Views Over Lamington [2005] QBCCMCmr 679 (1 December 2005)

Number of Scheme:	2712
Name of Scheme:	Views Over Lamington
Address of Scheme:	45 Lamington Terrace DUTTON PARK QLD 4102

TAKE NOTICE that pursuant to an application made under the abovementioned Act by Robyn Lucienne, the owner of Lot 5

I hereby order that the application for an order by Robyn Lucienne, the owner of Lot 5 seeking outcomes to invalidate the Annual General Meeting held on 7 November 2002; to overturn the resolution of the body corporate at the Annual General Meeting held on 6 November 2003 to engage ADBC Pty Ltd as body corporate manager; and to overturn the resolution of the body corporate at the Annual General Meeting held on 23 November 2004 to engage ADBC Pty Ltd as body corporate manager, are dismissed for lack of jurisdiction.

I further order that in all other respects, the application is dismissed.

STATEMENT OF ADJUDICATOR’S REASONS FOR DECISION - REF 0535-2005

"Views Over Lamington" CTS 2712

APPLICATION

This application is by Robyn Lucienne, the owner of Lot 5 (applicant) against the body corporate (respondent). The applicant is seeking a number of outcomes and I will refer to each of the outcomes sought separately under "Determination".

JURISDICTION

"Views Over Lamington" Community Titles Scheme 2712 is a scheme under the Body Corporate and Community Management Act 1997 (Act) and the Body Corporate and Community Management (Standard Module) Regulation 1997 (Standard 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:

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 the body corporate manager for distribution to the owner of each lot (excluding the applicant) and the committee. A submission was received from a previous chairperson, Richard Carter. The applicant made a written reply to submissions under section 244 of the Act.

DETERMINATION

The above outcomes sought relate to voiding a general meeting of the body corporate and resolutions of the body corporate at general meetings. Section 242 of the Act imposes a time limit on applications which seek to void a general meeting of the body corporate or a resolution of the body corporate. Section 242(2) provides that the application must be made within 3 months of the meeting, and in the case of an application seeking to void a resolution, within 3 months of the meeting at which the resolution was passed. Despite the imposition of this time limit, section 242(3) provides that an adjudicator may, for good reason, waive the non-compliance.

The application was initially made on 28 July 2005. By letter dated 15 August 2005, Frank Hemeter of the Commissioner’s Office informed the applicant of the requirements of section 242 of the Act. The applicant subsequently provided reasons to support waiving the time limit requirements.

In the appeal of Weeks v. Commissioner for Body Corporate (Maroochydore District Court Appeal 13/99), Judge Dodds made the following statement about section 242 at pages 4 and 5 of the judgment:

Given the requirements of section 242, I must deal with the matter of jurisdiction at the outset which entails an examination of the application and the submissions of the parties against each of the above criteria.

The delay between the general meetings and lodgement of the application is approximately two and a half years, 1 and a half years and 6 months respectively. Given that the time limit imposed by the legislation, these periods can only be seen as periods of considerable delay.

Although not stated in the legislation, in my view the reason for the inclusion of a time limit in the legislation is to provide certainty to a body corporate in its management and administration of body corporate affairs, and to others acting in reliance on body corporate decisions. The body corporate having passed a resolution for something to be done (eg the payment of levy contributions by lot owners to meet body corporate expenses, the confirmation of insurance, the engagement of a person as a body corporate manager, the election of a committee) and the committee as the administrative arm of the body corporate needs to make decisions and take appropriate actions for implementation of a resolution. Implementation of resolutions is a duty of the committee as outlined in section 101(2) of the Act, which requires that, "...the committee must put into effect the lawful decisions of the body corporate." That is, committees need to get on with the business of the body corporate unhindered by the uncertainty of resolutions being called into question many months after being decided. This need is no less important for outsiders dealing with a body corporate who also need the certainty of relying on body corporate decisions for commercial decisions subsequently taken, and the attendant legal and financial ramifications.

The records of the Commissioner’s Office indicate that the applicant made two previous applications, Ref. Nos. 598-2002 and 343-2004. Neither application sought an outcome regarding the validity of a general meeting or a resolution on a motion at a general meeting. Therefore, neither application was subject to the requirements of section 242 of the Act. However, the applicant has had experience in making a dispute resolution application, and information regarding the time limit is clearly stated in the "Guide to Completing a Dispute Resolution Application" which is available for the information of any person and is essential information to a person who proposes to make an application. The Guide is clearly highlighted on the "Dispute Resolution Application" form. In my view, the Commissioner has taken appropriate steps to ensure that information relating to the time limit is published and apparent to a prospective applicant.

