Waterfront Place - Noosa [2005] QBCCMCmr 201 (14 April 2005)

Last Updated: 5 July 2005

REFERENCE: 0833-2004

ORDER OF AN ADJUDICATOR

MADE UNDER PART 9 OF CHAPTER 6

BODY CORPORATE AND COMMUNITY MANAGEMENT ACT 1997

Number of Scheme:	3592
Name of Scheme:	Waterfront Place - Noosa
Address of Scheme:	255 Gympie Terrace NOOSAVILLE QLD 4567

TAKE NOTICE that pursuant to an application made under the abovementioned Act by Samuel and Amanda Di Rosa, the co-owners of Lot 3

I hereby order that the election of the committee at the Annual General Meeting dated 22 October 2004 is invalid. I further order that, from the date of this order, the positions of secretary and treasurer of the body corporate are jointly held by the following individuals: 1. Mr Samuel Di Rosa as the nominee of the owner of Lot 3; and 2. Mr Edward John Aitken as the nominee of Gympie Tee Pty Ltd, the owner of Lots 1, 2, 4 and 5. I further order that the application for an order that resolution 12 of the Annual General Meeting dated 22 October 2004 be declared invalid, is dismissed.

STATEMENT OF ADJUDICATOR’S REASONS FOR DECISION - REF 0833-2004

"Waterfront Place - Noosa" CTS 3592

APPLICATION

This application is by Samuel and Amanda Di Rosa, the co-owners of Lot 3 (applicants) against the body corporate (respondent). The applicants are seeking the following outcomes, quote:

1.

An order that the election of the secretary and treasurer at the annual general meeting held on 22 October 2004 be declared invalid and that in accordance with section 12(4)(a) of the Body Corporate and Community Management (Small Schemes Module) Regulation 1997 that Mr Samuel Di Rosa and Ed Aitken (or Mrs Yvonne Stewart) be declared as the joint secretary and treasurer of the Body Corporate.

2.

An order that resolution 12 of the annual general meeting held on 22 October 2004 be declared invalid and that in accordance with section 100(3) of the Body Corporate and Community Management (Small Schemes Module) Regulation 1997 that the seal of the body corporate be affixed to all documents (apart from the section 205 certificate which may be signed by the body corporate manager) by either of Mr Samuel Di Rosa or Mrs Amanda Di Rosa on the one part and either or Mr Ed Aitken or Mrs Yvonne Stewart on the other part.

The applicants main submissions were to the effect that:

• When the election was conducted, they were informed that Mrs Yvonne Stewart was the owner of Lot 5 and therefore entitled to be on the committee. A search of the land titles register with the Department of Natural Resources and Mines indicated that Gympie Tee Pty Ltd was the owner of the lot. Therefore, as there are two owners in the scheme, section 12(4) of the Body Corporate and Community Management (Small Schemes Module) Regulation 1997 applies and the election of the secretary and treasurer was invalid.
• Motion 12 is invalid given the provisions of sections 12(4)(a) and 100(3) of the Body Corporate and Community Management (Small Schemes Module) Regulation 1997 as there is no chairperson of the body corporate.

JURISDICTION

"Waterfront Place – Noosa" Community Titles Scheme 3592 is a 5 lot scheme under the Body Corporate and Community Management Act 1997 (Act) and the Body Corporate and Community Management (Small Schemes Module) Regulation 1997 (Small Schemes Module).

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)).

SUBMISSIONS

In accordance with the Act, submissions were called and a copy of the application was provided to Gympie Tee Pty Ltd and the body corporate manager.

