Carmen [2005] QBCCMCmr 7 (7 January 2005)

Last Updated: 5 July 2005

REFERENCE: 0486-2004

ORDER OF AN ADJUDICATOR

MADE UNDER PART 9 OF CHAPTER 6

BODY CORPORATE AND COMMUNITY MANAGEMENT ACT 1997

Number of Scheme:	10757
Name of Scheme:	Carmen
Address of Scheme:	63 Neerim Drive Mooloolaba Qld 4557

TAKE NOTICE that pursuant to an application made under the abovementioned Act by Jocelyn Webster, the Owner of Lot 4

I hereby order that: 1. Archers Body Corporate Management Pty Ltd, 35 Dalton Drive Maroochydore, is appointed as Administrator to call, hold, and chair a general meeting (the meeting) of the "Carmen" Body Corporate in accordance with this order and within 3 months of the date of this order. 2. The Administrator shall hold the appointment for the period beginning on the date of this order, until the close of the meeting ordered to be held. I further order that for the purposes of the Body Corporate and Community Management Act 1997 (Act), the meeting shall be deemed to be an annual general meeting of the Body Corporate. I further order that for the purposes of calling and chairing the meeting, the Administrator shall have all the powers of chairperson, secretary and treasurer of the Body Corporate and of the committee, with the exception of the following powers- 1. To further delegate any of those powers to another person; and 2. To incur any expenditure apart from that reasonably necessary for the calling and holding of the meeting, and apart from expenses that must necessarily be met and are capable of being authorised and incurred by a committee under the legislation. I further order that within 7 days of the date of this order, Isobell Beikoff shall hand to the Administrator all books and records of the body corporate in her possession to enable the Administrator to call and hold the meeting so ordered. I further order that within 14 days of the date of this order, the Administrator shall issue each person who appears on the roll as an owner of a lot included in the scheme with a notice inviting each lot owner to nominate an eligible individual for election to the committee and to submit motions for consideration at the meeting and allowing at least 14 days for nominations and motions to be submitted. I further order that after the time allowed for owners to submit nominations and motions has expired: 1. The Administrator shall prepare an agenda for the meeting, including but not necessarily limited to, the matters set out in section 45 of the Body Corporate and Community Management (Standard Module) Regulation 1997 (Standard Module). 2. The Administrator shall issue a notice of the meeting in accordance with section 42 of the Standard Module. 3. Except as provided in this order, the meeting must be called and held in accordance with the Act and the Standard Module. I further order that the Administrator’s fees for this appointment payable by the body corporate will be $300.00 plus GST.

STATEMENT OF ADJUDICATOR’S REASONS FOR DECISION - REF 0486-2004

"Carmen" CTS 10757

APPLICATION

This application is by Jocelyn Webster, the owner of Lot 4 (applicant) seeking an order that an administrator be appointed. While the applicant did not initially include the name of a person to be appointed as an administrator, she subsequently advised this office that she was nominating Archers Body Corporate Management (ABCM). By letter dated 29 October 2004, Peter Cassells of ABCM agreed to an appointment for a period of either 6 or 12 months.

The applicant’s main submissions illustrated body corporate administration deficiencies such as:

• Motions passed at the annual general meeting held in November 2003 have not been implemented.
• Minutes have not been kept of an extraordinary general meeting held in January 2004.
• There is no sinking fund forecast.

JURISDICTION

"Carmen" Community Titles Scheme 10757 is a 5 lot 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:

(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)).

SUBMISSIONS

In accordance with the Act, submissions were called and a copy of the application was provided to the owner of each lot (excluding the applicant). A submission was received from Mr Preston who stated:

• While he supported the appointment of a body corporate manager, he did not support the appointment of ABCM as he has not been consulted and has not seen quotes from other managers.
• He would support a body corporate decision to engage a manager.

DETERMINATION

The applicant included with the application a copy of the minutes of the annual general meeting (AGM) dated 15 November 2003 and a copy of various correspondence between lot owners. Additional information requested by this office was supplied by the applicant and Mrs Beikoff, who currently has possession of the body corporate books and records. In addition, the applicant advised that the committee currently consists of two persons, Mrs Beikoff and Mr Preston, and that the end of financial year for the scheme is 30 September.

The body corporate must hold an AGM within three months after the end of its financial year. The Standard Module (prior to its amendment on 1 December 2003) required that the agenda for an AGM must provide for the:

•	Presentation of financial year accounts.
•	Audit of the accounts.
•	Approval of budgets of proposed expenditure from the administrative fund and the sinking fund.
•	Fixing of contributions to be paid by lot owners based on the adopted budgets.

