San Sousi [2005] QBCCMCmr 268 (19 May 2005)

Number of Scheme:	31425
Name of Scheme:	San Sousi
Address of Scheme:	117 Shore Street North Cleveland Qld 4163

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

I hereby order that the two general meetings purported held by the body corporate of Sans Sousi on:

1. 3^rd February 2005; and
2. 22 April 2005,

are invalid and of no effect.

I further order that all resolutions purportedly carried at the two invalidated meetings are invalid and of not effect, and shall not be implemented or otherwise carried into effect.

STATEMENT OF ADJUDICATOR’S REASONS FOR DECISION - REF 0297-2005

"San Sousi" CTS 31425

The applicant, Geoffrey Elliott, the co-owner of lot 3 has sought the following order of an adjudicator under the Body Corporate and Community Management Act 1997 (the Act) quote:

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

(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)). Section 279(1) of the Act provides that an adjudicator can make an interim order if satisfied, on reasonable grounds, that an interim order is necessary because of the nature or urgency of the circumstances to which the application relates.

The scheme is a subdivision of 4 lots. The regulation module applying to the scheme is the standard module.

The applicant alleges that both meetings of the body corporate held on 3 February 2005 and the postal EGM of 22 April 2005 are invalid. The applicant’s principal basis for alleging this is a lack of proper meeting notice, in particular the notice time period. In his grounds the applicant states:

The applicant has sought an interim order "to put on hold the demand for a levy and issuing of work orders as a result of motions (from) the postal EGM 22 April 05". My first response was to require the applicant to further clarify aspects of his application. Further information was then provided by the applicant and included with the application. As part of my investigation of the interim order I requested a response from the committee specifically in respect of the interim order. That submission was duly received.

Following receipt of the committee submission, I considered the application with the view to making an interim order as requested. I had difficulties associated with understanding the material, in particular a lack of clarity regarding certain aspects. At this point, I elected to convene a teleconference between the parties so that I might clarify certain aspects. On Wednesday morning 18 May 2005, between 8:30 and 9:40 am, a teleconference was held between myself and:

The teleconference did assist my understanding of various aspects regarding the dispute, such that I am now in a position to make an order. I have conclude that an interim order is not appropriate and no longer required. In this regard, I note that the committee response states:

The second reason for not now making an interim order is that given the contents and discussions at the teleconference, I am now satisfied that sufficient grounds exist for the invalidation of both meetings. I said as much in the conclusion of the teleconference, at least so far as the meeting of 22 April 2005 was concerned. I will now outline my reasons for concluding that both meetings are invalid.

Meeting of 3 February 2005

In respect of this meeting, the applicant alleges that the required notice period was not given. In the submission and at the teleconference, the body corporate, and in particular, Andrew Schneller, denied this. Schneller stated that "verbal notice" had been given. I indicated that verbal notice would not suffice.

As part of the applicant’s material, there is a copy of an email sent by the Schnellers to the owners of lots 3 and 4 to which the applicant’s replied on 30 January. Whilst the Schneller email is not dated, it purports to be a notice and agenda for a meeting "scheduled for 5 pm on Thursday 3 February 2005 to be held in our apartment". It asks for confirmation of attendance by return email, and then purports to set out an agenda under the heading "matters to be discussed".

Whilst the email is not dated, there is evidence within it pointing to a date. It states "further to my email of 28 January 2005". This can only mean that the email, giving notice of the meeting and setting out the agenda, was sent after 28 January 2005, for a meeting to be held on 3 February 2005. At the absolute best, the period of notice is 5 clear days, but in all probability, less.

Referring to provisions of the Body Corporate and Community Management (Standard Module) Regulation 1997 (the module), quote:

43 Time of general meetings
A general meeting must be held at least 21 days after notice of the meeting is given to lot owners.

44 Place of general meetings
(1) A general meeting must be held not more than 15 km (measured in a straight line on a horizontal plane) from scheme land.
(2) However, if the committee notifies the owners of its intention to hold the meeting at a stated place more than 15 km from scheme land, and allows them a reasonable opportunity to object in writing to the proposed place, the meeting may be held at the place unless written objections to the
proposed place of meeting are given by or for owners of at least 25% of the lots included in the scheme.

