Golden Eagle [2004] QBCCMCmr 139 (15 March 2004)

TAKE NOTICE that pursuant to an application made under the abovementioned Act by Sujit Ranjan Das GUPTA, the owner of Lot 1,

I hereby order that the application for the following order –

"Non compliant meeting of 9 Sep 03 attended by owners of Units 2 and Unit 3 only be declared an invalid AGM with previous committee and cheque signatories resurrected until a compliant AGM is held representing the interests of all interested parties",

is dismissed.

I further order that the body corporate, in its discretion, may approve the placing of a padlock on the gate in the fence running between the external wall of the Lot 3 building and the southern scheme boundary providing that –

(a) at least one key is provided to each of the owners of lots in the scheme which must be retained by the occupant of the lot from time to time; and

(b) the Queensland Fire Service or an accredited fire safety expert, gives an opinion in writing that the locking of the gate does not breach fire safety regulations in regard to the safety of residents escaping fire in the scheme buildings.

STATEMENT OF ADJUDICATOR’S REASONS FOR DECISION - REF 0678-2003

"Golden Eagle" CTS 21198

JURISDICTION:
This is a dispute between an owner (the applicant Sanjit Gupta), and other the body corporate (the respondent), concerning the validity of a body corporate general meeting and the exclusion of the the applicant owner from using a part of the common property. These are matters that fall within the dispute 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) 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 –

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 body corporate (committee) and to the other two owners, namely: Steven John Butler and Kristin Louise Butler, the co-owners of Lot 2; and Michael Anthony Quinn and Maree Catherine Perronnet-Quinn as the co-owners of Lot 3 (and occupiers of Lot 2), with an invitation to make a written submission to the application.

Both parties made submissions to the original application and to the applicant’s amendment. The applicant Gupta viewed the submissions and subsequently lodged a written reply (see sections 246 and 244 of the Act respectively).

This is a further application by Gupta which is in effect a complaint against the other two owners (the Butlers of Lot 2 and the Quinns of Lot 3) as they constitute the majority interest in the body corporate. The previous application, Application 376-2003, was the subject of an extensive determination over three orders (376I-376A and 376F-2003) of a number of disputes. All three owners were involved in these disputes. At the time of determining the final matters in Order 376F on 9 January 2004, I made the following observation in respect of this present applicant –

I had hoped that the parties may have resolved the present disputes from the range of information provided in my statements of reasons to the three orders, and perhaps by telephoning the Freecall service, in which case the applicant could then have withdrawn this application. That did not happen so I shall proceed to a determination, though I maintain the matters would have been better resolved by the parties – as the applicant is an engineer and at least one of the Quinns (the only other residents) is a self-employed accountant, then as professional persons they should realize the dubious benefit of continuing to resolve matters through adjudication or the courts.

I do not intend to set out here the details of the matters in dispute, but shall examine the argument of the parties when addressing the relevant facts under "Determination".

DETERMINATION:
"Golden Eagle" was registered as a group titles plan (now termed a standard format plan) on 8 October 1985 and comprises three lots. The scheme is regulated by the Body Corporate and Community Management (Standard Module) Regulation 1997 ("the Standard Module").

Under the transitional provisions of the Act, both the Contribution Schedule lot entitlements and the Interest Schedule lot entitlements are: Lot 1 = 25; Lot 2 = 18; and Lot 3 = 22. All owner contributions to both the administrative and sinking funds must be in proportion to their respective lot entitlements (i.e. Lot 1 pays a 25/65^th share, Lot 2 = 18/ 65^th, and Lot 3 = 22/65^th ).

First Dispute – Incorrect notice period:
The applicant Gupta alleges that he did not have the benefit of 21 days notice of the relevant meeting as provided for in the legislation (see section 43 of the Standard Module). The then secretary, Kristin Butler, has stated in the Butler’s submission that notice of the meeting was mailed on 18 August 2003 with the Australia Post guaranteed next day service, and Gupta confirms he recovered the notice from his letterbox on 19 August.

Gupta states that, "less than 21 days notice was given from time of receipt of meeting to commencement of meeting." He does not quote any authority for his assertion that the 21 days (see section 43 of the Standard Module) runs from receipt. Section 38(1)(a) of the Acts Interpretation Act 1954 provides that, for reckoning time in the circumstances of section 43 of the Standard Module where A general meeting must be held at least 21 days after notice of the meeting is given to lot owners, the date of "giving" notice (ie posting the notice) is excluded as is the date of the meeting. Accordingly, the notice was posted on 18 August so 21 days excluding that date ends on 8 September, allowing the meeting to be held on the next day, as it was.

There is an alternative view to the calculation of the notice period based on section 39A of the Acts Interpretation Act 1954 Acts Interpretation Act 1954 where service by post is permitted, namely that service is only effected when the letter would be received in the ordinary course of the post. While the legislation does not explicitly provide for service by post it is implicit in the words "Written notice...must be sent to the owner..." in section 42(1) of the Standard Module for the service of notices of meeting; also it is obvious that owners of lots in Queensland may reside interstate and overseas and therefore post is the most practical means of serving notice on them. While this could vary considerably the situation for recipients interstate and overseas, it would only affect the applicant by a day if it were to apply. It is the view of adjudicators that if this alternative means of calculating the period were to apply it would impose an impractical and inconvenient duty on bodies corporate in having to calculate the postal time for particular owners. For owners in remote locations, it could mean bodies corporate having to calculate and add weeks to the 21 day period.