It is evident from the information provided that the body corporate has not:

•	Held an AGM for 2004 in accordance with section 60 of the Standard Module which requires that meeting to be called and held within three months after the end of each of the scheme’s financial years. The body corporate should have held the AGM after 30 September 2004 and before 31 December 2004.
•	Been properly considering the statutory motions. While accounts may be presented, the minutes indicate that the body corporate does not adopt budgets, and therefore contributions are determined based on other criteria. In addition, there is no indication that the body corporate has, in the least 2 years, considered auditing of its financial statements.

In the circumstances, an order is necessary to appoint an administrator to enable the body corporate to hold this meeting and make decisions required by the legislation. The applicant has nominated ABCM to be appointed as administrator. While the applicant may have sought a longer term appointment, I have ordered that the appointment is limited to convening and holding the AGM for 2004. Peter Cassels of ABCM has, by letter dated 22 December 2004, accepted an appointment to hold an AGM for a fee of $300 plus GST. I consider this fee to be paid by the body corporate to be reasonable.

Therefore, I have ordered that ABCM be appointed to convene a proper AGM of the body corporate. It should be noted that the appointment lasts until the close of the meeting ordered. I have also ordered that Isobell Beikoff hand all the books and records of the body corporate to ABCM to enable the proper convening and holding of the AGM.

Lot owners will be given the opportunity to submit motions to the meeting. Therefore, an owner wishing to submit a motion or motions must respond to the notice given by the Administrator under the terms of this order. The motion or motions must be submitted in writing to the Administrator and must be in accordance with the requirements of the Act and the Standard Module. For instance, when submitting a motion proposing the engagement of a body corporate manager, the owner must include material about the proposed terms of the engagement which should be in the form of a copy of the proposed body corporate management agreement.

Even if owners intend to engage a body corporate manager, they need to recognise the legislative requirements about the composition of the committee. A committee is still required to be chosen if the body corporate authorises a manager to perform some or all of the powers of an executive member of the committee. The committee must consist of a chairperson, secretary and treasurer and ordinary members (if any). The number of persons on the committee must be at least 3 and no more than 5.

If the owners do not want to choose a committee, then they can authorise a manager to exercise the powers of the committee and the executive members of the committee. Sections 37B to 37F of the Standard Module provide for the engagement of a manager to carry out these functions.

The applicant has also made reference to the financial administration of the body corporate. Lot owners need to be aware of their obligations with respect to the financial management of the body corporate, of which they are the members. Section 94 of the Standard Module provides that the body corporate must prepare an administrative and sinking fund budget each financial year. The budgets forecast anticipated expenditure and form the basis for setting the annual contributions payable by the owner of each lot to the administrative and sinking funds. The administrative fund budget contains estimates for recurring expenditure for each financial year such as insurance, administrative costs and maintenance expenses. The sinking fund budget must have regard to anticipated capital or non-recurrent expenditure over a period of at least 10 years. The basic purpose of the sinking fund is to accumulate funds to meet major expenditure at identified time intervals. Section 105 of the Standard Module requires the body corporate to prepare for each financial year a statement of accounts showing the income and spending (or receipts and payments) of the body corporate for the financial year. Amongst other things, the statement of accounts must include the corresponding figures for the previous financial year, unless the statement is for the body corporate’s first financial year. Section 106 provides that the body corporate must have its statement of accounts for each financial year audited by an auditor unless the body corporate resolves by special resolution not to have the statement audited.

Lot owners should also note that there are 4 modules under the Act which cater for bodies corporate with different features or circumstances. The Standard Module contains the most regulation. The Body Corporate and Community Management (Small Schemes Module) Regulation 1997 (Small Schemes Module) is aimed at schemes of less than 6 lots. This module provides less regulation for smaller schemes, especially in relation to committees and general meetings. For example, the Small Schemes Module allows votes at a general meeting to occur in a way the body corporate decides, and can include accepting a vote by telephone or electronic mail. If the owners would prefer less regulation, they should investigate and consider the requirements of the Small Schemes Module and decide whether its provisions would benefit the administration of this body corporate. Lot owners should be aware that the minimum requirements for adopting another regulation module include voting on an appropriate motion by special resolution at a general meeting, and if the motion is passed, lodging a new community management statement with the Department of Natural Resources, Mines and Energy.

Finally, I would like all owners to be aware that the Commissioner’s Office provides free information services for people involved in Queensland’s community titles schemes. While the Information Service cannot provide legal advice, it does provide general information about the Act and the regulation modules including by responding to telephone enquiries. The Information Service has also produced a number of brochures on body corporate issues. The Information Service can be contacted on 1800 060 119 during business hours.