II Villaggio [2003] QBCCMCmr 566 (11 June 2003)

Last Updated: 12 September 2007

REFERENCE: 0099-2003

ORDER OF AN ADJUDICATOR

MADE UNDER PART 9 OF CHAPTER 6

BODY CORPORATE AND COMMUNITY MANAGEMENT ACT 1997

Number of Scheme:	28518
Name of Scheme:	Il Villaggio
Address of Scheme:	24 Radan Street, SUNNYBANK HILLS QLD 4109

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

Teck Yeow NG, as a co-owner of Lot 40,

I hereby order that the annual general meeting held on 13 November 2002 is void and all decisions made at the meeting are void, including the election of the committee but that the committee meetings held on 6 January, 17 February, and 19 February 2003, and the extraordinary general meeting held on 7 February 2003, were validly convened meetings.

I hereby order that –

1. Richard Holmes of Barard Management Pty Ltd of Technology One Centre, Level 1, 67 High Street, Toowong Qld 4066 (PO Box 302 Toowong Qld 4066) is appointed Administrator to call, hold and chair a general meeting ("the meeting") of "Il Villaggio" within three (3) months of the date of this order for the purpose of –

•	the consideration of motions included on the agenda of the meeting; and
•	the election of committee members.

2. The Administrator shall hold the appointment for the period beginning from the date of this order until the close of the meeting ordered.

I further order that within seven (7) days of the date of this order the Administrator must give a copy of this order to each person whose name appears on the roll, and –

• seek nominations for committee positions; and

• invite owners to submit motions for inclusion on the agenda for the meeting,

to be received within 4 weeks of the date of this order.

I further order that –

(1) For the purpose of calling, holding and chairing the meeting, the Administrator shall have all the powers of the chairperson, secretary and treasurer of the body corporate, and of the committee, with the exception of the following powers -

• to further delegate any of those powers to another person; or

• to incur any expenditure apart from that necessary for the calling and holding of the meeting.

(2)	Conduct the election of the committee in accordance with the provisions of section 17 of the Body Corporate and Community Management (Accommodation Module) Regulation 1997("the Accommodation Module"), providing that the ballot is conducted by secret ballot.

(3)	The meeting shall be otherwise called and held as an annual general meeting in accordance with the legislation, particularly sections 40 and 43 of the Accommodation Module, and all other provisions relating to meetings under Part 4 of the Accommodation Module.
(4)	Voting on all motions at the meeting must be by secret vote.

I further order that the meeting shall be deemed to be the annual general meeting required under the provisions of section 58 of the Accommodation Module to have been held between 1 October and 31 December 2002.

I further order that the committee ballot papers and voting papers must be sealed and retained in the possession of Richard Holmes for a period of three (3) months from the date of the meeting when they will be destroyed by him, unless earlier required by an adjudicator or the court in respect of an application to resolve a dispute.









STATEMENT OF ADJUDICATOR’S REASONS FOR DECISION - REF 0099-2003

"Il Villaggio" CTS 28518

The applicant, Teck Ng of Lot 40, has sought the following orders of an adjudicator under the Body Corporate and Community Management Act 1997 ("the Act") -

1.	That the AGM held on November 2002 was void for irregularity and consequently all resolutions passed at the AGM was at all times void.

2.	That the positions of the committee be declared vacant.

3.	That the Committee Meeting of the Body Corporate held on 6 January 2003 was void and all of the motions passed at the meeting were at all times void.

4.	That the Extraordinary General Meeting of the Body Corporate held on 7 February 2003 was void and all of the motions passed at the EGM were at all times void.

5.	That Richard Holmes of Barard Management Pty Ltd ("Appointee") be appointed to call and hold an annual general meeting of the Body Corporate within 3 months from the date of this order for the purpose of:

(NOTE: the order sought then sets out a serious of powers and functions that are normally given in an order of this type).


JURISDICTION:
This is a dispute between an owner (the applicant Ng) and the body corporate (the respondent), concerning the validity of the recent annual general meeting, and as a consequence: the validity of the elected committee; the validity of a subsequent committee meeting; the validity of a subsequent extraordinary general meeting; and, in lieu, the appointment of a person to convene a general meeting to be deemed to the annual general meeting. These are matters falling within the disputes resolution provisions of the legislation (see sections 227, 228 and 276 of the Act).

General powers of an Adjudicator in making an order:

Section 276(1) 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 this Act or the community management statement; or
c)	a claimed or anticipated contractual matter about –
(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) of the Act). An adjudicator’s order may contain ancillary or consequential provisions the adjudicator considers necessary or appropriate (section 284(1) of the Act).

APPLICATION AND SUBMISSIONS:

Under section 243 of the Act, a copy of the application was provided to the respondent body corporate (committee) and to each of the other owners, with an invitation to respond to the matter of dispute raised in the application. Fourteen owners made a submission to the application by signing a pro-forma submission forwarded to them under cover of a letter from the applicant Ng canvassing their support.

The applicant is also the Resident Manager for the scheme, holding letting and caretaking agreements.

This is one of two applications that concern the validity of the annual general meeting and the validity of subsequent meetings. The other application, Application 261-20003, was lodged by the body corporate (committee) and it seeks a declaratory order that the same person, Richard Holmes, be appointed to convene an annual general meeting in lieu of that held on 13 November 2002 (which the committee also believes is invalid). However, while the committee seeks the same order in this respect, it makes different submissions to that of the applicant regarding the validity of subsequently held committee meetings and an extraordinary general meeting.

Because of the commonality of the dispute for each application, I intend to deal with them together. Accordingly, as this was the first application lodged for adjudication, I intend to deal with all of the issues in these reasons by taking into account the information contained in both applications and the submissions to both applications. The reasons to my order for Application 261-2003 will therefore largely be a mere adoption of the reasons to this order.