The applicant also submits that the necessity for making the application became known at a later time due to action taken by the body corporate. Given the outcomes sought, in my opinion, the applicant must accept some responsibility for ensuring that any dispute regarding the meeting or a particular resolution of a meeting was progressed at an earlier time, and I do not consider that the applicant’s reasons for the lateness are acceptable. In the circumstances, I do not consider that the reasons put by the applicant constitute "good reason" for a waiver on this count.

I have obtained a copy of the Minutes of the annual general meetings held on 7 November 2002; 6 November 2003; and 23 November 2004. The Minutes of these meetings demonstrate that the body corporate has made resolutions about its financial management including determining the contributions to be paid by lot owners for the administrative fund and the sinking fund, about its insurance, the election of its committee and the engagement of a person as a body corporate manager.

With respect to the Annual General Meeting held on 7 November 2002 (2002 AGM), the resolutions relating to the statement of accounts for the financial year ending 31 August 2002; the budgets for the financial year ending 31 August 2003; the contributions for the year ending 31 August 2003; the engagement of the body corporate manager; and the election of the committee have been implemented and completed.

The applicant also seeks outcomes with respect to the resolutions made at the annual general meetings held in 2002, 2003 and 2004 to engage ADBC Pty Ltd (ADBC) as body corporate manager. The resolutions at the annual general meetings held in 2002 and 2003 engaged the body corporate manager for a period of 1 year and have essentially been implemented and completed. The resolution at the annual general meetings held in 2004 caused the engagement to be for a period of 3 years. Despite this resolution, the body corporate, at the adjourned Annual General Meeting dated 1 November 2005 resolved to engage the body corporate manager for a period of 1 year.

In my view, it is evident that the resolutions of the body corporate at the 2002 AGM have been implemented and completed. The effect of the delay in making the application and the effect of the outcome sought is obvious. Likewise, the resolution at the Annual General Meeting dated 6 November 2003 to engage ADBC for 1 year has ended. While the resolution at the Annual General Meeting dated 23 November 2004 engaged ADBC for a period of 3 years, it would seem that this resolution has been affected by the resolution at the recent adjourned Annual General Meeting dated 1 November 2005 resolved to engage the for a period of 1 year beginning 1 December 2005.

Given that the resolutions being questioned have been implemented, the body corporate has received income and incurred expenditure as a consequence of the resolutions, and that the resolutions would seem to have ended, in my view, the effect of the delay on others outweighs the relief now being sought by the applicant.

This is the last of the criteria set out in the Weeks case. It would seem to me that what is required under this criteria is not a comprehensive examination and determination of all the points put by the applicant, but a prima facie assessment of those issues. The applicant refers to the lack of notice of the 2002 AGM. However, it is evident that she participated in the AGM by completing a voting paper. The applicant also submits that the motion to engage the body corporate manager should have been the last item on the agenda. It would also seem that the applicant is generally concerned about the performance of the body corporate manager. The applicant also states that the relevant motion at the 2002, 2003 and 2004 annual general meetings was unauthorised pursuant to section 42(3)(c)(i), presumably of the Standard Module. Due to the amendments to the Standard Module in December 2003, the comparable provisions of the Standard Module are section 42A(4) and (5) of the Standard Module.

While it has not been clearly demonstrated that the lack of notice of the 2002 AGM was due to an oversight by the body corporate or that the notice of an annual general meeting was deficient, I do not consider that these claims, even if proven, have significantly impacted on the ability of the applicant or any other lot owner to participate in the decision making process or on the management and administration of the body corporate. The applicant has also made a claim that the engagement of the body corporate manager must be the last item of business for the meeting. This is a requirement of the Standard Module^[1] which is applicable where a motion on the agenda of a general meeting proposes the engagement of a person as a body corporate manager to carry out the functions that would, if there were a committee for the body corporate, be carried out by the committee and the executive members of the committee. This requirement did not commence until 1 December 2003 and certainly does not apply to the annual general meetings held in 2002 and 2003. I have read the minutes of the Annual General meeting dated 23 November 2004, and given that a committee was chosen, it can only be concluded that this requirement does not apply.

I do not intend to examine and determine these issues any further as I am of the opinion that no issue is so clear or its impact so adverse to the interests of the applicant that they outweigh the probable adverse effects on the body corporate if the waiver under section 242(3)(b) is allowed.

The ultimate purpose of the orders sought by the applicant is to void an annual general meeting and resolutions relating to the engagement of a person as a body corporate manager at 3 different annual general meetings. I have commented on the grounds of substance provided by the applicant and I have noted that the vote of owners at the relevant meetings was in favour of the resolutions, and there is nothing before me to show that those owners have resiled from this view.

Section 276(1) of the Act requires that an adjudicator may make an order that is "just and equitable in the circumstances". In balancing the four criteria set out in the Weeks case, I am not satisfied that the applicant has established that there is "good reason" for me to waive the time limit set by section 242(2) of the Act and I have therefore dismissed the relevant outcomes sought in the application for lack of jurisdiction.

