Admiralty Gardens [2005] QBCCMCmr 360 (30 June 2005)

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

I hereby order that Tony Hobson of Delrey Pacific Pty Ltd trading as Delrey Pacific Body Corporate Management Services is appointed as an administrator for the Admiralty Gardens Community Title Scheme for a period of 12 months from the date of this order to perform the obligations of the body corporate and its committee under the Body Corporate and Community Management Act 1997, the Body Corporate and Community Management (Small Schemes Module) Regulation 1997 and the community management statement for the scheme;

I further order that the body corporate shall remunerate Tony Hobson in his position as administrator the fee of $600 per annum based on $150 per lot, plus disbursements at a flat rate of $250 per annum, based on $50 per lot, and such additional fees and disbursements as may arise in accordance with the Community Titles Institute of Queensland "Management Agreement" as attached to a letter dated 1st February 2005 from A.J. Hobson to Maria van Dam, Secretary/Treasurer for the scheme.

STATEMENT OF ADJUDICATOR’S REASONS FOR DECISION - REF 0052-2005

"Admiralty Gardens" CTS 15228

APPLICATION

This is an amended application by Maria Van Dam, lot owner of no. 2, against the Body Corporate for Admiralty Gardens ( the Applicant ) for an order that the Tony Hobson of Delrey Pacific Body Corporate Management Services (Mr Hobson) be appointed as an administrator of the Admiralty Gardens Body Corporate for a period of between 12 months and 2 years, because there is a voting "deadlock" within the body corporate.

In a letter dated 1st February 2005, Mr Hobson has indicated his willingness to be re-appointed as an administrator in accordance with a fixed fee and a Community Titles Institute of Queensland Management Agreement being signed

JURISDICTION

"Admiralty Gardens" Community Titles Scheme 15228 is a scheme under the Body Corporate and Community Management Act 1997 ( the Act) and the Body Corporate and Community Management (Small Schemes Module) Regulation 1997 (the Small Schemes Module).

There are 4 lots in the scheme and the buildings are created under a Building Unit Plan of subdivision. It is noted that the contribution schedule lot entitlements are not equal in that Lots 1 and 2 carry a contribution of 23, Lot 3 carries a contribution of 24; and Lot 4 carries a contribution of 30.

There has been a history of applications relating to this community titles scheme resulting in 8 previous adjudicators’ orders being made between 1999 and 2003. Mr Hobson was appointed as an administrator by adjudicator’s order on 5th April 2001 for a period of 2 years, which period was apparently extended by virtue of Motion 16 at an annual general meeting held on 29th May 2003 wherein it was recorded that "the existing Body Corporate Agreement to be extended at the same rate and now concluding on mid to late September 2003....."

In any event, Mr Hobson as Body Corporate Manager was still present at the AGM held on 10th June 2004, wherein at Motion 03- E it was voted 3/1 in favour of the body corporate running itself from the "hand-over" date of 31st July 2004.

The original application was made on 23rd January 2005 by the applicant as a lot owner in dispute with another lot owner, and seeking an order for administration; a subsequent application for an interim order seeking administration was made on 1st February 2005, by the applicant in her capacity as treasurer/secretary in dispute with lot owners and occupiers Mr and Mrs Crrittenden, and this application for an interim order was rejected by the Commissioner as being an unsuitable application for an interim order. The application of 23rd January 2005 was amended by the applicant on 4th February 2005 as a lot owner in dispute with the body corporate, again seeking the appointment of an administrator.

The applicant in a letter "To whom it may concern" dated 3rd February 2005 purported to delegate her duties as secretary to Barry Que (Mr Que) by giving a "proxy vote" to him. There is no provision in the legislation for a committee member to delegate power by proxy. Proxies may only be used for voting at a general meeting of the body corporate (s.40 Small Schemes Module) when in a prescribed format, a lot owner gives another person power to vote on that person’s behalf.

In so far as such delegation is ineffectual, the applicant remains as duly elected secretary/treasurer. It is noted that the letter was not a letter of resignation. In any event this letter has no effect on the status of the application.

The applicant in support of her application for an administrator to be appointed set out a list of complaints between 12th January 2005 and 23rd January 2005 detailing breaches of by-laws concerning noise, keeping of an animal, and parking on common property by two other lot owners/occupiers. Attempts to remedy the breaches by the applicant and Mr Que resulted in abusive language, a failure of communications, and the involvement of the police. Her contention is that because there are only 4 lot owners in the scheme, two of whom are breaching by-laws, that the body corporate does not have the ability to enforce its by-laws without the assistance of an outside administrator.

