La Porte D'Or [2004] QBCCMCmr 531 (3 November 2004)

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

I hereby order that, pending a final determination, the body corporate is to refrain from implementing any of the resolutions passed at the committee meeting of 2 September 2004, except where implementation of a resolution has commenced and it is unreasonable to cease or delay further implementation of that resolution.

This order only prevents the body corporate implementing the resolutions passed at the committee meeting of 2 September 2004. It does not prevent the committee passing resolutions to the same effect at a subsequent committee meeting and implementing those resolutions.

This is an interim order and will remain in effect for a period of not longer than one year. It is the responsibility of the applicants to apply to extend this order if no final determination has been made within that period. This order will automatically lapse upon a final order being made or this application being withdrawn.

STATEMENT OF ADJUDICATOR’S REASONS FOR DECISION - REF 0597-2004

"La Porte D’Or" CTS 12681

La Porte D’Or Community Titles Scheme (La Porte D’Or) is a 181 lot scheme under the Body Corporate and Community Management Act (Act) and the Act’s Standard Module Regulation (Standard Module).

This is an application for interim orders. It arises out of an application by Bernard Penhey, Chris Lecky, Iris Murray, Ritchie Gray and Julia Henderson, owners and members of the Committee for the Body Corporate (applicants), seeking orders against the body corporate for La Porte D’Or (respondent).

In a previous application (the previous application),^[1] the applicants obtained an interim order as follows:

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

This order was granted after a dispute over whether committee members’ positions were vacated through their failure to attend two consecutive committee meetings.

The background to this dispute was that the applicants claimed that some of them requested the secretary not call committee meetings within normal working hours but these requests were ignored. Minutes of meeting reflect that the secretary called a committee meeting for 9.30am on Wednesday 25 August 2004. The applicants did not attend this meeting and no quorum was present. The secretary then called another meeting for 9.30am on Thursday 2 September 2004. Again, the minutes reflect that the applicants did not attend this meeting. However, the minutes state that the chairperson declared three of the absentee committee positions vacant as a result of those committee members failing to attend two consecutive committee meetings without the committee’s leave. The meeting then purported to appoint Daryl Kupsch to one of the vacated positions and to continue with the agenda items.

The previous application challenged the validity of the decision to declare the committee positions vacant and appoint Daryl Kupsch. This present application challenges the validity of other matters recorded as being decided by the committee on 2 September 2004. These include resolutions purporting to authorise spending on ventilation duct services, air conditioning plant, lift servicing and balustrade repairs.

The applicants seek interim orders to put all resolutions made at the meeting of 2 September 2004 on hold for the time being. The final orders sought are that these resolutions be declared invalid.

The applicants have provided submissions to the effect that the 2 September 2004 meeting was invalid as no quorum was present. They express concern at the spending of body corporate funds without approval from the majority of members of the committee.

The chairperson has provided submissions in response. These submissions are that, after vacation of the three positions, the committee consisted only of three voting members. Alternatively, the committee consisted of four voting members if the new member was considered, although his position could not be confirmed until the expiration of seven days after the circulation of the minutes. If the committee contains only three or four voting members then two members constitute a quorum.

Further, the chairperson submitted that the applicants have attempted to validate an illegal flying minute dated 29 September 2004, including expenditure of approximately $7,000 on furniture for the foyer.

An interim order will not be granted unless is it necessary due to the nature or urgency of the circumstances to which the application relates (Act, 279). Further, any orders granted must be just and equitable in the circumstances (Act, 276).

The applicants are seeking orders of an injunctive nature designed to stop any further implantation of resolutions made at a meeting of 2 September 2004, pending a final determination regarding whether those resolutions were properly made. For it to be just and equitable to grant relief at this stage, before full and final consideration of all the issues raised, I would need to be satisfied that the application raises a serious question to be determined. I would also need to be satisfied that the balance of convenience between the parties justifies the grant of injunctive relief. That is, I would need to balance the inconvenience of allowing the resolutions to be enacted if they are ultimately shown to be invalid against the inconvenience of putting the resolutions on hold if they are ultimately shown to be valid.

I am satisfied that there is a serious question to be determined. In particular there are serious questions about the validity of the decision to refuse to grant leave of absence to three of the committee members and declare their positions vacant. Firstly, whether the failure of these members to attend the meeting room on 25 August 2004 was a failure to attend a "meeting" given no quorum was present and that meeting did not proceed. Secondly, whether a quorum existed at the meeting of 2 September 2004 at the time that the chairperson refused to grant leave of absence to these members and declared their positions vacant.

The chairperson is correct in submitting that two voting committee members constitute a quorum if the committee only contains three or four voting members (Standard Module, 32). However, the applicants allege that the committee still consists of six voting members and one non-voting member. If so, a quorum would only be constituted if three voting members were at the meeting.

The chairperson has also submitted that the applicants have improperly attempted to validate an illegal flying minute. This appears to be a matter for a separate application if necessary. It does not alter my conclusion that there is a serious question to be determined in relation to the present application.

The applicants have established that there are serious question to be determined regarding the validity of the meeting of 2 September 2004. However, to gain an interim order the applicants will also need to establish that the balance of convenience favours placing resolutions made at that meeting on hold for the time being.

I am satisfied that the balance of convenience generally favours placing the resolutions on hold. If the resolutions are enacted now then it will be difficult to attempt to reverse those resolutions if they are ultimately declared invalid. On the other hand, La Porte D’Or has had the benefit of an interim order on the previous application that declares the committee membership pending a final determination of that application. If it is convenient for La Porte D’Or that matters in contention at the meeting of 2 September 2004 be decided prior to a final determination of this office then it is a relatively simple matter to just call another committee meeting and put the matter to another vote. This order will only prohibit the body corporate acting on the resolutions made at the meeting of 2 September 2004 and will not place any bar on the same, or similar, resolutions being passed at a subsequent committee meeting.

Some difficulties may occur if the body corporate has already partially enacted some of the decisions made at the meeting of 2 September 2004 and an order is granted that prevents the body corporate taking any further steps to enact those resolutions. For example, if faulty balustrades are currently being worked upon it may be unsafe to stop this work immediately. I therefore propose to order that the body corporate is to refrain from implementing any of the resolutions passed at the committee meetings of 2 September 2004 except where implementation of a resolution has commenced and it is unreasonable to cease or delay further implementation of that resolution.

For example, if repairs to the balustrades are urgent but have not yet been arranged then the body corporate must not act on the 2 September 2004 resolution to arrange those repairs but should call another committee meeting to determine what should be done regarding balustrade repairs. On the other hand, if repairs have already commenced and it would be unsafe to cease those repairs then this order will not prevent the body corporate continuing to instruct tradespersons to complete those repairs.

For these reasons, I make the interim order above.

The application will be allowed to proceed to submissions and a final determination in the normal course.

Number of Scheme:	12681
Name of Scheme:	La Porte D’Or
Address of Scheme:	3422 Gold Coast Highway SURFERS PARADISE QLD 4217

Queensland Body Corporate and Community Management Commissioner - Adjudicators Orders

La Porte D'Or [2004] QBCCMCmr 531 (3 November 2004)