Coronation Gardens [2004] QBCCMCmr 379 (4 August 2004)

Last Updated: 30 September 2005

REFERENCE: 0382-2004

ORDER OF AN ADJUDICATOR

MADE UNDER PART 9 OF CHAPTER 6

BODY CORPORATE AND COMMUNITY MANAGEMENT ACT 1997

Number of Scheme:	24610
Name of Scheme:	Coronation Gardens
Address of Scheme:	37 Paradise Springs Avenue ROBINA QLD 4226

TAKE NOTICE that pursuant to an application made under the abovementioned Act by Bettie April Adams, the owner of lot 50

I hereby order that within 14 days of the date of this order the secretary of the body corporate shall call an extraordinary general meeting for the purpose of electing a body corporate committee. I further order that the extraordinary general meeting shall be held within 42 days of the date of this order. I further order that the committee election shall be by secret ballot, and that the nominees for various committee positions shall be those persons (including Bettie April Adams for the position of chairperson) for whom valid nominations were received by the secretary by midnight on 29 February 2004, that being the end of the body corporate’s financial year in 2004. I further order that the current committee members shall continue in their positions until the commencement of the extraordinary general meeting, at which time all committee positions shall be deemed to be vacant. I further order that the persons present and having the right to vote at the extraordinary general shall elect a person (with the person’s consent) to chair the extraordinary general meeting. I further order that the meeting may consider any other motions included on the agenda of the meeting.

STATEMENT OF ADJUDICATOR’S REASONS FOR DECISION - REF 0382-2004

"Coronation Gardens" CTS 24610

The applicant, Bettie April Adams, has sought an order of an adjudicator under the Body Corporate and Community Management Act 1997 (the Act) as follows:

1. To overturn the outcome of voting for officers and committee at our past AGM, as 16 sealed envelopes were overlooked by Ernst Body Corporate managers (Ernst)
2. To hold an EGM to rectify the situation.

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)).

On 29 June 2004 I made an interim order that the secretary of the body corporate not call the extraordinary general meeting requested by notice dated 1 June 2004 until this application was finally determined. The extraordinary general meeting had been requested to address concerns over the failure of the previous body corporate manager to include all secret ballot envelopes in the count for the committee elections.

I intend to repeat part of my statement of reasons for decision in the interim order:

In the supporting grounds the applicant stated that the dispute has arisen because the previous body corporate manager, Ernst, failed to present all ballot papers for the committee elections decided at the annual general meeting held on 26 May 2004. The applicant expressed the view that in these circumstances there was an invalid voting result. The applicant stated that owners want the matter resolved as soon as possible, as committee decisions which affect the scheme are being made.

On 25 June 2004 I conducted a teleconference with the applicant and Mr Ian Bloomfield, the principal of Advanced Body Corporate Administration, which firm is the newly appointed body corporate manager of the scheme. Mr Bloomfield explained that there was a ballot for the chairperson’s position and a separate ballot for the ordinary committee members’ positions. Ultimately the ballot for the ordinary members’ positions was not necessary because one of the nominees was elected to the position of chairperson, and another nominee was unfinancial, and therefore ineligible for election, thereby allowing all remaining nominees to be elected unopposed.

Mr Bloomfield advised me that the committee had held a meeting on 24 June 2004, at which it was decided to lodge a further application seeking a declaratory order as to the validity of the applicant’s nomination for the position of chairperson. Mr Bloomfield stated that he anticipated the further application to be lodged in the Commissioner’s office by the middle of the next week (that is, by the end of the month).

Mr Bloomfield also expressed concern that the committee had received a notice requesting that an extraordinary general meeting be called to resolve the issue concerning the committee election. Mr Bloomfield explained that in the committee’s view the problem might be resolved by an order from this office, but in the meantime the committee is obliged to call and hold the requested extraordinary general meeting, under section 61(3) of the Standard Module, which might ultimately result in costs being incurred unnecessarily. I advised the applicant and Mr Bloomfield that I would make a preliminary interim order that the requested extraordinary general meeting not be held until such time as I had considered all of the material in relation to this dispute, and the associated dispute to which Mr Bloomfield had referred.

As indicated by Mr Bloomfield, the body corporate lodged an application to resolve a dispute on 29 June 2004 (Application 0418-2004). That application sought orders that Mrs Adams be considered not to have been eligible for election for various committee positions for which she nominated herself, and that she be considered not to have been eligible for election as chairperson for which she was nominated by another owner. That application sought a further order that the election of the present chairperson should stand, there being no grounds for disputing his election.

In its response to this application, the body corporate committee reiterated its opposition to the applicant’s own nomination for various committee positions on the basis that it was received out of time, and at the time the applicant was unfinancial. It also reiterated its opposition to the applicant’s nomination by another owner for the position of chairperson on the basis that that nomination was received out of time; was only signed by one of the co-owners; was forwarded by facsimile and the original nomination form was never received by the secretary. The committee further stated that in the event I ordered that the nominations (or either of them) were valid then the votes contained in the unopened ballot envelopes handed over after the election by the previous body corporate manager should not be counted because of uncertainty surrounding the dates on which the secretary received the unopened envelopes, and that the position of chairperson should be decided by having a fresh election.