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)).

SUBMISSIONS

Submissions were invited from all 3 remaining lot owners in accordance with section 243(2)(b) of the Act, as persons affected by the application. All the remaining lot owners made submissions, as well as Mr Cliff Crittenden (Mr Crittenden) who is not a lot owner, but is an occupier and the spouse of Mrs Susan Crittenden (Mrs Crittenden) who owns Lot 4.

It is not disputed by the owner of Lot 1, Keith Gillespie (Mr Gillespie) that he owns a dog which is kept in his lot. Mr Gillespie does not want the body corporate to be run by an administrator, "especially .... Tony Hobson" whom he felt charged "exorbitant fees" and bombarded him with unnecessary paperwork. He says he is willing to nominate himself as secretary and he does not feel that such a small scheme should be difficult to run from a financial aspect.

Neither Mr nor Mrs Crittenden commented concerning the allegations of noise or parking on common property, but both supported Mr Gillespie’s keeping of a dog. They both felt that the applicant was trying to run the body corporate in a dictatorial way by insisting on the letter of the law instead of by discussion and agreement. Mr Crittenden called the applicant’s methods " a personal Gestapo program" and stated that the applicant’s main goal in life was to dictate and control other peoples’ lives. His submission was abusive and vindictive about the applicant, and was an extraordinary document to place on file in an adjudication process where his aim is to persuade the reader of the reasonableness of his point of view. It had quite the reverse effect.

The owners of Lot 3, Alaric Gale Hall and Phyllis Lorraine Hall ( Mr and Mrs Hall) are non-resident but stated that they support the application for continued administration for 12 months or longer. They state the current relationship between the owners results in a situation where no decision-making can take place.

DETERMINATION

Committee for a Small Scheme
At the AGM held on 10th June 2004, the applicant was the sole nominee for secretary and treasurer of the body corporate and took up those positions.

In a body corporate run under the Small Schemes Module there must be a committee which consists only of a secretary and treasurer, and one person can hold the two positions ( s.10(2) Small Schemes Module) provided that that person is a lot owner, or a person nominated to be secretary or treasurer by a member of the body corporate. ( s.11(1)(b) Small Schemes Module) There is no requirement to have a chairperson or any ordinary members on the committee and as such these positions are redundant. The nominations for other members of the committee at the June 2004 AGM (and the 29th May 2003 AGM) were therefore invalid.

I note that there was some understanding at the June 2004 AGM that Mr Que was to assist the applicant in her role as secretary/treasurer but that he was considered ineligible to be secretary or treasurer himself as he was not a lot owner. In fact there is no bar to Mr Que’s nomination as secretary or treasurer or both combined, as any person may be nominated by a member of the body corporate. ( s.11(1)(b) Small Schemes Module as follows:-

11 Eligibility to be secretary or treasurer [SM, s 10]
(1) A person is eligible to be the secretary or treasurer if the person is an
individual and is also--
(a) a member of the body corporate; or
(b) a person nominated to be the secretary or treasurer by a member
of the body corporate.
(2) Only 1 co-owner of a lot can be a member of the committee, on the
basis of ownership of the lot, at a time.)

Motions to an AGM
There is no need to put motions to an AGM that the body corporate will comply with the legislation in various particulars, and it invites confusion to put such motions. Section 318 of the Act states as follows:-

318 Prevention of contracting out
A person can not waive, or limit the exercise of, rights under this Act or
contract out of the provisions of this Act.

Remedies are given under the Act and the Regulations, for example, for breaches of the legislation, or the by-laws of the scheme, and it is excessive to the point of meaninglessness to seek to bind the body corporate to obey the law. Motions 03-A, 03-B and 03-C put to the June 2004 AGM should have been ruled out of order by the person chairing the meeting ( s.28(1)(a)

28 Power of person chairing meeting to rule motion out of order
[SM, s 47]
(1) The person chairing a general meeting of the body corporate must
rule a motion out of order if--
(a) the motion, if carried, would conflict with the Act, this regulation
or the by-laws, or would be unlawful or unenforceable for
another reason; or
(b) ..............
(2) The person chairing the meeting must give reasons for ruling a
motion out of order and the reasons must be recorded in the minutes of the
meeting.
(3) The persons present and entitled to vote may reverse a ruling given
under subsection (1)(a) by passing an ordinary resolution disagreeing with
the ruling.