A submission was received from the McKenzie Lawyers on behalf of Gympie Tee Pty Ltd to the effect that:

• Gympie Tee Pty Ltd is the owner of Lots 1, 2, 4 and 5 and the applicants own Lot 3. At no time did Yvonne Stewart state nor was it represented to the Annual General Meeting that Mrs Stewart was the owner of Lot 5.
• The body corporate received only 2 written nominations for the election of the committee with both being from Gympie Tee Pty Ltd nominating Edward J Aitken as secretary and Yvonne F Stewart as treasurer. The copy of the written nomination for treasurer dated 12 October 2004 names Yvonne Stewart as the person being nominated as the owner of a lot. The form is signed by Yvonne Stewart as the representative of the lot owner. The same details have been recorded on the form nominating Edward Aitken as secretary.
• Section 12 of the Small Schemes Module does not provide for the format or contents of a written nomination.
• No other nominations for the committee positions were received either in writing or verbally.
• As the applicants were unfinancial at the time of the Annual General Meeting, they could not hold a committee position due to the provisions of section 30(11) of the Small Schemes Module.

The applicants responded to the submission from Gympie Tee Pty Ltd under section 244 of the Act to the effect that:

• They were financial at the time of the Annual General Meeting and there was no mention made, or indication given at the meeting to this effect.
• As section 12(2) of the Small Schemes Module applies, the nomination and election requirements of the Module are not applicable.
• The applicants did advise the meeting that they were entitled to be on the committee under section 12.

DETERMINATION

Election of secretary and treasurer at the Annual General Meeting dated 22 October 2004

The minutes of the Annual General Meeting (AGM) dated 22 October 2004 state, quote:

RESOLVED that elections be confirmed as follows:

SECRETARY: Mr E Aitken

TREASURER: Ms Y Stewart

The applicants contend that nomination and election procedures adopted at the AGM are not relevant as section 12(2) of the Small Schemes Module applies given that the lots in the scheme are in 2 different ownerships. The applicants’ have stated that they were denied a right to be on the committee because they were informed that there were 3 different owners, with Ms Stewart owning Lot 5. Gympie Tee Pty Ltd nominated Mr Aitken and Ms Stewart, and have submitted that they were the only persons nominated for election to the committee. Gympie Tee Pty Ltd have further submitted that the applicants, as the owners of Lot 3 were unfinancial at the time of the AGM and could not hold a committee position.

The applicants have relied on the applicability of section 12(2) of the Small Schemes Module to the determination of the committee for the body corporate. Section 12(2) applies if when an annual general meeting is held, all the lots in the scheme are either in identical ownership, or there are only 2 different ownerships. If section 12(2) does apply when an annual general meeting is held, the committee for the body corporate is determined in accordance with section 12(4) of the Small Schemes Module.

The applicants own Lot 3 and have claimed that Gympie Tee Pty Ltd own the other 4 lots in the scheme despite a statement at the AGM that Ms Stewart is the owner of Lot 5. Gympie Tee Pty Ltd has submitted that it is the owner of Lots 1, 2, 4 and 5. Further, it has been submitted that at no time did Yvonne Stewart state nor was it represented to the AGM that Mrs Stewart was the owner of Lot 5. Therefore, it is clear that all lots the scheme are in 2 different ownerships with Gympie Tee Pty Ltd owning 4 lots and the applicants 1 lot.

Given these circumstances, it is clear that section 12(2)(d) applied at the time of the AGM. Consequently, the committee must consist of the individual or individuals specified by section 12(4) which states, quote:

(4) If subsection (2)(b) or (d) applies--
(a) the committee consists of 2 individuals who are owners, or the nominees of owners, of lots, and they must decide between themselves who are to hold the positions of secretary and treasurer (and, if they cannot agree, each of the positions of secretary and treasurer are jointly held by both of them); or
(b) the committee consists of 1 of the 2 individuals mentioned in paragraph (a), chosen by agreement between the 2 individuals.

The options in section 12(4) for committee composition are:

1.	The committee consists of both lot owners or their nominees in the event that they decide between themselves who will hold the position of secretary and the position of treasurer.
2.	The committee consists of both lot owners or their nominees and the positions are held jointly in the event that it cannot be agreed who will hold each position.
3.	One owner or their nominee can hold the positions of secretary and treasurer if this is agreed by both individuals.

The election of the committee was based on the nominations from Gympie Tee Pty Ltd. Gympie Tee Pty Ltd have submitted that the applicants did not nominate for election, and as the applicants owed a contribution or other amount to the body corporate at the time of the AGM, the applicants could not have held a committee position.

