Mimosa Villas [2004] QBCCMCmr 269 (24 May 2004)

Last Updated: 30 September 2005

REFERENCE: 0195-2004

ORDER OF AN ADJUDICATOR

MADE UNDER PART 9 OF CHAPTER 6

BODY CORPORATE AND COMMUNITY MANAGEMENT ACT 1997

Number of Scheme:	20224
Name of Scheme:	Mimosa Villas
Address of Scheme:	3 Armac Court CAPALABA QLD 4157

TAKE NOTICE that pursuant to an application made under the abovementioned Act by Mary Lovelock, the Owner(s) of lot 2

I hereby order that the application for orders to the effect that: 1. Motions passed at the annual general meeting of 27 March 2004 be put on hold; 2. Owners be given an explanation for the short notice for the meeting; and 3. Owners be given a guarantee of 21 days’ notice for future meetings, is dismissed.

STATEMENT OF ADJUDICATOR’S REASONS FOR DECISION - REF 0195-2004

"Mimosa Villas" CTS 20224

Application

Mimosa Villas Community Titles Scheme (Mimosa Villas) is a 20 lot scheme under the Body Corporate and Community Management Act (Act) and the Act’s Standard Module Regulation (Standard Module). The scheme is designed for residential purposes.

This application is by Mary Lovelock (applicant) seeking orders against the body corporate (respondent). The applicant claims that the body corporate provided insufficient notice of its annual general meeting. She is seeking an interim order to place all motions passed at the meeting on hold, an explanation of why documentation was not forwarded to owners 21 days prior to the meeting, and final orders to require a guarantee that all papers pertaining to an annual general meeting be received 21 days prior to the meeting.

Background

The chairperson of the body corporate has conceded that insufficient notice of the meeting was given. The relevant events do not appear to be in dispute. I accept that the relevant events were as follows:

• 24 January 2004 – The body corporate committee discussed and set motions for the annual general meeting;
• 27 January 2004 – The body corporate gave instructions to B & D Body Corporate Management (B&D) to distribute the notice of meeting. However, some points in relation to the legality of a proposed motion to require painting of units needed to be clarified. Also, the person at B&D who handled Mimosa Villas, Cheryl Richardson, was away for a number of weeks so there was a delay in sending out the notice;
• 24 February 2004 – The first notice was sent out for a meeting on 6 March 2004 but the notice was incorrect. The chairperson contacted B&D about the errors and B&D said they would send out a new notice at B&D’s own expense;
• 1 March 2004 – B&D sent out an apology to owners and said the meeting would be rescheduled to 27 March 2004;
• 22 March 2004 – The applicant received her notice of meeting for the rescheduled meeting of 27 March 2004. The notice itself was dated 12 March 2004 but the envelope was postmarked 20 March 2004; and
• 27 March 2004 – The meeting was held with 6 owners attending in person and 2 owners attending by voting paper.

The applicant attended the meeting and exercised her vote. However, she claims that the short notice for the first meeting would have disadvantaged her if it had proceeded, as she was not in Brisbane for a period around that date. She also claims that the short notice for the second meeting may have disadvantaged other owners in the scheme.

Decision

Applicable law

The body corporate must hold a general meeting annually, within 3 months of the end of each financial year (Standard Module, 60). The legislation contains specific provisions regarding calling annual general meetings. These include provisions designed to allow owners to attend the meeting by voting paper, rather than requiring all owners to physically attend the meeting. Relevant provisions include:

• A call for nominations for committee positions and the submission of owner motions should be made 3-6 weeks before the end of financial year (Standard Module 13, 41(5));
• 21 days’ notice of the meeting (with voting paper) should be provided to owners (Standard Module 43, 42);
• The meeting should be held within 3 months of the end of financial year (Standard Module, 60); and
• Minutes should be provided to owners within 21 days of the meeting (Standard Module, 59).

Failure to comply with requirements

There were a number of failures to comply with the legislative requirements for Mimosa Villas’ annual general meeting of 27 March 2004. Specifically, insufficient notice of the meeting was given, the meeting was held late, and the minutes of meeting had still not been provided to owners as late as last week.

The chairperson has provided detailed submissions indicating that the failures were the fault of B&D as body corporate manager rather than the committee. The applicant has not demonstrated any fault on the part of the chairperson or the committee to justify orders being granted against the body corporate. However, I am also unwilling to make any finding of fault against B&D as they are not a party to this application and have not had an opportunity to respond to the allegations made. For these quite technical reasons I am unwilling to make the orders sought against the body corporate and B&D. However, I can still consider the main issue of whether the failures to comply with the legislation should invalidate the meeting.

Failure to give proper notice of a meeting does not automatically invalidate the meeting. Rather, interested persons are expected to lodge an application within 3 months of a meeting being held if they want the meeting declared void (Act, 242). In considering this type of application, an adjudicator is required to make an order that is just and equitable in the circumstances (Act, 276). In doing this, it is recognised that the detailed provisions of the standard module make it almost inevitable that from time to time there will be non-compliance. Non-compliance of an insubstantial nature should not be allowed to imperil the actions of bodies corporate or their committees, particularly in the instance of committees where actions are taken bona fide.^[1] Rather, it is relevant to look at the consequences of a failure to comply with the legislation and at whether that failure has disadvantaged any person.

Consequences of failure to comply

The provisions of the standard module were not complied with in the calling of the meeting. However, there is no evidence that the results of the meeting would have been any different if proper notice had been given. All owners have been given the opportunity to provide submissions in respect of the late notice and only one owner has responded. This owner did not provide any evidence of particular disadvantage in the meeting proceeding without her and it should be noted that the applicant herself actually attended and voted at the meeting notwithstanding the late notice.

Failure to comply with the legislation is a serious matter. However, there is no evidence to suggest that the failures resulted in sufficient prejudice to justify invalidating the meeting. All owners would be inconvenienced to some degree if it were necessary to hold the meeting again and it does not seem just and equitable in these circumstances to grant the orders sought.

Other steps that can be taken

It does appear that a number of unfortunate events contributed to the failures to comply with the legislation in this instance and the applicant has failed to satisfy me that the circumstances justify the grant of the orders sought. However, it is in the capacity of owners to take steps to minimise the possibility of similar events occurring in the future. The legislation recognises the need to balance the rights of individuals with the responsibility for self management as an inherent aspect of community titles schemes (Act, 4). An active committee and an interested group of owners are empowered by the legislation to take steps to correct or avoid the types of problems raised in this application.

I am not willing to make any findings against B&D for the technical reason that they are not a party to this dispute. However, if owners make enquiries and are dissatisfied with B&D’s performance then owners can take steps to require B&D to rectify matters or require the appointment of another body corporate manager. For example, a committee can issue a remedial action notice to a body corporate manager who is failing to perform its obligations (Standard Module, 86C(4)). Failure to comply with this notice gives owners an opportunity to terminate the manager’s services if they wish. Alternatively, owners may be willing to allow a body corporate manager to complete its engagement but can submit a motion to consider the appointment of an alternative body corporate manager on the expiry of the engagement (Standard Module 41, 87).

Provided the majority of owners take an active interest in the administration of the scheme and committee members serve effectively, it should be possible to minimise the possibility of similar contraventions in the future.

Order

For these reasons, I dismiss the application.

^[1] Boulton J, Wei-Xin Chen v. Body Corporate for Wishart Village CTS 19482, District Court (Brisbane) D4080/2000, 29 May 2001.