6. The secretary or the body corporate manager invite motions for the engagement of a person as a body corporate manager and convene an extraordinary general meeting as a matter of urgency.

Given the decision I have made with respect to the disputed annual general meetings, I do not consider that there is any reason to make an order that an extraordinary general meeting be convened. The applicant, as a lot owner is entitled to submit a motion or motions to the body corporate for its consideration at a general meeting in accordance with section 41 of the Standard Module. Further, an extraordinary general meeting can be requested by lot owners in compliance with section 61 of the Standard Module.

7. That the mailbox be exchanged with another owner or replaced.

The applicant claims that the body corporate has disadvantaged a lot owner by not ensuring that a door on the mailbox can be locked. The applicant also claims that mail to Lot 5 has been stolen, and that as a consequence, she has not received notices from the body corporate. The applicant submits that the body corporate had knowledge of this problem.

Section 94 of the Act provides that the body corporate must administer common property reasonably and for the benefit of lot owners. The body corporate has a duty under section 152 of the Act to administer, manage and control the common property reasonably and for the benefit of lot owners. Section 109(1) of the Standard Module provides that the body corporate must maintain common property in good condition.

The applicant claims that the mail box for Lot 5 is not lockable. It is assumed that the other boxes are lockable and that the box for Lot 5 has been damaged in some way. If this is the case, and the damage to the box is the responsibility of the body corporate to maintain, then the body corporate has a legislative obligation to maintain it in good condition, and should do so as soon as is practicable. Richard Carter has submitted that letter boxes will be addressed over the next twelve months. The Minutes of the Annual General Meeting dated 1 November 2005 indicate that the body corporate resolved to replace or remove mailbox chains to the existing mail box area.

In view of the circumstances of this matter, I do not consider that an order is required of the nature sought by the applicant. Certainly, an order will not be made to require another unidentified lot owner to exchange mail boxes with the applicant, and the applicant has not demonstrated to my satisfaction that the mail box requires replacement. Therefore, the order sought is dismissed.

8. The body corporate has not acted in the interests of all lot owners.

The body corporate’s general functions include administering the common property and body corporate assets for the benefit of lot owners, enforcing the community management statement, and carrying out other functions given to the body corporate under the Act or the community management statement^[2]. The body corporate must act reasonably in anything it does under section 94(1)^[3]. The body corporate has all the powers necessary for carrying out its functions^[4]. The body corporate must administer, manage and control the common property reasonably and for the benefit of lot owners^[5].

The applicant has sought a general statement which does nothing other than restate a body corporate’s legislative obligation. For this reason, this outcome sought is dismissed.

The applicant submits that the body corporate allowed the owner of Lot 3 use of infrastructure situated on the common property. It would appear that the applicant is referring to a washing machine. While the applicant claims that the area around the machine is a public liability risk, the applicant has not provided any grounds to support this claim or the claim that the body corporate has assigned common property to a lot owner. The applicant has an obligation to state the grounds to support the application, and the parties to the dispute have a right to be given these grounds to enable the making of a submission to the application. While the applicant has detailed many issues in the grounds to the application, the applicant has not demonstrated to my satisfaction any reason to make any order, other than to dismiss this outcome sought.

Section 35 of the Act provides that owners own the common property as tenants in common which gives each owner a general proprietary right to use the common property. Sections 94 and 152 of the Act provide that the body corporate administers, manages and controls the common property. Section 167 of the Act provides the basic rule governing an owner’s use of common property and provides, quote:

The occupier of a lot included in a community titles scheme must not use, or permit the use of, the lot or the common property in a way that--

(b) interferes unreasonably with the use or enjoyment of another lot included in the scheme; or

While the applicant submits that the use of common property is similar to a lease or a grant of exclusive use, the exact use of the area by the owner is unknown and the extent of the use is unknown. If in fact the owner of Lot 3 has a use of the common property for the purposes of placing and using a washing machine, the body corporate must ensure that the owner of the Lot uses the common property with the proper authority and in such a way as not to breach for example, section 167 of the Act and does not use common property to the detriment to the owners of other lots included in the scheme. Mr Carter has submitted that the removal of a temporary laundry is one of the issues to be addressed over the next twelve months. If in fact this machine is part of this laundry and the laundry has been set up by a lot owner without the necessary body corporate approval, then the body corporate should be taking immediate steps to have all items removed from the common property, especially if the person is making use of common property electricity to operate the machine.

