Kookaburra Park Eco Village [2005] QBCCMCmr 15 (12 January 2005)

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

I hereby order that if owners pass a resolution at the meeting of 15 January 2005 that involves expenditure but does not specify the amount of that expenditure then the body corporate must not incur any liability for expenditure on that project unless:

1. The anticipated expenditure for the project is less than the relevant limit for committee expenditure and the committee passes a resolution specifying the amount of expenditure that is authorised for the project; or
2. The body corporate in general meeting passes a resolution specifying the amount of expenditure that is authorised for the project.

I further order that if at the meeting of 15 January 2004 the preferred alternative for the first motion is to offer the slab hut to the Gin Gin Historical Society, then an ordinary resolution is sufficient for this motion to be passed provided that independent evidence of the value of the hut shows it to be $17,800 or less.

I further order that, at the next general meeting at which it is practicable (subsequent meeting), owners in general meeting must be given the opportunity to vote on a motion to the effect that future committee elections be held by open ballot. The ballot of 15 January 2004 is to be by open ballot but any ballots held after the subsequent meeting must be by secret ballot if owners have not passed a resolution that they be by open ballot.

STATEMENT OF ADJUDICATOR’S REASONS FOR DECISION - REF 0824-2004

"Kookaburra Park Eco Village" CTS 19671

Kookaburra Park Eco Village Community Titles Scheme (Kookaburra Park) is an 89 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 and final orders. Dennis Knable and Sharon van der Hoek, occupier and owner of lot 44 (applicants) are seeking orders against the body corporate (respondent). The body corporate has an extraordinary general meeting scheduled for 15 January 2004. The applicants claim that misleading information has been circulated by the committee in relation to this meeting and that the proper voting procedures for committee elections are not being followed. The applicants seek interim orders to stop voting from proceeding at the scheduled meeting of 15 January 2004.

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 that will effectively prevent an extraordinary general meeting of the body corporate from going ahead. 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 to the body corporate of stopping voting at the meeting against the inconvenience to the applicants of allowing the meeting to proceed and leaving the question of relief to a final determination.

The applicants appear genuinely concerned that the committee is not providing full information to owners about options that are being put before owners at the meeting. However, the evidence before me does not satisfy me that the committee has done anything unlawful that would justify stopping owners voting on the motions provided. The legislation allows for a person submitting a motion to provide explanatory material regarding the motion (Standard Module, 42C). In this case, the committee have submitted a number of motions and given their reasons for submitting those motions. Motions have also been submitted by other owners and the reasons of those owners have been published. There is no requirement that a person submitting a motion provide complete information or copies of every relevant document in their control.

If statements are misleading and voters are mislead by these statements then this may be sufficient grounds to overturn a resolution. However, to gain an interim order that stops a vote from proceeding, the applicants would need to establish at least a reasonable likelihood that owners will be misled in some significant respect. Owners have an opportunity to consider matters for themselves and seek further information. I have sought submissions from all owners and none of these submissions from other owners convince me that voting should be stopped. Rather, owners should be given the opportunity to make up their own minds regarding the issues.

The legislation limits the explanatory material that can accompany the voting paper (Standard Module, 42C). However, there is no reason why interested owners or committee members cannot distribute additional information at their own cost. In this instance, owners are aware that the issues in question are contentious and owners have an opportunity to seek further information if they desire before having to cast their vote. I am refraining from making any order to stop voting as the limited evidence before me does not satisfy me that there is a reasonable likelihood that owners will be misled in any significant respect. However, I have not had the opportunity to consider this issue with regard to the totality of the circumstances and my refusal to grant an order at this time should not prevent any subsequent application from owners who believe they were mislead in a significant respect and that their votes would have led to a different result at the meeting if they had not been mislead.

One of the applicants’ specific concerns is that a motion to repair the hut using volunteer labour is contrary to the Queensland Building Services Authority Act 1991 (QBSA Act). The applicants submit that work valued at over $1,100 requires a licence but the committee says that work by owners on their own land valued at less than $6,600 does not require a licence. This is not a matter which I have jurisdiction to determine. In any event, even if the motion were contrary to the QBSA Act, the motion should still be included on the voting paper (Standard Module, 45). If an owner thinks that the motion is unlawful or unenforceable for any reason then that owner should provide information to the chairperson to that effect. The chairperson would then be required to rule the motion out of order unless he was satisfied to the contrary (Standard Module, 47(1)). Owners can vote to overturn a decision of the chairperson regarding whether or not a motion should be ruled out of order (Standard Module, 47(3)).

If an owner thinks that the body corporate has passed a resolution that is contrary to law then that owner can take action in the relevant jurisdiction. However, there is no contravention of the Body Corporate and Community Management Act 1997 in this respect and I will refrain from making any order myself.

