La Porte D'Or [2004] QBCCMCmr 457 (24 September 2004)

Last Updated: 30 September 2005

REFERENCE: 0584-2004

INTERIM ORDER OF AN ADJUDICATOR

MADE UNDER PART 9 OF CHAPTER 6

BODY CORPORATE AND COMMUNITY MANAGEMENT ACT 1997

Number of Scheme:	12681
Name of Scheme:	La Porte D’Or
Address of Scheme:	3422 Gold Coast Highway Surfers Paradise, Queensland

TAKE NOTICE that pursuant to an application made under the abovementioned Act by Bernard Penhey, Chris Lecky, Iris Murray, Ritchie Gray and Julia Henderson (members of the Committee for the Body Corporate):

I hereby order that pending a final determination of this application, the Committee for the "La Porte D’Or" Body Corporate shall consist of the following members: Chairperson: Vito Giorgio Secretary: Coral Franke Treasurer (non-voting): Ritchie Gray Ordinary Members: Julia Henderson Chris Lecky Iris Murray Bernard Penhey

STATEMENT OF ADJUDICATOR’S REASONS FOR DECISION - REF 0584-2004

"La Porte D’Or" CTS 12681

1.	The application

On 20 September 2004, five committee members (the Applicants) filed a dispute resolution application with the Commissioner for Body Corporate and Community Management under the Body Corporate and Community Management Act 1997 (the Act).

The Applicants are seeking a final outcome that they be retained as committee members "as elected by majority at the last A.G.M".

The Applicants have also sought the following interim orders, quote:

•	(The Applicants) are retained on committee pending the outcome of this application.
•	The Chairman, Secretary & Manager be prohibited from installing new committee members; and
•	The secretary consult all committee members for the calling of regular meetings for the remainder of the year."

"La Porte D’Or" is a community titles scheme under the Act and the Act’s Body Corporate and Community Management (Standard Module) Regulation 1997 (the Standard Module). The scheme land consists of 181 lots and common property.

The Commissioner has recently referred the application to me under section 247 of the Act to consider whether the nature or urgency of the circumstances of the application warrant an interim order being issued. As permitted by section 247(3) of the Act the Commissioner referred the application to me even though proper notice of the application had not been given and affected persons had not be given an opportunity to make submissions.

On 24 September 2004, I conducted a teleconference with two of the Applicants (Mr Penhey and Mr Gray), the Body Corporate Secretary (Ms Franke) and the Body Corporate Manager (Mr Dring) to discuss the application for an interim order.

2.	Jurisdiction

Section 227 of the Act limits the types of disputes that may be resolved under the Act’s dispute resolution provisions to those between particular combinations of people involved in community titles schemes. This application concerns a dispute between a number of committee members and the remainder the committee. As a result, the matter appears to be a "dispute" within the meaning of section 227(1)(h) of the Act.

Section 276(1) of the Act authorises adjudicators to make just and equitable orders to resolve disputes in community titles schemes, about-

(a)	claimed or anticipated contraventions of the Act or a scheme’s community management statement; or
(b)	the exercise of rights or powers, or the performance of duties, under the Act or a scheme’s community management statement; or
(c)	claimed or anticipated contractual matters about the engagement of a person as a body corporate manager or service contractor for a scheme, or the authorisation of a person as a letting agent for a scheme.

This application describes a dispute about composition of a body corporate committee, particularly considering the effect of section 25(2)(d) of the Standard Module which provides that a committee member’s position becomes vacant, if the member "is not present personally or by proxy at 2 consecutive meetings of the committee without the committee’s leave".

It appears to me that the dispute is one that falls within the jurisdiction of an adjudicator.

3.	Background to the application

In the supporting grounds to the application, the Applicants indicate that on a number of occasions they have requested the Secretary to refrain from calling committee meetings during normal business hours. The Applicants state that work commitments impact on their ability to attend committee meetings during these times.

It is apparent that the Secretary called a committee meeting for 9:30am on Wednesday 25 August 2004. However, the meeting could not proceed due to lack of a quorum.

The Secretary subsequently called a further committee meeting for 9:30 am on Thursday 2 September 2004. Again, the meeting failed to achieve a quorum and could not proceed.

I have before me a copy of a letter dated 10 September 2004 sent to one of the Applicants (Mr Penhey) by the Body Corporate Manager (Mr Dring). In the letter, Mr Dring points out that Mr Penhey was not present personally or by proxy at the committee meetings scheduled for 25 August 2004 and 2 September 2004. Mr Dring then states that as a result (and by virtue of section 25 of the Standard Module), Mr Penhey’s position has become vacant. I understand that committee members Chris Lecky and Iris Murray received similar letters.

In our teleconference, Mr Dring also explained that on 2 September 2004, Mr Doug Kupsch was appointed as a committee member.

The Applicants consider that it is unreasonable for their positions to become vacant in the circumstances, particularly because of their claim that the Secretary had been requested not to call committee meetings during business hours.

