No.9 Port Douglas Road [2003] QBCCMCmr 492 (1 May 2003)

Last Updated: 10 September 2007

P J HANLYREFERENCE: 0270-2003

INTERIM ORDER OF AN ADJUDICATOR

MADE UNDER PART 10 OF CHAPTER 6

BODY CORPORATE AND COMMUNITY MANAGEMENT ACT 1997

Number of Scheme:	24368
Name of Scheme:	No. 9 Port Douglas Road
Address of Scheme:	9 Port Douglas Road PORT DOUGLAS QLD 4871

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

Tecelec (Qld) Pty Ltd and Myles Ian Forsyth & Deborah Anne Forsyth, the owners of lots 4 and 5 respectively



I hereby order that the application for an interim order to declare motions 3, 4, 5 and 6 on the agenda of the extraordinary general meeting to be held on 1 May 2003 invalid, is dismissed.

I further order that if either motion 3 or motion 4 is carried at the meeting, the body corporate shall not execute the agreement until clause 3.4 has been deleted from the agreement.

I further order that if either motion 5 or motion 6 is carried at the meeting, the commencement date of the new body corporate management agreement and the termination of the previous body corporate management agreement shall be 16 May 2003.

STATEMENT OF ADJUDICATOR’S REASONS FOR DECISION - REF 0270-2003

"No. 9 Port Douglas Road" CMS 24368

The applicants, Tecelec (Qld) Pty Ltd and Myles Ian Forsyth & Deborah Anne Forsyth, have sought the following interim order of an adjudicator under the Body Corporate and Community Management Act 1997 (the Act), quote -

To declare motions 3, 4, 5 and 6 on the agenda of the extraordinary general meeting to be held on 1 May 2003 invalid.

Section 279(1) of the Act provides that 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 284(1)).

In the supporting grounds, the applicants state that motion 3 deals with the appointment of a new caretaker and letting agent, but the agreements forwarded with the notice of meeting are essentially the same as the previous agreements, in respect of which a previous order was made on application 0182-2003. The applicants further state that although the agreements purport to be new agreements, with the commencement date being 1 May 2003, the date of the scheduled meeting, clause 3.4 of the agreement states that the agreement operates retrospectively and confirms that the caretaker has been performing the duties under the agreement, even though the body corporate terminated the previous agreement on 7 February 2002. The applicants further state that motion 4 relates to the appointment of a caretaker of whom most owners know very little. In relation to motions 5 and 6, the applicants state that Body Corporate Services is the current body corporate manager, and there should be a separate motion to terminate its services. In addition, the applicants contend that the body corporate will be disadvantaged financially if Body Corporate Services’ engagement is terminated.

The body corporate committee was invited to respond to the application. Submissions were received from Mr Michael McEvoy, a director of Famestock Pty Ltd and from Ros Janes Lawyer.

Mr McEvoy stated that the application should be dismissed because the applicants were using the Commissioner’s office to obtain a commercial benefit. He contended that the financial arrangements in the new agreement were less than the original agreement because 1 year of CPI increase had not been included, and the duties were no less than those in the original agreement. He further stated that the mistakes in relation to dates occurred because the body corporate manager included the wrong page in the agreement. Mr McEvoy then provided a variety of reasons why the body corporate should be allowed to consider the appointment of a building manager. He contended that the building might be left "in a very awkward position and an impasse" and then listed a number of matters which related not to the building but to Famestock and its position. Mr McEvoy made no comment on the motion to appoint Mr & Mrs Bonomi. Mr McEvoy stated that the present body corporate manager’s agreement expires on 16 May 2003, and provided some background as to the reason that other body corporate managers were being proposed.

Ms Janes confined her submission to whether or not the agenda of the meeting complied with the Act and the Accommodation Module, and concluded that it did. Ms Janes noted that there are two minor typographical errors in clauses 1.1(r) and 1.1(s). She also stated that clause 3.4 was accidentally incorporated from a previous agreement, but stated that it has no effect on this agreement, as the agreement cannot commence earlier than 1 May 2003. Ms Janes concluded that, in any event, that clause could be severed under clause 13 of the agreement.