45 Agenda for general meeting
(1) The committee must prepare an agenda for each general meeting.
(2) The agenda must include--
(a) the substance of the following motions--
(i) motions submitted by the committee for consideration at the meeting, including, for a motion with alternatives, the substance of each alternative;
(ii) if the general meeting is a requested extraordinary general meeting--the motions proposed in the notice asking for the meeting;
(iii) a motion submitted under section 4120 by a member of the body corporate and required to be included in the agenda, other than a motion stated in the agenda as an alternative under a motion with alternatives;
(iv) if an adjudicator makes an order under the dispute resolution provisions authorising or requiring the calling of the general meeting to consider motions stated in the order--the motions stated in the order;
(v) if there has been a previous general meeting--a motion to confirm the minutes of the last meeting; and
(vi) any other motion required under this regulation to be included in the agenda for the meeting;21 and
(b) if the general meeting is the first annual general meeting for the scheme--the business required to be considered at the first annual general meeting.
(3) If the general meeting is an annual general meeting (other than the first annual general meeting), the agenda must also include--
(a) the substance of each statutory motion to be considered at the meeting; and
(b) anything else required, under the Act, to be included on the agenda for the meeting.
(4) The body corporate and the committee do not incur liability for defamation by the inclusion of defamatory matter in--
(a) a motion, other than a motion submitted by the committee, contained in the agenda or a voting paper for a general meeting; or
(b) an explanatory schedule, other than an explanatory note written by the committee, accompanying a voting paper.

There are a number of points to be made regarding the meeting of 3 February 2005 and its failure to satisfy the requirements of the legislation. The first and most obvious is the failure to satisfy the 21 notice requirement for the meeting. Written notice of the meeting, in accordance with section 45, should have been given 21 days ahead of the meeting; that is, some time around 12 January. This did not occur. Instead, at best, less than 5 days notice was given.

After this, reference to section 45 which I have set out will evidence the failure to include in the notice a proper agenda. The agenda must include the substance of all motions, and not simply the nature of the item to be discussed. Whilst arguably the email does outline an agenda, the substance of motions are not included. From the items listed, no owner would know what the actual proposal was.

Reference to section 42 and 42A indicates further requirements of the notice not satisfied by the email of Schneller.

42 Notice of general meeting
(1) Written notice of a general meeting must be given to the owner of each lot included in the scheme, and if not given personally, must be sent to the owner at the owner’s address for service.
(2) The notice must state the time and place of the proposed general meeting.
(3) The notice of a proposed general meeting must--
(a) contain an agenda for the meeting; and
(b) be accompanied by--
(i) a proxy form; and
(ii) if the notice is given to the corporate owner of a lot--a form under which the lot owner may advise the body corporate of the corporate owner nominee; and
(c) be accompanied by a voting paper for all open motions to be decided at the meeting; and
(d) for a motion to be decided at the meeting by secret ballot--be accompanied by each of the following--
(i) a secret voting paper as required under section 42A;
(ii) an envelope marked ‘secret voting paper’;
(iii) either a separate particulars envelope or a particulars tab forming part of the secret voting paper envelope that a person may detach without unsealing or otherwise opening the envelope; and
(e) be accompanied by explanatory material required under section 42C; and
(f) contain or be accompanied by any other document as required under the Act or this regulation.16
(4) If all the lots have identical ownership, no notice of a general meeting need be given.

42A Requirements for voting papers
(1) The secretary must prepare 1 voting paper for all open motions to be decided at a general meeting.
(2) The secretary must prepare a voting paper (a "secret voting paper") for a motion to be decided at the meeting by secret ballot.
(3) If 2 or more motions are to be decided at the meeting by secret ballot, they may, but need not, appear on 1 secret voting paper.
(4) A voting paper must--
(a) state each motion as required under subsection (5); and
(b) state for each motion whether a resolution without dissent, special resolution, majority resolution or ordinary resolution is required; and
(c) for a secret voting paper--be marked with the words ‘secret voting paper’; and
(d) if the voting paper is accompanied by an explanatory schedule including an explanatory note for a motion--state that an explanatory note for the motion is included in the explanatory schedule; and
(e) enable a person who is a voter for the general meeting to cast a written vote on each motion to be considered at the meeting; and
(f) if the body corporate has by ordinary resolution decided that voters for general meetings may cast votes electronically for open motions--provide instructions on how a person who is a
voter for the general meeting may cast an electronic vote on each open motion to be decided at the meeting; and
(g) if the body corporate has by ordinary resolution decided that voters for general meetings may cast votes electronically for motions to be decided by secret ballot--provide instructions on
how a person who is a voter for the general meeting may cast an electronic vote on each motion to be decided by secret ballot at the meeting.
(5) The voting paper must state--
(a) for a motion other than a motion with alternatives, each of the following--
(i) the motion in the form in which it was submitted without amendment;
(ii) if the motion is not submitted by the committee--the name and, if applicable, the lot number of the person submitting the motion;
(iii) if the motion is submitted by the committee--that the motion is submitted by the committee and whether the motion is a statutory motion; and
(b) for a motion with alternatives, each of the following--
(i) the motion and alternatives as required under section 42B;
(ii) the name and, if applicable, the lot number of the person submitting each alternative;
(iii) that the motion is submitted by the committee.

