Waterford Place [2004] QBCCMCmr 274 (26 May 2004)

Last Updated: 30 September 2005

REFERENCE: 0066-2004

ORDER OF AN ADJUDICATOR

MADE UNDER PART 9 OF CHAPTER 6

BODY CORPORATE AND COMMUNITY MANAGEMENT ACT 1997

Number of Scheme:	19267
Name of Scheme:	Waterford Place
Address of Scheme:	32 Chambers Flat Road WATERFORD WEST QLD 4133

TAKE NOTICE that pursuant to an application made under the abovementioned Act by David Robert Anthony McNicol, the owner of lot 13

I hereby order that the application by David Robert Anthony McNicol, the owner of lot 13, for an order that motion 9, "Deed of Security" resolved at the AGM held on 6th June 2000 be revoked without a vote of current lot owners, is dismissed.

STATEMENT OF ADJUDICATOR’S REASONS FOR DECISION - REF 0066-2004

"Waterford Place" CTS 19267

The applicant, David Robert Anthony McNicol, the owner of lot 13, has sought the following order of an adjudicator under the Body Corporate and Community Management Act 1997 (the Act), quote –

Motion 9, "Deed of Security" resolved at the AGM held on 6^th June 2000 be revoked without a vote of current lot owners.

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-

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

The scheme

The scheme is a subdivision of 17 lots registered under a group title plan (now a standard format plan). The regulation module applying to the scheme is the accommodation module.

The application and submissions

This office sought submissions in respect of the application from the body corporate committee and all owners. Two submissions were received from owners supportive of the application. A submission was also received from the secretary which opposes the application. I do not intend to set out in any detail the applicant’s grounds, nor the contents of submissions in response. I am satisfied that all parties are aware of the position of the other from the application, submissions and the right of reply processes. I therefore intend only to refer to those materials necessary for a determination of the issues raised.

The applicant seeks to invalidate motion 9 carried by the body corporate at its AGM held on 6 June 2000. The resolution resolved that the body corporate execute the deed of consent to security between the National Australia Bank and the manager, Beechdeen Pty Ltd. The deed was subsequently executed by the parties in October 2000.

I have two significant reservations concerning this application. The first is that it is made considerably outside the time limitations imposed in the Act. Section 242 provides –

242 Time limit on certain applications
(1) This section applies to an application for an order declaring void--
(a) a meeting of the committee for the body corporate, or a general meeting of the body corporate; or
(b) a resolution of the committee or body corporate; or
(c) the election of an executive or other member of the committee.
(2) The application must be made within 3 months after--
(a) if subsection (1)(a) applies--the meeting; or
(b) if subsection (1)(b) applies--the meeting at which the resolution was passed or purported to be passed; or
(c) if subsection (1)(c) applies--the meeting at which the executive or other member was elected.
(3) However, if the making of the application does not comply with subsection (2)--
(a) the commissioner must deal with the application (including making a dispute resolution recommendation for the application) as if the making of the application complied with subsection (2); and
(b) an adjudicator to whom the application is referred for specialist or department adjudication may, for good reason, waive the non-compliance.

The resolution was carried at a meeting held on 6 June 2000. The application was made on 30 January 2004. This is almost 3 years and 8 months after the relevant meeting. The statutory time limitation is 3 months. The intention of this provision is to give some degree of certainty to a body corporate in implementing resolutions carried. If the validity of a resolution could be challenged at any time, then it might potentially have adverse consequences for a body corporate seeking to implement its resolutions. The courts have counselled against too strict an interpretation of this provision; and have suggested all relevant circumstances must be taken into account. However even doing so, I consider that there is not good reason to waive the non-compliance.

Secondly, as pointed out by the secretary, and acknowledged by the applicant, the applicant was not an owner in the scheme until May 2003, some three years almost after the resolution was carried. The legislation is silent on this aspect, however one really questions whether the applicant can even establish a "dispute" between himself and the body corporate sufficient for the purposes of making an application. The applicant was not a member of the group of owners at the time of the relevant resolution being carried. Conversely, should a person who is not an owner at a time when a resolution is carried be able to challenge the validity of a resolution carried prior to that person becoming an owner. Presumably the then owner of the lot choose to exercise their vote in respect of the relevant motion in a particular way. I consider the better view is that they should not be able to so challenge.

Further, the applicant in his grounds refers to concepts of conflict of interest. The statutory provisions concerning conflict of interest only apply to committee meetings and not to general meetings (see section 32 of the Accommodation Module). As the resolution in question was carried at a general meeting, and not a committee meeting, then the applicant’s focus on this aspect is misconceived.

Finally, I have considered the terms of the Deed and conclude that it is not onerous or draconian on the body corporate in any particular way. The applicant has not sought to construct an argument on this basis, namely that the provisions of the Deed are such that the deed could not be considered to be for the benefit of the body corporate, except in the most general way.

I suggest that the applicant does take his concerns to the body corporate in general meeting. If the meeting determines to seek the termination of the Deed, then so be it. However, in the circumstances, I am not prepared to order in terms as sought by the applicant.