Sandown [2003] QBCCMCmr 43 (1 August 2003)

TAKE NOTICE that pursuant to an application made under the abovementioned Act by Peter John Chayter, the co-owner of lot 10

I hereby order that the application for an interim order that the extraordinary general meeting to be held on August 2 2003 be put on hold until the "outcomes sought" in the final orders are either dismissed or upheld, is dismissed.

I further order that in determining motions 4 and 7 relating to the administration fund budget and levies the person chairing the meeting shall call for a vote on motion 7 immediately after the vote has been taken on motion 4, such that these motions shall be considered as motions in the alternative.

I further order that the person chairing the meeting shall not declare the result of the vote on motion 4 until after the votes have been cast in relation to motion 7, and at that time, if each motion has had more "Yes" votes cast than "No" votes, then the motion which will be declared as having been passed will be that motion for which the greater number of "Yes" votes have been cast.

I further order that in determining motions 5 and 8 relating to the sinking fund budget and levies the person chairing the meeting shall call for a vote on motion 8 immediately after the vote has been taken on motion 5, such that these motions shall be considered as motions in the alternative.

I further order that the person chairing the meeting shall not declare the result of the vote on motion 5 until after the votes have been cast in relation to motion 8, and at that time, if each motion has had more "Yes" votes cast than "No" votes, then the motion which will be declared as having been passed will be that motion for which the greater number of "Yes" votes have been cast.

I further order that the body corporate shall not consider motion 9 (relating to the waterproof roof deck) as that motion does not comply with the requirements of section 104 of the Body Corporate and Community Management (Standard Module) Regulation 1997 in relation to major spending.

I further order that a copy of this order and the accompanying reasons shall be provided to all owners, either personally at the scheduled meeting, or by post within 14 days of the date of this order.

STATEMENT OF ADJUDICATOR’S REASONS FOR DECISION - REF 0492-2003

"Sandown" CTS 10524

The applicant, Peter John Chayter, has sought an interim order of an adjudicator under the Body Corporate and Community Management Act 1997 (the Act) as follows:

That the extraordinary general meeting to be held on August 2 2003 be put on hold until the "Outcomes Sought" in the final orders are either dismissed or upheld

The proposed extraordinary general meeting to be held on August 2 2003 be cancelled as motions 4 & 5 do not comply with what you said in your ordeer 0257-2002 in relation to the formulation of sinking fund budgets. That a new meeting be called to cover the election of a chairman and if owners are still unhappy with the budgets as presented by the committee that any new budgets formulated by owners be based on the requirements of the Act and the completed survey.

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)).

Section 279(1) of the Act allows an adjudicator to make an interim order if satisfied, on reasonable grounds, that an interim order is necessary because of the nature or urgency of the circumstances of the application.

The application was received on 22 July 2003, twelve days after the notice of meeting was issued. Only the body corporate manager and the body corporate committee were invited to respond to the application, given the short time frame available. Submissions were received from the chairperson, various owners and some members of the committee. It is apparent from the views expressed in the submissions that there is considerable conflict in this relatively small scheme. I do not propose to set out within this statement of reasons the detailed nature of the submissions. Suffice to say I have read all of the material before reaching my decision on this interim order.

In general, adjudicators are loathe to prevent general meetings from proceeding, particularly when an order to that effect would be made in such close proximity to the time of the scheduled meeting that owners may be personally inconvenienced and financially disadvantaged, as could undoubtedly be the case here. I am not aware where all of the owners in this scheme live, but it is feasible that travel costs could be thrown away if those owners who do not live on the Gold Coast had made arrangements to be present at the meeting, and it was cancelled at the last minute. In addition, by allowing the meeting to proceed, I can better ascertain owners’ views on the proposed motions. Clearly the issue of maintenance is of significant concern to owners. I shall also be able to undertake more detailed investigation before issuing my final order, at which time it will be open to me to overturn any of the motions which may have been carried at the meeting if the evidence supports such a course of action.

In relation to the motions to declare the chairperson’s position vacant, and to appoint another owner to fill that position until the next annual general meeting, section 25(2)(f) of the Body Corporate and Community Management (Standard Module) Regulation 1997 (Standard Module) provides that a committee member’s position becomes vacant if the member is removed from office by ordinary resolution of the body corporate. In such circumstances, it is also acceptable for the body corporate to appoint another eligible person to fill that position by ordinary resolution. If it transpires that owners vote to remove the present chairperson, but vote against the person proposed in motion 3, then the vacant position thereby created can be filled either by the committee appointing a person who is eligible for appointment, or by calling another general meeting (section 25(3) of the Standard Module).

I note that there have been 2 motions proposed in respect of each of the administration fund budget and levies and the sinking fund budget and levies. I am of the view that these motions should be considered as alternative motions, and I have ordered accordingly. This method of voting better reflects owners’ views, and removes the perception that the first motion listed has "priority", as traditionally the second motion is deemed out of order by the chairperson if the first motion is passed. This approach does not always represent the true position, as a majority of owners may in fact support both motions, but a greater majority supports one over the other. In the specific circumstances of this scheme at this time, that may not be so, but in my view the exercise should still be conducted.

The applicant did not take issue with motion 9, but I note that the cost of renewing the waterproof membrane exceeds the relevant limit for major spending for this scheme (which is calculated by multiplying the number of lots by $200). Accordingly, in accordance with section 104(2) of the Standard Module, owners must be given copies of at least two quotations for carrying out the work. The quotations must be incorporated in alternative motions to enable owners to make their decision. It is not sufficient for the committee to obtain two quotes, and then, having selected one, to place only that one before owners. Sometimes factors other than mere price need to be considered in determining who might be the most suitable contractor to carry out the work in question, and owners are entitled to have input where major spending is involved. I have therefore ordered that the body corporate shall not consider motion 9 as it fails to comply with the requirements of section 104(2).

This matter will now be investigated in accordance with the usual processes of this office. All owners will be given the opportunity to respond to the application, and a final order will be made in due course.

Number of Scheme:	10524
Name of Scheme:	Sandown
Address of Scheme:	4 Montana Road MERMAID BEACH QLD 4218

Queensland Body Corporate and Community Management Commissioner - Adjudicators Orders

Sandown [2003] QBCCMCmr 43 (1 August 2003)