I understand that the Body Corporate Manager and Secretary both consider that the Secretary has discretion to decide on the times of committee meetings, and that section 25(2)(d) has the effect that the committee positions of members Penhey, Lecky and Murray automatically became vacant when they failed to attend the two consecutive committee meetings.

4.	Interim order

At this time, I am solely concerned with the application for an interim order. I do not intend to make any final findings regarding the issues raised in the application, particularly given that I am not satisfied that the Secretary, Chairperson and Body Corporate Manager have had a proper opportunity to consider or respond to the application.

Section 279(1) of the Act allows an adjudicator to issue an interim order "if satisfied, on reasonable grounds, that an interim order is necessary because of the nature or urgency of the circumstances to which the application relates".

Committees play a vital role in the ongoing administration of bodies corporate. It seems to me that uncertainty about the membership of a committee (even simply pending a final determination of a dispute resolution application about committee membership) has the potential to substantially disrupt and undermine the proper administration of a body corporate. I think this is particularly the case in a large scheme, such as "La Porte D’Or".

For these reasons, I am satisfied that the nature and urgency of the circumstances of this application warrant the matter being considered for an interim order. Furthermore, I consider that it is reasonable and necessary for me to issue an interim order clarifying membership of the committee at least pending a final determination of this application.

I do not intend to make any final determination of issues raised by this application. Notwithstanding the teleconference of 24 September 2004, I am not satisfied that affected parties have had a proper opportunity to consider and respond to the application prior to my consideration of this interim order. I am only proceeding with the determination of the application for an interim order because I consider that certainty in committee membership is a vital issue for the Body Corporate.

However, without making any final findings on the issues in dispute, I do consider that the Applicants have raised some significant arguments.

I entirely accept that the Standard Module provides that a committee member’s position becomes vacant if the member is absent from two consecutive meetings of the committee, without the leave of the committee. It seems to me that the inclusion of this provision is recognition of the importance of body corporate committees, and is intended to encourage members of committees to fully participate in the decision making and functioning of their committee.

I also accept that unlike general meetings, the Standard Module does not fetter a secretary’s authority to call a committee meeting by requiring the committee to authorise the calling of the meeting.

However, it would also seem appropriate and reasonable for committee members to have some degree of input into the timing of committee meetings. While not always possible, it is preferable for committee meetings to be held at times when most if not all committee members are able to attend. While on occasions their request may not be able to be granted, I am not convinced that the Applicants have acted unreasonably by requesting that committee meetings be held outside of normal business hours.

While I cannot make any substantial comments at this time, it may also be necessary to consider whether committee members have unreasonably withheld "leave" from other members for the committee meetings in questions. I would think that committees should reasonably consider the fact that their members may simply be unable to put aside work commitments to attend a committee meeting at a particular time. However, whether this occurred in this instance is a matter that may be considered in a final determination.

In terms of deciding this application for an interim order, I am satisfied that the Applicants have raised a serious matter which warrants determination in a final order.

Turning to interim relief, I note that in many instances, adjudicators issue interim orders to maintain the status quo of a situation pending the final determination of an application. If I understood him correctly, in our teleconference Mr Dring expressed the view that to maintain the status quo in this instance, I should issue an interim order that those three members whose positions have been purportedly vacated are excluded from the Committee (at least pending a final determination of the application). Mr Dring suggested that in the interim, the Committee should either consist of the remaining four members from the pre-2 September 2004 committee or those four members plus Mr Kupsch. Mr Dring supported this proposal by arguing that the meaning of section 25(2)(d) of the Standard Module is plain and has the effect that the positions in question have been vacated. Mr Dring argued that it was preferable for the interim order to recognise and put into effect, the plain meaning of section 25(2)(d)

I think that there is some merit in this argument, and of course, interim orders should reflect the provisions of the legislation. However, for the reasons outlined above, I am not entirely convinced at this interim stage that section 25(2)(d) has been applied correctly and reasonably in this instance.

I also give significant weight to the fact that at the last annual general meeting, the lot owners voted and decided as a Body Corporate that the three committee members whose positions have now been purportedly vacated should represent the interests of the Body Corporate as committee members.

It seems to me that on balance, it would be preferable for the Applicants to continue in their role as committee members pending a final determination of this application. I cannot put aside the fact that these members were duly elected by owners at a general meeting. I am not convinced that it is in the interests of the Body Corporate for new committee members to be appointed in place of those members at this time. As a result, I have issued an interim order that pending a final determination of the application, the Committee is made up of the following members:

Chairperson:	Vito Giorgio
Secretary:	Coral Franke
Treasurer (non-voting):	Ritchie Gray
Ordinary Members:	Julia Henderson
	Chris Lecky
	Iris Murray
	Bernard Penhey

I do consider that there is good reason to finally resolve this application as promptly as possible. As a result, I will endeavour to make a final determination shortly after the period allowed for submissions and replies to submissions.