Mrs Adams’ nomination of herself for various committee positions

This scheme was established upon registration of the standard format plan on 19 March 1998. The financial year for this scheme means the period from the establishment of the scheme until the end of the month immediately before the month when the first anniversary of the establishment of the scheme falls (Act- Schedule 6 Dictionary). Accordingly, the financial year ends on 28 February except in a leap year, when it ends on 29 February. This year, 2004, is a leap year.

Nominations for committee positions must be given to the secretary by the end of the body corporate’s financial year (section 13(5) Body Corporate and Community Management (Standard Module) Regulations 1997 (Standard Module)). In the Notice Inviting Nominations forwarded to owners by the secretary/body corporate manager on 17 January 2004 owners were advised that nominations had to be received by no later than 28 February 2004.

That advice was incorrect. The secretary should have, and in fact appears to have, accepted nominations received no later than 29 February 2004.

However, Mrs Adams’ nomination of herself was received on 1 March 2004. Clearly therefore that nomination was not valid. Having so found, it is not necessary for me to consider whether Mrs Adams was financial at the time that she nominated herself. However, I note that the due date for payment of contributions for that particular quarter was 1 March 2004, the day after the nomination was due. Mrs Adams has provided me with a copy of a receipt dated 28 February 2004 for the sum of $400.40, and a copy of her bank statement which shows the sum of $400.40 debited to her account on 1 March 2004. That amount must also have been received by the body corporate on 1 March 2004, as the contribution notice dated 15 January 2004 provided for payment of interest at the rate of 30% per annum on overdue levies. The next contribution notice, dated 25 June 2004, showed a "nil" amount for arrears and interest, which confirms that Mrs Adams paid all amounts required to be paid by her under the contribution notice of 15 January 2004 by the due date.

Mrs Adams’ nomination for the position of chairperson by another lot owner

Mrs Adams was also nominated for the position of chairperson by the owners of lot 49, Graham and June Richards. That nomination was forwarded to the secretary by facsimile transmission at 7.27pm on 29 February 2004. The faxed form was noted by the secretary as having been received by the secretary on 29 February 2004. An acknowledgement of the nomination was sent to Mrs Adams on 2 March 2004. At the time of nomination, the nominator was noted by the secretary to be financial.

The nomination of Mrs Adams for the position of chairperson was a valid nomination. It was given to the secretary by the end of the financial year (the date of which is determined by reference to the regulations, not by decree of the secretary or the body corporate manager). The nominating owner did not owe a debt to the body corporate at the time that the nomination was received by the secretary. It was not necessary for the nomination to have been signed by both co-owners of the lot. It was also not necessary for the original nomination form to be given to the secretary after it had been given to the secretary by written notice by way of facsimile transmission.

At the time that the annual general meeting was held, Mrs Adams was financial (Standard Module –s10(3)(a)) and was therefore eligible to be a voting member of the committee.

The minutes of the annual general meeting held on 26 May 2004 record that Mrs Adams received 9 votes for the position of chairperson, and that Mr Borg-Olivier received 13 votes. Accordingly, Mr Borg-Olivier was recorded as having been elected.

Unfortunately, the previous body corporate manager discovered after the meeting that 16 ballot envelopes for the election of chairperson, and an equal number for the election of ordinary members had not been included in the count. Understandably, there is concern that the outcome of the election might have been different if those ballot papers had been counted.

The applicant has requested that the results of the election be overturned, and that an extraordinary general meeting be held to rectify the situation. It appears to me that this is the only sensible solution to the problem. It would not now be possible to simply adjust the votes by adding in the votes contained in the unopened ballot envelopes, as it appears that some of those present at the meeting who discovered that their ballot envelopes were not available for counting may have been given a further ballot paper, completed it and had it included in the count. There would therefore be the very real possibility that, if the 16 ballot papers were now to be added to the tally recorded at the annual general meeting that there could be some duplication of votes.

I therefore propose to order that the secretary shall call and hold an extraordinary general meeting at which all owners will be able to re-cast their votes by secret ballot (there having been no resolution of the body corporate that it be decided by open ballot) for the election of the committee. The nominees for the committee positions will be those valid nominations given to the secretary by midnight on 29 February 2004 (which will include the nomination by Mr or Mrs Richards of Mrs Adams as chairperson). I further propose to order that until that meeting is held, the present members of the committee shall continue in their positions. To do otherwise could, in my view, cause unnecessary confusion, as there would be no-one to make the day to day decisions for the administration of the body corporate. I have made provision in my orders for the chairing of the extraordinary general meeting, as the position of chairperson shall become vacant at the commencement of the meeting in light of my earlier proposed order.