For example:

These are not exhaustive of the requirements for convening a general meeting of a body corporate. In my view, they are simply the most elementary. At a minimum, there needs to be substantial compliance with these requirements for a meeting to be considered valid.

In the circumstances, the email purporting to be notice of the meeting of 3 February 2005 is invalid and of no effect. In the circumstances, I intend to order that the meeting is invalid and of no effect.

The meeting of 22 April 2005

The applicant does not deny that notice was not given, but alleges that the proper period of notice was not given. It seems that approximately 14 days notice was received, given the dating on the envelope of 7 April 2005 from the Northgate Mail Centre. I do acknowledge that, at least in contrast to the 3 February meeting, there was an attempt to give proper notice.

A meeting is not automatically invalid for a failure to give proper notice. It is always a question of degree, and an adjudicator has discretion to make orders which are "just and equitable" for the resolution of a dispute. In an appeal decision (Wei-Xin Chen and Body Corporate for Wishart Village), District Court Judge Boulton observed that:

In my view, not only must an owner show a failure to comply with the notice requirement in a substantial respect, but as well, that that failure impacted on the owner’s ability to participate in the meeting in a substantial respect. The onus is upon an applicant to establish this. In the instant case, it seems that the applicant, notwithstanding the less than required period of notice, was nevertheless able to participate in the meeting, in a fashion. I say this, as this is what in fact occurred. The notice actually states:

The meeting is in fact referred to as a "postal EGM".

The legislation does not contemplate a "postal EGM". Rather it contemplates meetings at which owners are able to attend and participate. There are a whole raft of requirements arising from this including the requirement of a quorum, all the meeting procedure requirements and counting of votes etc.

I consider the notification of the meeting as a postal EGM to be a substantial irregularity which cannot be ignored or overlooked. In the circumstances, I intend to declare this meeting invalid also.

This now concludes my determination of the application. However, there are several other points which arose in the teleconference and which I wish to reiterate.

The election of the secretary

Whilst I am not certain how Andrew Schneller was appointed to the position of secretary, certain statements in the teleconference caused me concern regarding this aspect. The election of the secretary, or any member of the committee for that matter, is by a vote taken at a general meeting of the body corporate. In limited circumstances, there might be appointment to a vacant position at committee level, however this is the exception and not the rule. Whilst I am not prepared to invalidate Mr Schneller’s appointment as secretary, as this will only promote further disarray in the case of a somewhat dysfunctional body corporate, I suggest that at the meeting necessary to now be convened, all committee members be properly elected.

Improvements to common property granted by way of exclusive use

An owner who has been granted exclusive use of common property does not have an automatic right to make improvements to that allocated area. Improvements can only be made subject to section 124 of the standard module which provides:

124 Improvements--Act, s 173
(1) An exclusive use by-law may authorise the lot owner who has the benefit of the by-law to make stated improvements to the part of the common property to which the by-law applies.
(2) Without limiting subsection (1), improvements stated in the by-law may include the installation of fixtures on the common property and the making of changes to the common property.
(3) If the exclusive use by-law does not authorise the lot owner to make an improvement, the lot owner may make the improvement only if the body corporate authorises it to be made.
(4) However, if the value of the improvement mentioned in subsection (3) is more than $250, the making of the improvement must be authorised by a special resolution of the body corporate.

Obligation of owners to contribute if valid meetings held / resolutions passed

All owners should be in no doubt of their obligation to comply with all body corporate resolutions carried at general meetings, including those raising contributions, provided the meeting is validly called and held, and the resolution in question validly passed. Contribution motions require only an ordinary resolution for the most part, so even if one owner votes no to the motion, if it is carried by a majority present at the meeting, then all owners will be required to contribute. This is the nature of bodies corporate, namely that most matters are determined by majority vote.

Queensland Body Corporate and Community Management Commissioner - Adjudicators Orders

San Sousi [2005] QBCCMCmr 268 (19 May 2005)