The financial status of a lot owner is only relevant for determining the committee under the Small Schemes Module to restrict an owner’s right to participate in the choosing of a committee member. As the committee for this body corporate is not chosen under section 12(1), the limitation stated in section 30(11) is not applicable. Further, the nominations made by a lot owner are immaterial unless made in accordance with section 12(4). Both individuals elected to the committee are representatives of Gympie Tee Pty Ltd. Neither individual is a nominee of the applicants, and it is clear that the applicants have not agreed to this composition of the committee. Therefore, the election of the committee at the AGM has not been in accordance with section 12(4). Whilst section 12(4) is applicable, the composition of the committee must be agreed by the lot owners or their nominees. It is obvious that no such agreement has been reached.

For these reasons, I have ordered that the election of the committee at the AGM is invalid. As the ownership of lots in the scheme have not changed since the AGM, I have ordered that the positions of secretary and treasurer of the committee will be held jointly by Mr Samuel Di Rosa (the nominee of the owner of Lot 3) and by a nominee of Gympie Tee Pty Ltd. I have determined the nominee of Gympie Tee Pty Ltd to be Edward John Aitken as he is the present secretary of the body corporate, and is the sole Director and Secretary of that company. If Mr Aitken does not wish to be the nominee, it will be a matter for the corporate owner to decide who will be its nominee and advise the body corporate accordingly.

That resolution 12 of the annual general meeting held on 22 October 2004 be declared invalid

The minutes record that motion 12 was proposed by Mr Aitken and seconded by Mr Di Rosa and was determined by ordinary resolution with 5 votes recorded in favour of the motion. The motion stated, quote:

THAT the seal be left in the custody of the Body Corporate Administrator/Manager; and

THAT the use of the seal be as follows:

i) By the Secretary or Body Corporate Manager alone: on completion of the Body Corporate Information Certificates given under Section 205(4) of the Act.
ii) By the Secretary and Chairman of the Body Corporate or any other way authorised by law on documents as authorised from time to time in general meeting of the Body Corporate and pursuant to provisions of the Act.

Section 100 of the Small Schemes Module makes provision for the body corporate seal and states:

100 Body corporate’s seal [SM, s 139]
(1) The body corporate’s seal must be kept in the custody directed by the body corporate by ordinary resolution.
(2) The body corporate’s seal may be used only as directed or authorised by ordinary resolution.
(3) However, if the body corporate has not resolved how the seal is to be used, the seal may be attached to a document in the presence of the secretary or treasurer and at least one other person.
(4) The other person mentioned in subsection (3) must be a member, or the representative of a member, of the body corporate.
(5) If other members, or representatives of members, of the body corporate are present when the seal is used, the other members or representatives must sign the document as witnesses to the sealing of the document.

Motion 12 provides a direction as to custody of the seal as provided in section 100(1) and determines the use of the seal as permitted by section 100(2). While there is disagreement concerning the seconding of the motion and the vote on the motion, I do not consider that these factors are significant in the determination of this outcome.

The motion does incorrectly make reference to the "Chairman of the Body Corporate" which is a basis for the claim to invalidate this motion. In my view, this is not a sufficient basis to invalidate the motion. While a chairperson is not chosen as a member of the committee under the Small Schemes Module, the applicants have not provided any arguments that there has been some fundamental disadvantage to the owners as a consequence of the inclusion of the reference to Chairman in the motion or that this reference in the motion has led to actions contrary to the legislation, for example, a person has relied on the reference to use the seal as the body corporate chairperson. The motion has established rules in relation to the custody and use of the seal by the body corporate manager. In my view, these parts of the decision should not be affected by what I consider to be an error which is a lesser irregularity. In addition, as a consequence of my order on the composition of the committee, the position of secretary is held jointly by Mr Di Rosa and Mr Aitken. While this arrangement exists, the seal is used as secretary by both parties jointly. As I consider that the motion should be preserved, I have ordered that this outcome sought is dismissed.