Sailfish Point [2004] QBCCMCmr 493 (19 October 2004)

Last Updated: 30 September 2005

REFERENCE: 0256-2004

ORDER OF AN ADJUDICATOR

MADE UNDER PART 9 OF CHAPTER 6

BODY CORPORATE AND COMMUNITY MANAGEMENT ACT 1997

Number of Scheme:	20973
Name of Scheme:	Sailfish Point
Address of Scheme:	300 Cottesloe Drive MERMAID WATERS QLD 4218

TAKE NOTICE that pursuant to an application made under the abovementioned Act by

Russell Martin Ellis, the owner of lot 32

I hereby order that the ruling of the chairperson at the AGM held on 25 March 2004 to the effect motion 17 was out of order, was invalid and of no effect. I further order that the body corporate shall include the motion and accompanying explanation on the agenda of the next general meeting of the body corporate, which motion should be determined by special resolution.

STATEMENT OF ADJUDICATOR’S REASONS FOR DECISION - REF 0256-2004

"Sailfish Point" CTS 20973

The applicant, Russell Martin Ellis, the owner of lot 32, has sought the following order of an adjudicator under the Body Corporate and Community Management Act 1997 (the Act) quote –

That my motion 17 on the AGM agenda be declared valid and that an EGM be held to allow the resolution to be reconsidered and / or the adjudication recommend to the body corporate that my motion be approved by the body corporate.

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)).

Whilst the application is unnecessarily complex in my view, the question to be determine is reasonably simple: whether the body corporate chairperson’s action of ruling the applicant’s submitted motion (motion 17 at the AGM of 25 March 2004) was invalid.

The essential facts are relatively simple:

• the applicant has made unauthorised improvements to common property for the benefit of his lot;
• The body corporate committee has issued a contravention notice, the covering letter for which set out 3 possible courses of action;
• The applicant subsequently submitted a motion and explanatory memoranda for inclusion on the agenda of the next general meeting seeking approval of the unauthorised improvement;
• The body corporate committee sought legal advice on the validity of the applicant’s motion. On my reading of the advice provided, it essentially concluded that the motion was valid, and that there were no grounds for the chairperson ruling the motion out of order. The advice did however express some concerns regarding what the writer considered somewhat misleading statements contained in the motion / explanatory memoranda accompanying it;
• At the AGM, the applicant’s motion was ruled out of order by the chairperson, in consequence of which the applicant has made application to this office in the terms set out above.

Section 45 of the accommodation module provides the power for the chairperson to rule a motion out of order. That section provides –

45 Power of person chairing meeting to rule motion out of order [SM, s 47]
(1) The person chairing a general meeting of the body corporate must rule a motion out of order if--
(a) the motion, if carried, would--
(i) conflict with the Act, this regulation or the by-laws, or a motion already voted on at the meeting; or
(ii) be unlawful or unenforceable for another reason; or
(b) except for a procedural motion for the conduct of the meeting, or a motion to correct minutes--the substance of the motion was not included in the agenda for the meeting.
(2) The person chairing the meeting must, when ruling a motion out of order--
(a) give reasons for the ruling; and
(b) for a ruling given under subsection (1)(a)--state how the ruling may be reversed by the persons present and entitled to vote on the issue.
(3) The persons present and entitled to vote may reverse a ruling given under subsection (1)(a) by passing an ordinary resolution disagreeing with the ruling.
(4) The reasons given by the person chairing the meeting for ruling a motion out of order must be recorded in the minutes of the meeting.

The applicant alleges that there is / was no valid basis on which the motion could be so ruled out of order. Briefly, the minutes of meeting set out the reasons the motion was ruled out of order including that:

• The motion was "a very contentious issue";
• Doubts "relating to the possible veracity of some of the statements in the preamble to the motion and in a separate letter ...";
• "Responsibility of the committee and myself to ensure that all owners are made aware of the facts";
• "... wording used in the motion is questionable";
• "... could be intimidation".
• "Because of the small number of votes cast, ie 34 the passing of this motion at this meeting could be unlawful or unenforceable and set a dangerous precedent for the body corporate".

At the outset, on the basis of the above stated reasons, I have very serious reservations concerning the validity of the chairperson’s ruling that the motion was out of order. In particular, the last of the reasons set out above. The relevance of this reason I do not understand. The number of votes cast is irrelevant to any determination of whether a motion is or can be ruled out of order. Moreover, many of the reasons given are subjective. These serious reservations as to the validity of the chairperson’s ruling are confirmed by certain of the contents of the subsequent submission of the committee in response to the application. In particular, I find statements in paragraphs 7, 8 and 10 of the committee submission to be reflective of an intention to rule the motion out of order in order to avoid certain outcomes for the committee should the motion in fact succeed. These statements include –

• ". ... It would therefore be inappropriate to allow one Owner ie. Mr Ellis to be given an approval for an existing structure without considering all structures." Para 7;
• "Any attempt by Mr Ellis to get an approval for his situation be either a motion at a general meeting or through a Dispute Application as currently before the Adjudicator would be unfair to most owners". Para 8;
• "Consequently the passing of the motion 17 as submitted by Mr Ellis to the AGM would likely cause a chain of events that could seriously disadvantage many other owners (present and future). ..." Para 8;
• The committee is anxious to ensure that all Owners be dealt with in the same way and that everything is done to rectify past errors and the resulting problems. ..." Para 10.

I conclude that the chairperson’s ruling of the applicant’s motion out of order was invalid. The ruling is a very transparent attempt, as evidenced in the above statements, to prevent the consideration by the body corporate in general meeting of a motion seeking approval of certain unauthorised improvements. I conclude that the committee took the view that if such a motion were to be considered, and was in fact, successful, that it would result in several disadvantages to the body corporate and owners generally. These are set out in para 8 of the committee submission. Moreover, the body corporate not only ruled the motion out of order, but before doing so, had certain members of the committee speak against aspects of the motion.

I conclude that there was no validity to the chairperson’s ruling of the motion out of order. I conclude that in so doing, the chairperson’s, and the committee’s motivation was to prevent the consideration of the motion in general meeting given the perceived consequences for the body corporate should it be approved. I consider that the chairperson’s and committee’s actions are quite blatant, particularly in view of the legal advice it received to the effect that there was no basis on which the motion might in fact be ruled out of order.

The order sought by the applicant was that his motion be "declared valid and that an EGM be held to allow the resolution to be reconsidered or the adjudication recommend to the body corporate that my motion be approved by the body corporate". I consider that the first alternative order sought is a fair and reasonable request in the circumstances. However, the later, that I recommend the approval of the motion, is not reasonable. The question to be determined by this application and that which I have determined is whether the ruling of the chairperson was invalid. It was not to determine whether or not the motion should in fact be approved. This is a matter for the body corporate in general meeting, by special resolution to determined. I have ordered accordingly.

Both parties have made allegations to the effect that the contents of the motion are biased in favour of the acceptance of the motion or conversely that the events which transpired have prejudiced the fair consideration of the motion. I consider that both parties are entitled to present their position in the best light. Moreover, the body corporate committee are at liberty to make a recommendation to the members of the body corporate in respect of the outcome of the motion. In doing so, both parties are at liberty to rebutt the material of the other. In the circumstances, I am not prepared to make a further finding to the effect that the events which transpired have prejudicated the fair consideration of the motion, or that the terms of the motion are biased in favour of the applicant.