The brief facts of the matter are as follows.

It is common ground between the parties that a quorum was not present at the annual general meeting ("AGM") even though, in contravention of the legislation, the meeting was allowed to proceed. At the time the AGM was held on 13 November 2002, the number of "voters" within the meaning of the legislation was such that a quorum under section 46 of the Accommodation Module regulations was either 8 voters (according to the applicant in his grounds) or 9 voters (according to the Body Corporate Manager, Barard Management Pty Ltd, in its letter of 24 March 2003 to the chairperson, M Wallace), whereas only 8 voters were present. Whatever was the true number of voters the quorum was not met as section 46 requires that "at least 25% of the number of voters" must be present.

The minutes of the meeting show that the following 7 persons were elected to committee positions;

Chairperson: Mike Wallace

Secretary: Val Ivett

Treasurer: Louise Crawford

Ordinary

Members: ChenCheong, Chui Li Cheong, Meta Walden, and Deng Hua Rose Yyang.

The committee held meetings on 6 January, 17 February and 19 February 2003, and also convened an extraordinary general meeting ("the EGM") held on 7 February 2003. The applicant Ng has sought orders to invalidate the committee meeting of 6 January and the extraordinary general meeting, but not the other two committee meetings held.

In a submission signed by all of the committee members (except M Wallace who I understand has sold his lot) to Application 261-2003, there is included a copy of a letter from Teck Ng to the committee secretary stating that the AGM was invalid for lack of a quorum and that the committee was therefore invalidly elected and should not take certain actions (see later under heading "Determination"). The committee acknowledges, however, that on 20 February it received a letter from Ng with a copy of his application attached, which alerted it to the possible void nature of the AGM (Note: The application was not forwarded by this office to the body corporate (committee) until 24 April after the applicant had remedied certain matters, by which time the committee had lodged its own application 261-2003).

The records also show that the Resident Manager Ng had negotiated to sell his management rights (letting and caretaking agreements) to Kimshar Pty Ltd, however the sale had fallen through. The records also show some conflict between the committee and some owners, and Ng, including that evidenced by two resolutions passed at the EGM of no confidence in Ng as Resident Manager and that there be a review to decrease his remuneration as Manager (Caretaker). The latter resolution arose out of the question whether the agreement required the Resident Manager to personally carry out gardening tasks.

DETERMINATION:

The scheme "IL Villaggio" was registered as a standard format plan on 31 August 2000 under the Accommodation Module regulations, and comprises 40 lots.

There is no question that the AGM should not have proceeded for lack of quorum and my order includes that this meeting is void.

However, that does not necessarily mean, as Ng has submitted, that the committee elected at the meeting was not able to meet and make decisions on behalf of the body corporate (assuming they are within jurisdiction). Where there is good faith by the committee, its decisions may nevertheless stand; this is provided for in section 100(4) of the Act (identically worded to section 92(4) of the Act as it stood at the relevant time) which states –

100 Power of committee to act for body corporate

(4) If persons, honestly and reasonably believing that they are the committee for the body corporate, make a decision while purportedly acting as the committee, the decision is taken to be a decision of the committee despite a defect in the election of 1 or more of the persons.

From the evidence before me, the committee only became aware of the possibility that the AGM was void, and therefore its election was in doubt, when it received notice on 20 February from Ng of his lodgement of an application to have the AGM voided. The committee submission states that all of its members acted in good faith at the time of holding the three committee meetings and the EGM, and it did not meet after 20 February.

Accordingly, I consider the committee decisions made at its meetings of 6 January, 17 February and 19 February are valid decisions and should be given effect to, providing they are valid resolutions.


As to the EGM of 7 February, it follows that I also regard the committee able to determine to convene such a meeting, and for the secretary, or alternatively Barard Management on the instructions of the committee as the case may have been, to call the meeting. The applicant Ng does not advance any grounds as to why this meeting should be invalidated other than that as the AGM was invalid then the committee was invalid and therefore no one was able to validly call a general meeting. As I have explained, this is not so. I note also that a quorum was present at this EGM, there being two owners present and some 17 owners having submitted voting papers. Accordingly, I regard the EGM also as a valid meeting and its decisions stand so far as they are valid resolutions (I am not required by the applications to canvass the validity of the resolutions of either this meeting or the committee meetings).

As a consequence of the voidance of the AGM, I am satisfied that a meeting should be called that shall be deemed to be the annual general meeting. The meeting should also be asked to ratify contributions levied to date. I do not propose to allow the previous committee to fill the void of the invalidly elected committee, but to appoint Richard Holmes of Barard Management to constitute the committee for the purposes of calling and chairing a meeting to be deemed to be the annual general meeting, in accordance with the terms of my order. The committee elected at the meeting shall be the body corporate committee from the close of the meeting.

However, given the conflict that has occurred within the body corporate, I am adding the requirement that both the election of the committee and the determination of motions must be by secret ballot, with the votes and ballots to be sealed and retained by Richard Holmes, and therefore not available for inspection, for a period of three months when they are to be destroyed unless required by this office or the Courts relative to any application.

I would also like to comment on the letter of the Resident Manager’s letter of 18 March referred to earlier. Mr Ng states in that letter, "I have been advised by the Commissioner’s Office that I am not obliged to attend any purported meetings of the Committee or attend to any purported instructions issued by the Committee on the ground that there is no valid Committee." This office does not give such advice – for a person from this office to make the statement that there is no valid Committee would be to prejudge the outcome of the applications, and there are protocols in place to prohibit office staff from making any such statement.