I do not need to explore this matter in any depth for this application as I can decide the matter on other grounds, but I would say in passing that the difficulty and inconvenience in applying section 39A in determining notice would assuredly not be understood by not only self-managed bodies corporate but by the many professionals who assist bodies corporate in these tasks.

Given the history of dispute in this scheme, it may well be likely that the applicant discovered the error and sought to stand on the perceived contravention by firstly refusing to attend the meeting and later seeking to void it for irregularity by submitting this application. It is also the case that even if the applicant had attended the meeting and voted, his vote would not have altered the outcomes of the motions; as the applicant has pointed out, he is out-voted in matters where a simple majority of votes or lot entitlements determines the outcome. (As an aside: the applicant has mentioned on a number of occasions that "family-collusion" voting by Lots 2 and 3 is unfair, however this is the unavoidable result of ownership of lots within the scheme and voting entitlements cannot be altered for this reason. However, in respect to more serious matters requiring either a special resolution or resolution without dissent under the Act, the applicant has the ability to vote down such motions. Of course even for ordinary resolutions, if the applicant is able to show oppression or that the others had obtained an unfair benefit from their voting superiority, for example voting one of them a lucrative body corporate contract well beyond market price, then he may apply for the matter to be adjudicated.)

In the circumstances, I do not consider that the applicant has been disadvantaged by the shorter notice and my order is to dismiss this order sought.

Second Dispute – Access to common property:
In the grounds submitted in respect to the second order sought, the applicant states that the other owners have denied him access to an area of common property by, "placing a lock on the access gate without consent of or key distribution to unit one." There is no description of the area locked off, photograph or sketch plan.

However it was recognizable to the other owners who have both stated in their respective submissions that a padlock was fixed for security reasons after the gate was left open a number of times. In June 2003 a key to the padlock was given to the applicant however, after it was removed (allegedly by the applicant’s partner) an alternative lock was fitted, however the original one was subsequently found in an obscure location on the common property and replaced on the gate. They believe that had the applicant tried his key then he would not have made the application.

From photographs and notations on copies of the registered plan submitted by the Quinns, I am able to establish that the area enclosed by the fence and gate is situated at the end of the access driveway (western end), opposite Lot 3. The gate abuts the external wall of the Lot 3 building. They state that people were observed entering the area of common property enclosed by the fence and gate and on 4 September 2003 the Quinns and Butlers had their solicitors, Alex Mackay & Co., write to the applicant concerning one such alleged incident.

The applicant has claimed that the fitting of the padlock (presumably the second one) had, "caused considerable inconvenience to the only other resident owner being myself in Unit One." Looking at the position of the gate and the enclosed area, and the configuration of the three lots, I cannot see any reason for the applicant to use the gate or access the area except for recreational purposes. It is certainly the case that owners are tenants in common of the common property giving each owner a general proprietary right in respect to the use of common property, however that common law right is limited by the legislation at section 167 of the Act which states –

While the other owners have complained of the area being accessed after hours by the applicant or his invitees on some three occasions, I do not think they wish me to consider further any contravention of the above provision. Accordingly I shall leave them as just that, allegations, though I note the applicant after viewing the submissions did not repudiate these allegations. However, regardless of this, it seems reasonable to me that for security purposes the owners of Lot 3 would want to padlock the gate to exclude intruders. This would be acceptable providing other occupiers have a key for access. The applicant states that no similar security measure is available to Lots 1 and 2, though this is no good reason to refuse a security measure to Lot 3 because of the favourable circumstances of its location. However, he does raise the point that a padlocked gate may be an unacceptable obstacle to escape by residents if fire prevents escape through front exit points. This is a point that needs to be considered by the Queensland Fires Service or an accredited fire safety expert, and my order allowing the padlocking of the gate (with keys to all occupiers) is contingent upon expert opinion that it does not breach fire safety regulations as they apply to the scheme buildings.

That concludes my determination of the two matters for which the applicant has sought orders. Though not related to the orders sought, the applicant also put that only having two signatories may not be in the best interests of the body corporate and the bank instruction should return to the previous "all three to sign". The applicant has seemingly misunderstood the comments I made at pages 8 and 9 of my statement of reasons to Order 376A-2003 where I said that the evidence is against there ever having been a requirement for three signatories. I cannot recall even one of the largest schemes having such an arrangement.

Number of Scheme:	21198
Name of Scheme:	Golden Eagle
Address of Scheme:	71 Eagle Terrace, AUCHENFLOWER QLD 4066

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.

Queensland Body Corporate and Community Management Commissioner - Adjudicators Orders

Golden Eagle [2004] QBCCMCmr 139 (15 March 2004)