposed by the Applicant and Mr Lowman, and are described on the voting paper as relating to the "sale of management rights". Motion 2 proposes that the Body Corporate enter into a new service contract and letting authorisation with the proposed transferee. Motion 3 proposes that the Body Corporate sign a deed of consent to security to record the interest of the National Australia Bank in the engagement and authorisation described in motion 2. Motion 4 proposes that the Body Corporate consent to a new community management statement identifying Lot 2, rather than Lot 4, as "the managers lot".

I have described motion 5, the subject of this application, above.

5.	Determination

As stated previously, the Applicant has sought interim and final orders that motion 5 be ruled "out of order". Section 45 of the Accommodation Module requires a person chairing a general meeting of a body corporate to rule particular motions out of order. Specifically, a person chairing a general meeting must rule a motion out of order, if the motion (if carried), would conflict with the Act, regulation module, or the by-laws, or would be unlawful or unenforceable for another reason. In addition, a person chairing a general meeting must rule a motion (with the exception of procedural motions) out of order if the substance of the motion was not included in the agenda for the meeting.

In my view, ruling motions "out of order" is principally a matter for the person chairing a general meeting of the body corporate to determine. Strictly speaking, I do not consider that it is an adjudicator’s role to rule motions "out of order". However, I also consider that it is clear that the Act does contemplate adjudicators determining the validity of motions and resolutions of bodies corporate. In my view, the criteria set out in section 45 of the Accommodation Module in describing motions a person chairing a meeting must declare "out of order", provide good guidance as to some of the circumstances in which an adjudicator may determine that a motion or resolution, is invalid and of no effect.

In the supporting grounds to the application, the Applicant states that motion 5 is invalid "because it places a restriction on owner’s rights to enter into a contract at any time in the future". In my view, motion 5 does not purport to place such a wide restriction on owners. The terms of motion 5 clearly relate to extensions of the current management and letting agreement, with no reference being made to the Body Corporate entering into other engagements or agreements in the future.

Further, even if motion 5 is carried, I do not consider that the resolution would necessarily prevent the Body Corporate reconsidering the question of extending the current agreement in the future. It seems to me that section 56 of the Accommodation Module clearly contemplates bodies corporate amending or revoking previous resolutions.

For these reasons, I do not consider that motion 5, if carried, would unduly restrict the Body Corporate making decisions about the current management and letting agreement, or other contracts in the future. In addition, I do not consider that the Applicant has demonstrated that motion 5, if carried, would be unlawful or otherwise unenforceable, or would be unreasonable for some other reason.

6.	Conclusion

For the reasons outlined above, I do not consider that an interim order preventing the Body Corporate from considering motion 5 at the extraordinary general meeting of 8 March 2003 is warranted, and I intend to dismiss the application. As the Applicant has sought the same relief as a final order, it seems to me that the matter is now also finally determined. Therefore, it is not intended to seek submissions in relation to this application, or to make a further order.