Rene Place [2004] QBCCMCmr 519 (29 October 2004)

Last Updated: 30 September 2005

REFERENCE: 0194-2004

ORDER OF AN ADJUDICATOR

MADE UNDER PART 9 OF CHAPTER 6

BODY CORPORATE AND COMMUNITY MANAGEMENT ACT 1997

Number of Scheme:	15788
Name of Scheme:	Rene Place
Address of Scheme:	54 Rene Place NOOSAVILLE QLD 4566

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

David Waller, the co-owner of lot 2

I hereby order that the application by David Waller, the co-owner of lot 2, for several orders, quote – 1. That the AGM allegedly held on the 18th October 2003 be declared invalid in that it does not comply with the Body Corporate and Community Management Act 1997 (the Act); 2. That the motions that were allegedly passed at that AGM be declared invalid as they were not set out in the meeting notice of the meeting and in my opinion do not comply with the Act; 3. That the financial report for that meeting be declared invalid as they were not sent out with the meeting notice and does not comply with the requirements of the Act; 4. That the motions added to the voting paper for which no notice was given be declared invalid as they do not comply with the Act; 5. That the commissioner appoint a properly qualified and experienced person to assume the role of Body Corporate Manager for the Rene Place Body Corporate; 6. I also wish to have an administrator appointed to the scheme and this person is Mr Dan Philpot of ProActive Body Corporate Services is dismissed.

STATEMENT OF ADJUDICATOR’S REASONS FOR DECISION - REF 0194-2004

"Rene Place" CTS 15788

The applicant, David Waller, the co-owner of lot 2, has sought the following order of an adjudicator under the Body Corporate and Community Management Act 1997 (the Act) quote –

1. That the AGM allegedly held on the 18^th October 2003 be declared invalid in that it does not comply with the Body Corporate and Community Management Act 1997 (the Act);
2. That the motions that were allegedly passed at that AGM be declared invalid as they were not set out in the meeting notice of the meeting and in my opinion do not comply with the Act;
3. That the financial report for that meeting be declared invalid as they were not sent out with the meeting notice and does not comply with the requirements of the Act;
4. That the motions added to the voting paper for which no notice was given be declared invalid as they do not comply with the Act;
5. That the commissioner appoint a properly qualified and experienced person to assume the role of Body Corporate Manager for the Rene Place Body Corporate;
6. I also wish to have an administrator appointed to the scheme and this person is Mr Dan Philpot of ProActive Body Corporate Services.

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 is a subdivision of 7 lots recorded under a building unit plan (now a building format plan). The regulation motion applying to the scheme is the standard module.

The applicant’s grounds are set out in the following statement –

I enclose herewith a copy of the voting paper for matters to be considered at the AGM held on the 18^th October 2003 and enclose also the minutes of that AGM which I have just received. You will note that there is no correlation between the minutes of the meeting and the meeting notice as originally sent out. Also the financial statement that I received only after the meeting notice was sent out in my opinion does not comply with the requirements of the Body Corporate and Community Management Act 1997.

I am in a dilemma in that from my understanding of what the requirements are under the standard module, there is little or no relationship to the way the Body Corporate is being managed the Rene Place Body Corporate.

The applicant has included a copy of the notice of meeting, and the minutes of that meeting.

This office sought submissions in respect of the application from the committee and all owners. A submission was received from a Richard Anderson expressed to be on behalf of the body corporate. It is signed by the owners of all lots excepting the applicant’s lot 2. This submission is more informative of the circumstances affecting this body corporate than the applicant’s grounds. The submission states that at the AGM in 2003, the applicant sought that the body corporate engage the services of Mr Dan Philpot, a professional body corporate manager. The submission states that "the owners listened to the argument, analysed the costs ... . the matter of employing a professional body corporate manager was discussed under "Any other business" and after some discussion it was decided that Mr Philpot was much too expensive for us. ...". The submission continues –

So far the executive of the body corporate have organised and paid for any necessary maintenance, paid electricity bills, council rates, insurance, and looked after the interests of the owners. After the previous AGM we can see that there is room for improvement, and are working on that. ...

In respect of voting at the meeting, I note that the submission states that "such matters as pertained to the running of the body corporate were discussed and actions agreed without dissent from those present. All motions passed at the AGM were thus passed by 7 votes in favour".

The applicant has replied to the body corporate submission stating "it is apparent that none of the owners have any appreciation of the requirements of (the Act) and various modules. My concern is that the records of the Rene Place Body Corporate do not meet any of the requirements of (the Act)". The applicant then asks that this office inspect the records of the body corporate.

The first matter to be considered is compliance with section 242 of the Act headed time limitation on certain applications which 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.

Clearly this section applies to the application, as the application seeks to declare invalid the 2003 AGM. The date of the AGM was 18 October 2003, and the application was received by this office on 26 March 2004. This is in excess of 5 months after the meeting. The section requires that the application must be made within three months unless I am satisfied that there is "good reason to waive the non-compliance". The applicant has provided a somewhat lengthy statement as to the reasons for his apparent delay including that the minutes were not forwarded promptly, that he thereafter "raised my concerns" regarding certain matters, and further that he in fact posted an application to an incorrect address on 20 January, before waiting another 8 weeks almost before making the current application.

I do not consider these reasons for delay to be compelling.

I am cognisant of certain realities within this body corporate. Firstly that it is a small body corporate which too date has been managed or operated relatively informally. However, nothing the applicant has alleged suggests to me that this has lead to any significant detriment or loss of rights on his part or that of any other owner. He has not alleged a lack of maintenance of common property, nor a loss of voting rights or entitlement, or a misuse of funds or any other matter which might raise significant concern.

Further, I am aware that the applicant is in a minority of one, with his application being opposed by the owners of all other lots. This means that the majority of owners are currently satisfied with the operation of the body corporate. Moreover, I consider that owners have considered the appointment of a body corporate manager and elected not to. The effect of this application, if successful, would be to impose body corporate management, and additional costs on an unwilling majority of owners. This to me would not reflect good practice.

I acknowledge that the current management of the body corporate is not strictly in compliance with the requirements of the Act and applicable regulation module. I consider that the body corporate will need to take significant steps to remedy this, and to comply with legislative requirements to a much greater extent in the future. The additional requirements are numerous, and cannot be explained in the course of an order but for example, to mention but a few –

• Owners should be given at least 21 days notice of meeting;
• Owners should be provided with a notice of meeting including an agenda and voting paper, and informed of their right to vote either in person, by proxy or by voting paper;
• The agenda of the AGM must include certain mandatory motions (for example, to renew insurances);
• The election for committee must be held based on nominations received and not simply by confirming the incumbents in the positions they previously held.

The applicant is correct that the minutes do not appear to reflect the previously notified agenda. I suggest that the agenda reflected a better level of compliance with the legislation than the minutes do.

I consider that the orders sought by the applicant are more than what is required for this body corporate at this time. I consider that the underlying intent of the orders sought is to install a body corporate manager. It is not a requirement of the legislation that bodies corporate be professionally managed, or that a manager be appointed. I believe that the appointment of a manager is, except in extreme cases, a matter for the approval of the majority of owners in general meeting.

Whilst I am not prepared to order in terms as sought by the applicant, I do counsel this body corporate to make much greater endeavours to know, understand and comply with the legislation. If the body corporate cannot in the future increase its level of compliance to a significantly greater level than at present, then it may in fact become necessary to appoint an administrator notwithstanding that this is (currently) against the wishes of a majority of owners.