I note that neither of the above issues is the issue for determination, but it is exemplary of the dysfunctional nature of this body corporate, even though the nominations for committee, and the motions proposed to a general meeting, were received at a time when the body corporate had engaged a body corporate manager, or a body corporate manager was still acting as an administrator under a previous order of an adjudicator

Powers of the Committee

1. Breaches of By-laws
All lot owners are entitled to see that the scheme by-laws are enforced. It is noted that new scheme by-laws were recorded by Admiralty Gardens body corporate in the Land Titles Registry on only 30th July 2003. The Act provides a process to follow in the event that there is a belief that a by-law is being breached. Certain by-laws allow a breach if the permission in writing of the body corporate ( ie the committee) is first obtained.

In the event of a breach, the alleged offender is served with a by-law contravention notice by the committee or body corporate manager if such a person is engaged to perform this duty. If the alleged offender does not stop the breach of by-law, the committee may take the offender to the Magistrates Court where a fine of up to $1500 may be imposed, or may make application for dispute resolution to this office. If the adjudicator makes an order, that order can be enforced in the Magistrates Court. Section 288 of the Act states that failure to comply with an order of an adjudicator may result in a maximum penalty of 400 penalty units, that is currently a fine of $30,000.

At a meeting of the committee, a question is decided by - if the positions of secretary and treasurer are held by one person – that person ( s.17(a) Small Schemes Module) that is, the applicant alone may decide questions which the body corporate can by legislation decide without calling a general meeting, such as whether or not to allow a breach of by-laws. Any person aggrieved by the decision of the committee, may make an application to the commissioner’s office for resolution of the dispute.

2. Maintenance and spending

Submitters made reference to maintenance of the gardens, and mowing to be undertaken.
The committee in a Small Schemes Module has a spending limit of $200 times the number of lots, so the secretary/treasurer can organise maintenance and mowing services for example, to an extent of $800, without calling a general meeting. (s.64 Small Schemes Module and dictionary definition " relevant limit for committee spending".) Certain issues must be put to a general meeting, for example, a motion to engage a body corporate manager ( s.46 Small Schemes Module)

ORDER

It appears that the applicant voted in favour of running the body corporate without outside assistance at the AGM on 10th June 2004 (Motion 03 – E) and that the one opposing vote came from Mr and Mrs Hall in Lot 3 although this is not recorded in the documents in my possession. The applicant alludes to the Halls voting "No" to 03-E’" in the document entitled "With Reference to the Minutes of the AGM held on 10 June 2004"

If that is the case, then the applicant has changed her mind since June 2004, presumably when she found that she was overwhelmed by the job of secretary/treasurer which even in the most congenial of circumstances is not always an easy task.

I am of the view that much of the discord described stems from ignorance of the legislation and an inability for the body corporate to empower itself by using the legislation, compounded by the attitude of Mr Crittenden, as described above.

I am of the opinion that this body corporate scheme continues to need assistance from an outside source for a period of 12 months in order to allow body corporate members and the committee for the time being as nominated/elected to understand its powers and perform its duties. I am aware that in a vote at a general meeting in a scheme of only 4 lots, on a poll vote being requested where one lot owner has a greater number of contribution schedule lot entitlements as does Lot 4, there will be several occasions when a vote on a motion to be decided by ordinary resolution will be resolved in favour of that lot owner. Putting in an administrator to help run the scheme will not change that fact.

I recommend to the committee that it obtains at least a copy of the Small Schemes Module so that the body corporate may become conversant with the legislation under which it has resolved to operate. The Commissioner’s office also offers an information service on freephone 100 060 119.

It is further noted that Mrs Crittenden in a letter to the commissioner’s office dated 24th June 2005 advises that a successful AGM was held on 28th May 2005. I trust that this is an indication of improved relationships within the body corporate.

Number of Scheme:	15228
Name of Scheme:	Admiralty Gardens
Address of Scheme:	5 Thornely Close BELLARA QLD 4507

Queensland Body Corporate and Community Management Commissioner - Adjudicators Orders

Admiralty Gardens [2005] QBCCMCmr 360 (30 June 2005)