A number of motions on the voting paper propose a project but do not specifically authorise any expenditure to perform the project. The applicants make submissions to the effect that the failure to specify the expenditure is contrary to the legislation and that voting on those motions should be stopped. The committee has made submissions to the effect that the meeting is being held at the earliest time possible to resolve matters that have arisen and that the committee was unable to get quotations from a registered builder to include with the notice of meeting. The committee has also submitted that other motions regarding tenders were put forward at this meeting to avoid delays until May 2005 if further information regarding exact pricing was provided. One motion is claimed to have been submitted without pricing at this stage to give the committee the opportunity to accept a tender that will take advantage of machinery and contractors when they are expected to be at the scheme for other purposes.

Ordinarily, body corporate funds may only be spent when that spending is authorised by a resolution of the body corporate. To properly authorise the spending the resolution should specify the amount authorised to be spent or at least an upper limit. However, a motion to perform a particular project is not invalid simply because the spending for the project is not authorised in the same motion. If the motion to perform the project is passed then the committee could subsequently pass a resolution authorising the spending provided the required spending is below the relevant limit for committee spending (Act 100, Standard Module 26). If the project is likely to involve spending above the relevant limit for committee spending then the committee would need to put a further resolution before the owners in general meeting to obtain the spending authorisation before any expenditure on the project was incurred (Standard Module, 103).

I will therefore not make any order stopping voting on the motions concerned. However, it is unacceptable for body corporate funds to be spent without a formal resolution that authorises the amount of expenditure involved. I will therefore grant an order restraining the body corporate from engaging in unauthorised expenditure.

The first motion concerns a decision by the body corporate regarding what it should do with a slab hut that forms part of the common property. Mail sent to occupiers in the scheme was previously delivered to this hut but the hut was partially destroyed by fire.

The motion for dealing with the slab hut includes the alternatives of offering the remains of the hut to a historical society, seeking to have a registered builder supervise the restoration, or seeking to have the hut restored with volunteer labour.

The voting paper states that the resolution to offer the remains of the hut to a historical society needs to be passed by special resolution rather than ordinary resolution. The applicants say that this motion should only require an ordinary resolution to be passed. The committee have submitted that this hut is a significant asset to the scheme and therefore disposal of this asset requires a special resolution. The legislation provides that disposal of personal property must be authorised by special resolution if the market value of the asset corresponds to an amount exceeding $200 for each lot in the scheme. For a scheme the size of Kookaburra Park, this would be an amount in the order of $17,800 and it seems unlikely that a partially burnt hut would have a value in excess of this amount. However, it seems preferable to allow the vote to proceed and if this is the preferred alternative, and is passed only by ordinary rather than special resolution, then independent valuation evidence can be sought. If this evidence shows the hut to be worth $17,800 or less then the motion should be deemed to be passed. I will therefore make an order to this effect.

The applicants submit that voting for committee members should be by secret ballot.

A ballot for membership of the committee must be a secret ballot unless the body corporate passes an ordinary resolution that the election be by open ballot (Standard Module, 12). The committee have submitted that committee elections have always been by open ballot and that a motion at a general meeting on 23 January 2003 that sought to have voting by secret ballot was not carried. While that resolution indicates that the majority support open ballots, the default provision under the legislation is that elections are to be by secret ballot unless a resolution is passed to the contrary.

Therefore, there is a serious question to be determined regarding whether the committee elections should be by secret ballot or open ballot. However, some owners may already have cast their votes and it is therefore too late to appoint a returning officer to conduct a secret ballot. Given that all previous ballots have been open ballots and given the previous resolution indicated that the majority support open ballots, it does not appear just and equitable to prevent this particular ballot from proceeding. This ballot should therefore be valid even though it has been sent out as an open ballot.

However, I also consider it just and equitable to make an order that will ensure future ballots are held in full compliance with the legislation. I will therefore make an order requiring the body corporate to consider a motion, at the next general meeting at which it is practicable, to the effect that future ballots for committee elections be by open ballot. If this resolution is passed then future elections can be by open ballot. Otherwise, future elections must be by secret ballot and a returning officer will need to be appointed by the committee prior to the notice of meeting being sent out (Standard Module, 54).

For the above reasons, I make the orders outlined above.

In summary, it appears just and equitable to allow voting at the upcoming meeting to proceed with the issues raised by the applicants clarified by the orders above. While the applicants sought both interim and final orders, I consider that the applicants are only entitled to those orders above and that those orders dispose of both the interim and final applications.

However, this application did not provide an opportunity to consider the entire circumstances regarding allegations that owners may be materially misled by information provided in relation to the meeting. If owners subsequently provide evidence that they were materially misled, and that this affected the result of the vote, then they may wish to provide this office with the relevant evidence. I note that an application opposing a resolution must ordinarily be made within three months of the meeting being held (Act, 242).

Number of Scheme:	19671
Name of Scheme:	Kookaburra Park Eco Village
Address of Scheme:	M/S 368 GIN GIN QLD 4671

Queensland Body Corporate and Community Management Commissioner - Adjudicators Orders

Kookaburra Park Eco Village [2005] QBCCMCmr 15 (12 January 2005)