Raffles at Runaway Bay [2005] QBCCMCmr 675 (1 December 2005)

Last Updated: 16 January 2006

REFERENCE: 0572-2005

ORDER OF AN ADJUDICATOR

MADE UNDER PART 9 OF CHAPTER 6

BODY CORPORATE AND COMMUNITY MANAGEMENT ACT 1997

Number of Scheme:	17200
Name of Scheme:	Raffles at Runaway Bay
Address of Scheme:	18 Jennifer Avenue RUNAWAY BAY QLD 4216

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

June Patricia McRedmond, the owner of lot 3

I hereby order that resolution 9 headed Exclusive Use of Marina Berths (the motion) resolved to have been carried at the AGM of the body corporate held on 26 July 2005, was not carried as a resolution without dissent due to the dissenting vote of two owners. I further order that the motion is invalid and of no effect, and that the body corporate is prohibited from recording a new CMS with the Registrar of Titles amending the by-laws in respect of the matters the subject of the motion.

STATEMENT OF ADJUDICATOR’S REASONS FOR DECISION - REF 0572-2005

"Raffles at Runaway Bay" CTS 17200

The applicant, June Patricia McRedmond, the owner of lot 3 has sought the following order of an adjudicator under the Body Corporate and Community Management Act 1997 (the Act) quote:

I wish to appoint an adjudicator to resolve if it is correct or not for motion 9 of the agenda ... to be carried. ...

On 5 September 2005, the following interim order was made, quote:

I hereby order that the Body Corporate for Raffles at Runaway Bay shall not lodge with the Registrar of Titles a new Community Management Statement for the scheme recording the changes (by deletion) to by-law 24 until a final order to this application is made, this application is withdrawn of this order is of no effect through operation of law.

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)).

The scheme is a subdivision of 23 lots recorded under a building unit plan (now a building format plan) of subdivision. The regulation module applying to the scheme is the standard module.

In the interim order I noted as follows:

In her grounds, the applicant states:

A requisition order was presented by lots 18 and 21 which required a "yes" vote. The motion was to delete item 24(1)(a) and (1)(e)(iii) from the Marina By-laws which would change the title. The Marina is exclusive use property. It is my understanding exclusive use property this motion should have achieved a unanimous vote with no dissent in order for it to be carried.
... the vote was 11 yes, 2 no. As it was an exclusive use issue, should the 2 no votes be deemed dissent and the motion lost?

At the AGM of the body corporate held on 26 July 2005, the body corporate resolved in motion 9 headed Exclusive Use of Marina Berths that "the following conditions be deleted from Title reference 50065229 "Obligations attaching to Exclusive Use for Marina Berths:

(a) Item 24-1(a) be Deleted
(b) Item 24-1(e)(iii) be Deleted.

The minutes record that the motion was carried by a yes vote of 11. The minutes record there were 2 no votes and one abstention from voting.

The question raised by the application is whether the amendment to the by-law proposed by the motion requires a resolution without dissent in order to be carried. The relevant section of the Act provides:

62 Body corporate to consent to recording of new statement
(1) This section provides for the form of the consent of the body corporate for a community titles scheme to the recording of a new community management statement for the scheme in the place of the existing statement for the scheme.
(2) The consent must be in the form of a resolution without dissent.
(3) However, the consent may be in the form of a special resolution if the difference between the existing statement and the new statement is limited to the following--
(a) differences in the by-laws (other than a difference in exclusive use by-laws);
(b) the identification of a different regulation module to apply to the scheme.
(4) The consent to the recording of a new community management statement need not be in the form of a resolution without dissent or special resolution if the new statement is different from the existing statement only to the extent necessary for 1 or more of the following--
(a) compliance with a provision of this Act under which the body corporate is required to lodge a request to record a new statement for a purpose stated in the provision;
(b) compliance with the order of an adjudicator or the District Court made under this Act for the lodging of a request for the recording of the new statement;
(c) changing the community titles scheme to give effect to an approved reinstatement process;
(d) changing the community titles scheme to reflect a formal acquisition affecting the scheme;
(e) recording the details of allocations of common property or body corporate assets made under an exclusive use by-law;
(f) implementation of development proposed under the existing statement or under the provisions of a community management statement to which the existing statement is subject;15
(g) showing the location of a service easement for the community titles scheme by including a services location diagram;
(h) amalgamating or subdividing lots included in the community titles scheme;
(i) reproducing the existing statement without any change of substance.
15 Unless consenting to the new community management statement is a restricted issue for the body corporate’s committee under the regulation module applying to the community titles scheme, it is enough for the committee to consent to the recording of the new statement, and an ordinary resolution of the body corporate is not required.
...
It is clear under section 62 of the Act that approval of a new CMS which comprises a "difference in exclusive use by-laws" is required to be in the form of a resolution without dissent.

The motion in question proposes amendments (by deletion) to by-law 24 headed "Obligations attaching to exclusive use for marina berths". By-law 23 is headed "Exclusive Use / Marina Berths".

It is clear that the motion in question was not passed by a resolution without dissent. It is apparent on the face of it that the resolution does require a resolution without dissent in order to be valid.

I now have the benefit of several submissions from owners. Universally those submissions oppose the application. The problem with those submissions however is that they do not disclose a valid basis for opposition. The requirements of the legislation for a resolution without dissent are very clear: simply, there must be no vote against the motion in order for it to be carried. Given that it is clear that there were two no votes, then the motion was defeated. The minutes are wrong to state that the motion was carried. I intend to order that the motion was defeated, and that the motion shall not be implemented. This is the correct legal outcome. This is pretty basic stuff and I consider it extraordinary that the appointment body corporate manager was not able to advise the body corporate on these matters.

In the circumstances, what should have transpired was that the motion was declared to have not been carried, or to have failed. This should then have been recorded in the minutes. Parties aggrieved by this outcome then had an option available to them; namely to make an application to this office alleging that the motion was not passed because of opposition that in the circumstances was unreasonable, and applying for an order of an adjudicator giving effect to the motion as proposed or a variation of the motion as proposed.

This is an order that the adjudicator is entitled to made (see schedule 5 of Act, examples of Adjudicator’s Orders). I intend to make no comment on the merits of such an application. However, until such an application is made, this matter is at an end.