On 30 April 2003, Ms Amy Ah Ben, a staff member in the Commissioner’s office, spoke by telephone with Mr Dan Moy, an employee of Body Corporate Services, the present body corporate manager. Mr Moy confirmed that the agreement between the body corporate and Body Corporate Services expires on 16 May 2003.

I accept that the provisions of sections 76 and 77 of the Accommodation Module have been complied with. I further accept that the agreements have been forwarded with the notice of meeting in compliance with section 85(1)(b), and that all that would now appear to be required is for the engagement to be approved under section 85(1)(a). I further accept that the minor typographical errors in the agreement do not change the intent of the document and should not create confusion, particularly as they can be remedied before the agreement is executed, if it is approved.

The applicants have referred to previous applications which have been made in relation to the management and letting agreements, and have expressed the view that any motion in relation to new agreements should be declared void, and that the matter should be decided in a court of competent jurisdiction, not merely by one party that has the ability to control votes in the complex.

Previous applications have resulted in orders invalidating various motions, which have been proposed from time to time for the approval of "new" agreements, because those motions effectively sought to overturn the Commissioner’s ruling that the body corporate’s purported termination of the previous agreement on 7 February 2002 should be considered in a court of competent jurisdiction. The reason was that in each instance the commencement date of the "new" agreements was the date of the purported termination, although body corporate approval was being sought on a later date. On this occasion, however, motions 3 and 4 propose new agreements commencing from the date on which the body corporate approves them. Ms Janes has submitted that clause 3.4, relating to retrospective operation of the agreements, was inadvertently included in the agreements, and that in any event it can have no effect because of the commencement date being clearly stated as being 1 May 2003. I agree. I therefore propose to allow motions 3 and 4 to be considered by the meeting, but I have ordered that if either of these motions is carried, then clause 3.4 is to be deleted from the agreement prior to the execution of that agreement by the body corporate. I have taken this step to ensure that it is abundantly clear to all parties that these are new agreements. The previous purported termination, and the validity of any claim that Famestock may have in relation to duties performed after that date until the date of any new agreement will still therefore require determination by a court of competent jurisdiction.

I am aware, of course, that Famestock and the McEvoys voting power may result in the motion to appoint Famestock as the new manager being successful. However, if owners are financial they are entitled to vote as they wish, and such a vote would only be overturned if proper grounds for so doing could be shown.

I note the applicants’ concern that there is not a separate motion to terminate the services of the present body corporate manager. Except for the fact that the agreement between Body Corporate Services and the body corporate is due to expire on 16 May 2003, I would have invalidated motions 5 and 6 on this basis. Any motion proposed for the consideration of owners should contain only one subject matter, unless the motion is divided into parts with voting provided on each part. In other words, if motions 5 and 6 had been proposed with part (a) being for the termination of Body Corporate Services and part (b) being the appointment of the new manager, with the facility for a separate vote to be registered in respect of each part, then owners would have been given a proper opportunity to express their views on both aspects of the motion. As it stands, owners may wish to terminate Body Corporate Services but not select either of the newly proposed body corporate managers. However, as Body Corporate Services’ agreement expires on 16 May 2003 in any event, I have decided to allow motions 5 and 6 to be considered by the meeting, but to order that if either of the motions is carried, the date of commencement of the new agreement and the date of termination of the old agreement shall be 16 May 2003. I have made this decision to avoid unnecessary expense to the body corporate, since an order to invalidate motions 5 and 6 would only have resulted in the situation where the body corporate would have been without a body corporate manager on 16 May 2003 in any event, and then a further meeting would have had to be called. This may still result if owners vote against both motions, as they are entitled to do. However, if one or other of the motions is successful, then at least there will be a seamless transition.

In the circumstances, it is not intended to invite further submissions regarding this matter, or to make a further order, since this decision, though an interim one as sought by the applicants, is final in its determination of this matter. If the parties consider that an appeal of this decision is warranted, then they should appeal the interim order.