10. Expenditure of the sewerage pipe should have been anticipated.

This outcome sought is merely a statement of the applicant’s opinion. The applicant is correct that under section 94(3) of the Standard Module, the body corporate has an obligation to raise amounts to provide for necessary and reasonable spending. However, if adequate provision has not been made in a budget for such expenditure, the amount is payable by the lot owners at the time that the liability is incurred^[6]. While it may have been prudent to anticipate such expenditure, I do not consider that the outcome sought demonstrates the existence of a dispute to warrant the making of an order. Therefore, this outcome sought is dismissed.

11. That the body corporate send contribution notices to each lot owner.

The body corporate has an obligation under section 96 of the Standard Module to give a written notice of contributions payable to lot owners. Section 96(3) of the Standard Module provides that the notice may be served on a lot owner at the lot owner’s address for service or in a way directed by the lot owner. Section 140 of the Standard Module provides that a person who becomes a lot owner must give notice to the body corporate advising the body corporate of the person’s residential or business address, and if different, the person’s address for service. Section 142 of the Standard Module provides that the address may be changed by another notice given to the body corporate.

The applicant submits that the body corporate did not ensure that notices of contributions payable were received by her before payment was required. However, the applicant has not shown that the body corporate did not comply with section 96(3) of the Standard Module. The body corporate is entitled to give notice by sending it by post to the address notified to the body corporate. The applicant has not shown that the body corporate did not give notice in this way, or in some other way directed by her. While the body corporate has an obligation to give proper notice, the body corporate is not obliged to ensure that the notice is actually received by the person to whom the notice is given.

Given that the applicant has not demonstrated that the body corporate did not give notice in accordance section 96, this outcome sought is dismissed.

Other issues

The applicant has also detailed many instances of problems encountered with the actions of a person in the scheme. In this regard, note should be taken of the provisions of section 167 of the Act. In addition, the body corporate may have a relevant by-law. The by-laws form part of the CMS for the scheme, and under section 59 of the Act, the CMS is binding on the body corporate, each member of the body corporate and on each person who is otherwise an occupier of a lot in the scheme. It is a function of a body corporate under section 94(1) of the Act to enforce the CMS, including any by-laws for the scheme. Under section 94(2), the body corporate must act reasonably in enforcing its by-laws. Sections 182 to 188 of the Act make provision for the enforcement of body corporate by-laws by the body corporate and by individual lot owners and occupiers.

The applicant has made claims with respect to the appropriateness of a person being the chairperson of the body corporate, and lays blame on the body corporate and the body corporate manager for allowing this person to be chosen to this position. The legislation regulates who is eligible to be a member of the committee^[7] and provided that person is properly nominated and elected, that person is able to hold that position subject to for example, section 25 of the Standard Module. It is a matter for lot owners to determine the eligible person to be chosen to a committee position, and it is not a function of a body corporate manager to in some way affect the outcome of the election of a committee member.

The applicant also makes statements with respect to the management of the scheme. With respect to the composition of the committee, I note that the positions of secretary and treasurer remained vacant after the recent Annual General Meeting. Given this circumstance, the body corporate should have complied with sections 24 to 24C of the Standard Module and convened an extraordinary general meeting to appoint an eligible person or persons to these positions. If these positions remain vacant, then the body corporate should, as soon as possible take steps to fill these vacancies. The applicant also mentions that there are no controls over spending or management. The Standard Module contains a number of provisions with respect to committee decision making and spending. For example, section 26 of the Standard Module make provision for restrictions on committee decision making and section 103 limits the spending authority of the committee.

With respect to the engagement of a person as a body corporate manager, section 78 of the Standard Module provides that the engagement must state the basis on which payment for the manager’s services is to be worked out. The engagement also states the functions the manager is required or authorised to carry out. The termination of a person’s engagement as body corporate manager may only occur in accordance with the requirements of sections 86 to 86C of the Standard Module, and certainly the committee does not have the power to terminate an engagement.

^[1] Section 37B(5), Standard Module.
^[2] Section 94(1), Act.
^[3] Section 94(2), Act.
^[4] Section 95, Act.
^[5] Section 152, Act.
^[6] Section 95(2), Standard Module.
^[7] Section 10, Standard Module

(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.

1.	Invalidate the Annual General Meeting held in November 2002.
2.	No proper notice of Annual General Meeting, section 43 allows for 21 days.
3.	The motion to renew the engagement of a person as a body corporate manager at the annual general meetings held in 2002, 2003 and 2004 be overturned, and the subsequent contract be declared invalid and unenforceable.
4.	Any subsequent contract signed as a result of this authorised motion should be declared invalid and unenforceable.
5.	The body corporate breached the requirements for valid motions to renew the manager’s contract which are meant to be the last item on the agenda.

Queensland Body Corporate and Community Management Commissioner - Adjudicators Orders

Views Over Lamington [2005] QBCCMCmr 679 (1 December 2005)