Teneriffe Hill Apartments [2005] QBCCMCmr 424 (4 August 2005)

Number of Scheme:	24567
Name of Scheme:	Teneriffe Hill Apartments
Address of Scheme:	29 - 43 Florence Street TENERIFFE QLD 4006

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

I hereby order that the application for the following orders:

A declaration by the Commissioner that, in the event that Strata Solutions be re-appointed as Body Corporate Manager, their nomination as alternative "C" in ordinary resolution 2 of the attached motions for the upcoming EGM, be declared invalid.

If alternative "C" is carried, the body corporate not engage strata solutions pending the outcome of this adjudication.

Is dismissed

STATEMENT OF ADJUDICATOR’S REASONS FOR DECISION - REF 0503-2005

"Teneriffe Hill Apartments" CTS 24567

This is an application by Yates Nominees Pty Ltd, owner of lots 1, 2, 51, 53, 54, 59, 65 and 66 seeking the following order of an adjudicator pursuant to section to Part 9 of Chapter 6 of the Body Corporate and Community Management Act (Act) 1997:

A declaration by the Commissioner that, in the event that Strata Solutions be re-appointed as Body Corporate Manager, their nomination as alternative "C" in ordinary resolution 2 of the attached motions for the upcoming EGM, be declared invalid.

The Interim Order sought is that:

If alternative "C" is carried, the body corporate not engage strata solutions pending the outcome of this adjudication.

THE SCHEME

Teneriffe Hill Apartments Community Titles Scheme is a 68 lot scheme under the Body Corporate and Community Management Act (Act) and the Act’s Accommodation Module Regulation (Accommodation Module). The community management statement indicates that lots 1 and 2 are used for commercial purposes and lots 3 to 68 are used for residential purposes.

The applicant was the developer of the scheme and continues to have an interest in the scheme as holder of both the commercial lots and a number of residential lots.

On 22 June 2005 I ordered that within 1 month of the date of that order the body corporate was to call an extraordinary general meeting for the purposes of appointing a Body Corporate Manager for a fixed term. This meeting has now been called and is scheduled for 4 August 2005. The agenda for the meeting includes the following Item 2:

2. Ordinary Resolution Motion with Alternatives

Appointment of Body Corporate Manager

That under authority of the Body Corporate and Community Management Regulations, the body corporate engage a body Corporate Manager for the supply of administrative services to the body corporate commencing from 4 September.
If you have voted "Yes" to the resolution above, please continue and record your votes on the following resolutions (indicate choice in area provided on voting paper):

Alternative A (Submitted by Committee)
Appointment of Teys Strata
That Teys Strata (Maroochydore) Pty. Ltd. be appointed Body Corporate Manager of "Teneriffe Hill Apartments" in accordance with the Body Corporate and Community Management Act and Regulation Module applying to the scheme, pursuant to the terms and conditions of the proposed manager’s agreement (enclosed). The term of the engagement is for one year.

Alternative B (Submitted by Dr. Yates lots 1, 2, 51, 53, 54, 59, 65 and 66)
Appointment of Premier Body Corporate Management

That Premier Body Corporate Management Pty. Ltd. be appointed Body Corporate Manager of "Teneriffe Hill Apartments" in accordance with the Body Corporate and Community Management Act and Regulation Module applying to the scheme, pursuant to the terms and conditions of the proposed manager’s agreement (enclosed). The term of the engagement is for three years.

Alternative C (Submitted by Committee)
Appointment of Strata Solutions

That Strata Solutions be appointed Body Corporate Manager of "Teneriffe Hill Apartments" in accordance with the Body Corporate and Community Management Act and Regulation Module applying to the scheme, pursuant to the terms and conditions of the proposed manager’s agreement (enclosed). The term of the engagement is for one year.

However the applicant has referred to minutes of the AGM held on 30 March 2005, where it was resolved as follows:

7. Termination of Strata Solutions,
That the Body Corporate do hereby agree to terminate the services of Strata Solutions as Body Corporate Manager for Teneriffe Hill Apartments with effect from the expiration of the fixed term of the current appointment.
Submitted by Dr Yates
Resolved by Ordinary resolution
Decided by Poll Count – YES:229 NO:153 ABSTAIN:16

8. Management Tender,
That the Body Corporate call for tenders from at least two other Body Corporate Managers following termination of Strata Solutions.
Submitted by Dr Yates
Resolved by Ordinary resolution
Decided by Poll Count – YES:229 NO:153 ABSTAIN:16

It is submitted that the determination of the Body Corporate was to terminate the services of Strata Solutions and call tenders for at least two OTHER body corporate managers.
It is further submitted that the intention of the Body Corporate was to dispense with the services of Strata Solutions and appoint another body corporate manager after obtaining tenders from two other body corporate managers.

JURISDICTION

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) & (2) provide that -
(1) The adjudicator may 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.
Examples
1. The adjudicator may stop the body corporate from carrying out work on common property until a dispute about the irregularity of proceedings has been investigated and resolved.
2. The adjudicator may stop a general meeting deciding or acting on a particular issue until it has been investigated and resolved.
(2) An interim order
(a) has effect for a period (not longer than 1 year) stated in the order; and
(b) may be extended, varied, renewed or cancelled by the adjudicator until a final order is made; and
(c) may be cancelled by a later order made by the adjudicator; and
(d) if it does not lapse or is not cancelled earlier, lapses when
(i) the application is withdrawn; or
(ii) the commissioner gives the person who made the application a written notice under section 241 rejecting the application; or
(iii) a final order is made by an adjudicator to whom the application is referred. ...

INTERIM ORDERS

The Commissioner has referred the application to me pursuant to section 267 of the Act for consideration of both interim and final orders. In any consideration of an application that seeks the making of an interim order, it is necessary to determine whether, because of the nature or urgency of the circumstances relating to the application, an interim order is in fact necessary or appropriate. The examples included in the Act under section 279 are suggestive of the usual circumstances where an interim order might be made.

DETERMINATION

The applicant is seeking a declaration by the Commissioner that, in the event that Strata Solutions is re-appointed as body corporate manager, their nomination as alternative "C" in motion no. 2 contained in the attached motions for the upcoming EGM, be declared invalid.

The Interim Order sought is that:

If alternative "C" is carried, the body corporate not engage strata solutions pending the outcome of this adjudication.

It is my understanding that following the AGM on 30 March 2005, the Committee obtained one tender for the supply of body corporate management services from Teys Strata (Maroochydore) Pty. Ltd. while Dr. Yates undertook to obtain the other quotation from Premier Body Corporate Management Pty. Ltd. Clearly two quotations have been obtained for the supply of body corporate services although, it would appear to me that when the relevant motion was carried at the AGM, it was contemplated that the body corporate would call for both tenders. Nevertheless, two alternative quotations have been obtained and there is no evidence of any detriment to the body corporate.

In the circumstances, I do not intend to grant the orders sought and propose to dismiss the application pursuant to section 270 as I believe that it lacks substance.

Although, it was resolved that Strata Solutions would not have their appointment automatically renewed at the expiration of their initial term of appointment, I can see no reason why Strata Solutions could not be reconsidered for appointment. I do not believe that the minutes of the AGM evidence an intention to never again engage Strata Solutions. The members of the body corporate now have the opportunity to compare the services and fees charged by two other body corporate managers as well as Strata Solutions and are able to make an informed and democratic decision on that basis as contemplated by the Act.

Queensland Body Corporate and Community Management Commissioner - Adjudicators Orders

Teneriffe Hill Apartments [2005] QBCCMCmr 424 (4 August 2005)