Kangaroo Court [2004] QBCCMCmr 419 (1 September 2004)

TAKE NOTICE that pursuant to an application made under the abovementioned Act by Samuel Joseph Vella, the owner of lots 1, 3 and 4

I hereby order that Beverley Joan Mort, the owner of lot 2, as co-signatory to the body corporate bank accounts, shall sign all cheques for properly authorised body corporate expenditure submitted to her by Samuel Joseph Vella within 7 days of receipt by her of those cheques and shall return the cheques to Samuel Joseph Vella within a further period of 7 days.

I further order that the unpaid penalty of $112.50 debited to the levy account of Beverley Joan Mort shall be waived forthwith.

I further order that the application for the following orders:

• That Kangaroo Court body corporate – office and all correspondence, all bank statements, cheque books and bank accounts and other mail relating to the body corporate will be sent to the secretary – Samuel Vella – 45 Sunrise Boulevarde, Surfers paradise 4217.
• That Bev Mort to notify the Tax Department of change of address and that Samuel Vella is the contact person.
• Bev Mort to be removed as co-signatory to Kangaroo Court body corporate Suncorp bank accounts.
• The use of proxy by Bev Mort to be discontinued.

is dismissed.

STATEMENT OF ADJUDICATOR’S REASONS FOR DECISION - REF 0065-2004

"Kangaroo Court" CTS 13331

The applicant, Samuel Joseph Vella, has sought an order of an adjudicator under the Body Corporate and Community Management Act 1997 (the Act) as follows:

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

(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)).

In the supporting grounds, the applicant provided historical background to the dispute, and also provided copies of relevant documentation including minutes of meetings. It is evident from this material that there has been significant disputation between the applicant and the only other owner in the scheme, Ms Beverley Joan Mort, for a number of years.

Ms Mort was invited to respond to the application. Her submission confirms the above observations.

The applicant owns 3 lots in this 4 lot scheme. Clearly any motion that is proposed for consideration at a general meeting as an ordinary resolution will succeed or fail on the applicant’s vote alone. All budget motions, motions fixing contributions to the sinking and administrative funds and motions approving insurances fall within this category. Not surprisingly, Ms Mort feels as if her views are irrelevant. However, unless she can demonstrate that the motions are oppressive, there is really nothing much that she can do. Ms Mort does not attend annual general meetings in person, and has instead arranged for her proxy, Mr Danieletto, to attend on her behalf. It seems to me that this is a prudent decision, given the obvious communication difficulties between the applicant and Ms Mort. Furthermore, Mr Danieletto is an experienced body corporate manager, and therefore well aware of the requirements of the legislation in relation to body corporate administration and meeting procedure.

I have no intention of making most of the orders sought by the applicant. To do so would completely remove Ms Mort from involvement in the administration of the body corporate. I note from the minutes of the annual general meeting held on 30 September 2003 that it was unanimously agreed at that meeting that the applicant and Ms Mort would jointly hold the positions of chairperson secretary and treasurer of the body corporate. In the absence of such an agreement, there would have been a similar outcome in any event, given that section 11(4) of the Body Corporate and Community Management (Standard Module) Regulations 1997 (Standard Module) by which this scheme is regulated, provides that where there are 3 or more lots in a scheme and there are only 2 different owners, the committee consists of 2 individuals who are owners, or the nominees of owners, of lots, and if they cannot agree, the positions of the executive members are jointly held by both of them. Accordingly, communications from the Taxation Office and from the bank should go to both the applicant and Ms Mort.

The applicant has also sought to prevent Ms Mort from appointing a proxy. Section 72(3) of the Standard Module provides that the body corporate may by special resolution prohibit the use of proxies for particular things, or altogether. No such resolution has been passed by the body corporate. I do not intend to make such an order. Even if the body corporate were to pass such a resolution in the future, Ms Mort would be entitled to seek an order of an adjudicator that the motion was void if it could be shown that its intention was simply to oppress Ms Mort or to deny her the opportunity of having a representative in person at the annual general meeting.

Similarly, the applicant has sought to have Ms Mort removed as co-signatory of the body corporate bank accounts. The whole purpose of a co-signatory is to ensure that body corporate funds are expended on authorised payments. I do not intend to make this order. I also note that in considering another application (0252-2002) which dealt in part with the question of signatories to the bank account, Adjudicator Reardon stated on 14 June 2002:

As there are only two owners of lots in the "Kangaroo Court" community titles, I consider that this motion (to remove Ms Mort as a signatory to the body corporate bank accounts) unnecessarily restricts the Applicant’s role in the Body Corporate. Further, as I intend to order that the Applicant and the nominee of the Owner of Lots 1, 3 and 4 jointly hold the executive positions of the Committee, it appears entirely consistent and reasonable that the Applicant remain a signatory for the Body Corporate’s bank accounts.

I do intend to order that Ms Mort, as co-signatory to the body corporate bank accounts, shall sign all cheques for properly authorised body corporate expenditure within 7 days of receipt by her of those cheques and shall return the cheques within a further period of 7 days to the applicant. A properly authorised cheque will be one in payment of body corporate expenditure which has either been approved at a committee meeting (if within the limit for committee spending i.e. $500.00) or approved at a general meeting. If the amount exceeds the limit for major spending for the scheme ($1000.00) then the body corporate must have been provided with at least two quotes for the expenditure, and those quotes must be incorporated in a motion with alternatives which is then considered at a general meeting (see sections 42B and 104 of the Standard Module). Ms Mort has stated in her submission that, apart from one occasion several years ago when she was hospitalised, she denies that she has withheld co-signing any cheque drawn by the applicant that is a proper expense of the body corporate drawn to a third party. However, some of the cheques obviously relate to services provided by the applicant, and if those expenses have been properly authorised by the body corporate then Ms Mort should also sign those cheques.

Finally, I intend to order that the unpaid penalty in the amount of $112.50 shall be waived forthwith, as the applicant has not provided sufficient evidence that such a penalty was properly imposed in the first place. Ms Mort stated that she did not receive her contribution notice in time to make the payment by the due date, but that when she did receive it she made the payment into the body corporate account. In such a small scheme, and with only two owners, I consider that a late payment penalty which has been unresolved for four years should be waived, if only in the interests of moving forward.

I hope that in future the administration of the body corporate can proceed in an orderly fashion. As stated at the outset, no amount of adjudicator’s orders can resolve what appears to be an intractable clash of personalities between these two parties. The body corporate might be better advised to engage the services of a professional body corporate manager, which might lessen the level of disputation, and lead to improved communication through an objective third party. It would also facilitate proper compliance with the Act and the regulations.

Number of Scheme:	13331
Name of Scheme:	Kangaroo Court
Address of Scheme:	30 Leonard Avenue SURFERS PARADISE QLD 4217

Queensland Body Corporate and Community Management Commissioner - Adjudicators Orders

Kangaroo Court [2004] QBCCMCmr 419 (1 September 2004)