Robert Henry Court [2003] QBCCMCmr 469 (15 April 2003)

Last Updated: 10 September 2007

DJ ReardonREFERENCE: 0073-2003

ORDER OF AN ADJUDICATOR

MADE UNDER PART 9 OF CHAPTER 6

BODY CORPORATE AND COMMUNITY MANAGEMENT ACT 1997

Number of Scheme:	29887
Name of Scheme:	Robert Henry Court
Address of Scheme:	62 Eton Street NUNDAH QLD 4012

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

Genevieve Kane, the Owner of Lot 2

I hereby order that the application for an order appointing an administrator to convene the first annual general meeting of the Body Corporate, and to carry out other functions required by the Body Corporate and Community Management Act 1997, is dismissed.
STATEMENT OF ADJUDICATOR’S REASONS FOR DECISION - REF 0073-2003

"Robert Henry Court" CTS 29887

1.	Order sought

The Applicant, the Owner of Lot 2, has sought the following orders of an adjudicator under the Body Corporate and Community Management Act 1997 ("the Act"):

"THAT Australasian Body Corporate Management (Qld.) Pty. Ltd. be appointed Administrator to call a general meeting of the Body Corporate for "Robert Henry Court" CTS 29887: such meeting to be known as the First Annual General Meeting.

THAT Australasian Body Corporate Management (Qld.) Pty. Ltd. be authorized to carry out such further actions as may be necessary to meet the requirements of the Body Corporate and Community Management Act 1997."

Section 276(1) of the Act allows adjudicators to make just and equitable orders to resolve disputes in community titles schemes. An order may require a person to act, or prohibit a person from acting, in a way stated in the order (section 276(2)).

Specifically, and without limiting the power of an adjudicator to make an order under section 276(1), an adjudicator may order a body corporate to call a general meeting of its members to deal with stated business, or to change the date of an annual general meeting. Additionally, the adjudicator may make an order appointing an administrator, and authorise the administrator to perform obligations of the body corporate, or a member of its committee, under the Act or the community management statement (Schedule 5).

An adjudicator’s order may contain ancillary or consequential provisions the adjudicator considers necessary or appropriate (section 284(1)).

The "Robert Henry Court" community titles scheme was originally created under a building format plan of subdivision recorded on 4 December 2001, and a community management statement recorded on 18 December 2001. The scheme consists of 5 lots and common property. The community management statement for "Robert Henry Court" indicates that the Body Corporate and Community Management (Small Schemes Module) Regulation 1997 ("the Small Schemes Module") applies to the scheme.

2.	Application and submissions

This application was made on 3 February 2003. On 25 February 2003, the Commissioner for Body Corporate and Community Management ("the Commissioner") invited the owners of lots included in the scheme to make a written submission about the application. The Owners of Lot 5 have made a written submission supporting the application.

On 2 April 2003, the Commissioner made an initial case management recommendation that the application should be the subject of departmental adjudication.

On 3 April 2003 a staff member of this Office contacted the Applicant at my request and requested further information in relation to the application. The Applicant provided the requested information in a facsimile received on 4 April 2003.

3.	Determination

In making this application, the Applicant has sought an order appointing an administrator to convene the first annual general meeting of the Body Corporate. Before turning to the specifics of the application, I wish to make some brief comments about the legislative requirement for original owners to convene first annual general meetings of bodies corporate.

For bodies corporate operating under the Small Schemes Module, section 38(1) of the regulations imposes an obligation on the original owner of the scheme to convene the first annual general meeting of the body corporate. The purpose of a body corporate’s first annual general meeting includes adopting and reviewing budgets, reviewing insurance policies and choosing the secretary and treasurer (see section 38(3) of the Small Schemes Module). The original owner is also required to give the body corporate certain documents and materials at the first annual general meeting (see section 39 of the Small Schemes Module)

In accordance with section 38(2) of the Small Schemes Module, this first annual general meeting must be held within 1 month after the first of the following to happen:

•	More than 50% of the lots included in the scheme are no longer in the ownership of the original owners, or
•	6 months elapse after the establishment of the scheme.

The "Robert Henry Court" community titles scheme was established upon the recording of the first community management statement for the scheme, that is, 18 December 2001 (see section 24(2) of the Act, previously section 26(2)). Therefore, it seems to me that the first annual general meeting of the "Robert Henry Court" Body Corporate should have been held no later than 18 July 2002 (depending on when the lots were sold).

In the supporting grounds to the application, the Applicant indicates that a first annual general meeting was not convened in accordance with the above provisions, however an annual general meeting was called for 20 December 2002, and adjourned until 8 January 2003. The Applicant has provided a copy of the minutes of this meeting. It is apparent from the minutes that the Body Corporate considered a number of matters at this meeting including insurance, budgets, the appointment of a body corporate manager, and choosing of committee members. I note that the Applicant was appointed as Body Corporate Secretary at the meeting.

Section 38(4) of the Small Schemes Module provides that "if the original owner does not call and hold the first annual general meeting as required by this section, the order of an adjudicator under the dispute resolution provisions may include an order appointing a person to call the first annual general meeting within a stated time."

It seems to me that while a meeting was convened, this meeting was not held in accordance with the time frames set down in the Small Schemes Module. However, I note that the Applicant has not specifically sought any orders concerning the validity of the 8 January 2003 meeting.

In my view, a meeting is "valid" until such time as an interested person successfully applies for an order declaring the meeting void on the basis of a significant breach of the legislation, or some other substantial irregularity. As the Applicant has not sought an order regarding the validity of the 8 January 2003 meeting, I do not intend to determine whether or not the meeting is valid or to disrupt the decisions made at the meeting. I also do not intend to appoint an administrator to convene the first annual general meeting, as it is apparent that a first general meeting has been held, albeit out of time, and has not to date been declared to be void.

Following on from the above, it seems to me that the Applicant is the Body Corporate Secretary, as neither her appointment, nor the meeting at which she was appointed, have been found to be invalid. As such, it also seems to me that the Applicant has proper authority to call an extraordinary general meeting of the Body Corporate in accordance with section 22(a) of the Small Schemes Module, if the Applicant considers that a meeting is necessary. Indeed, section 22(b) of the Small Schemes Module goes even further by allowing any member of the Body Corporate to call general meetings. On this basis, I do not consider that the Applicant’s request for an administrator to be appointed to call a general meeting is necessary at this time, and I intend to dismiss the application.

However, as a final note I do wish to address the issue of the financial year for the "Robert Henry Court" Body Corporate. From the material before me, it appears that the Body Corporate has been operating on financial years running 1 January to 31 December each year. Schedule 6 of the Act (previously Schedule 4) sets financial years for bodies corporate in the following terms:

""financial year", of the body corporate for a community titles scheme

(other than a community titles scheme established for an existing

1980 Act plan under the transitional provisions), means--

(a) the period from the establishment of the scheme until the end of

the month immediately before the month when the first

anniversary of the establishment of the scheme falls, and each

successive period of 1 year from the end of the first financial

year; or

(b) if an adjudicator changes the financial year of the body

corporate--the period fixed by the adjudicator as the financial

year and each successive period of 1 year from the end of the

period."

As stated previously, the "Robert Henry Court" community titles scheme was created on 18 December 2001. Therefore, it seems to me that in accordance with paragraph (a) of the above, the first financial year for the scheme was from 18 December 2001 to 30 November 2002, and thereafter will run from 1 December to 30 November each year.