Hemmant Village [2006] QBCCMCmr 10 (5 January 2006)

Last Updated: 19 July 2006

REFERENCE: 0854-2005

INTERIM ORDER OF AN ADJUDICATOR

MADE UNDER PART 9 OF CHAPTER 6

BODY CORPORATE AND COMMUNITY MANAGEMENT ACT 1997

Number of Scheme:	22717
Name of Scheme:	Hemmant Village
Address of Scheme:	19 Doughboy Parade HEMMANT QLD 4174

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

Peter Griep, director of Nadco Pty. Ltd. the Owner of lot 42, 63, 65, & 66

I hereby order that the application for an Interim Order To declare a committee meeting of 11 November 2005 invalid and to put all resolutions of the meeting on hold is dismissed.

STATEMENT OF ADJUDICATOR’S REASONS FOR DECISION - REF 0854-2005

"Hemmant Village" CTS 22717

The Scheme

"Hemmant Village" community titles scheme is registered as a standard format plan and comprises 82 residential lots operating under the Body Corporate and Community Management (Accommodation Module) Regulation 1997 (the Accommodation Module).

The Application

The applicant is the sole director of Nadco Pty. Ltd., the Owner of lot 42, 63, 65, & 66 and is seeking the following orders against the body corporate:

Interim Order:

1. To declare a committee meeting of 11 November 2005 invalid and to put all resolutions of the meeting on hold.

Final Order:

1. To declare the body corporate committee dysfunctional and to call an election of a new committee as soon as possible.

2. To declare a committee meeting of 11 November 2005 invalid.

Background

The applicant is the previous Chairman of the body corporate and in recent years has had a number of concerns with the management of the body corporate which are listed as follows:

• Unequal lot entitlements;
• Powers of the caretaker;
• "Unwarranted expenditure outside the budget with the danger of emptying the sinking fund and increasing body corporate levies".

More specifically, the applicant claims that at a committee meeting held on 15 July 2005 a motion was carried to hold the next meeting on 4 November 2005. However at an emergency meeting of 5 August 2005, the date for the next committee meeting was recorded in minutes as 4 October 2005. Strata Solutions later confirmed that the meeting was scheduled for 4 November, but subsequently, the meeting date was changed to 11 November without notifying the applicant and another committee member. The meeting was held on 11 November notwithstanding that three of the 5 members sought to change the date of the meeting. It is claimed that although some of the motions submitted by the applicant were discussed at the 11 November meeting, these motions were ruled out of order by the Chairman, and other motions submitted by the applicant were completely ignored.

On or about 8 October 2005 a meeting by postal vote was proposed but allegedly without consulting the applicant and another committee member. The applicant has also raised concerns regarding the agreement entered into between the body corporate and the caretakers. A firm named Wellners Solicitors was engaged to prepare a new agreement in 2004. However at the committee meeting of 11 November 2005 it was resolved to accept an agreement prepared by the caretakers’ solicitor at the cost of the body corporate, subject to vetting by a solicitor nominated by strata Solutions.
Submissions

Submissions were received from the resident caretakers, the Chairperson of the Committee, and two interstate owners.

The resident caretakers made the following submissions:

• the "unbudgeted expenditure" relates to their efforts in improving the functioning and appearance of the village;
• they reject the allegation of collusion with Strata Solutions and point out that they need to communicate frequently with the body corporate manager regarding invoices, by-laws, agenda items for meetings and general advice;
• They are obliged to comply with directions by the Committee;
• It had been resolved some years previously that the complex should be governed by the Accommodation Module Regulation, under which the parties could enter into a caretaking agreement for a period of 25 years. However there had been delays in attending to these matters owing to the failure to lodge a new Community Management Statement;
• It is submitted that Wellners solicitors were engaged by the applicant rather than the body corporate committee and that they engaged a solicitor owing to the inordinate delay in preparing a new agreement.

The body corporate committee made the following submissions:

• Like the resident caretakers, the Committee also needs to communicate frequently with the body corporate manager;
• The notice of meeting and agenda for the 11 November meeting were mailed to committee members within the required timeframe. A proxy vote was received from the applicant but the person to whom the proxy was allocated was not present at the meeting;
• It is acknowledged that sinking fund levies incorrectly included a component to pay for external painting of units. However, as the monies had been collected and half of the village had already been painted, it was decided that the painting work would go ahead and the practice would be discontinued thereafter.
• At the committee meeting held on 11 November 2005 it was resolved to appoint a Solicitor to vet the contracts received from the caretakers’ solicitors.

The submissions from 2 interstate owners supported the application but were brief, contained little detail and consisted of less than half a page each.


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

(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)).

Further, Sub-sections 279(1) & (2) provide:

(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. ...


Determination

This dispute resolution application has been referred to me pursuant to section 267 of the Act for consideration of whether an interim order should be made. At this point in time I am concerned with the threshold issue of whether because of the nature or urgency of the circumstances relating to the application, an interim order is in fact necessary or appropriate. While the range of matters that might be the subject of an interim order is not capable of definition, the applicant does need to establish that the circumstances of the application warrant the making of an interim order.

The Applicant has sought the following Interim Order:

1. To declare a committee meeting of 11 November 2005 invalid and to put all resolutions of the meeting on hold.

The first issue for consideration is whether there were any procedural errors in calling the meeting for 11 November 2005 which would justify the conclusion that the committee meeting was invalid and that all resolutions purportedly carried at the meeting are invalid and of not effect.

Although the applicant claims that proper notice was not given, the committee submits that notices of the 11 November meeting were mailed to committee members within the required timeframe and a quorum was present for the purposes of holding the meeting. The committee also advises that a proxy vote was received from the applicant but the person to whom the proxy was allocated was not present at the meeting.


Conclusion

Having considered the application and submissions, I am not persuaded that the nature or urgency of the circumstances justifies the making of an interim order and I have therefore dismissed the Applicant’s request for an Interim Order. I will now refer this application back to the Commissioner to be administered in accordance with the Act and the normal processes of this Office. The matter will be finally determined in due course and affected parties will have an opportunity to make further written submissions about the application.


I would point out however, that at this stage I am concerned by the applicant’s claim that although some of the motions submitted by the applicant were discussed at the 11 November meeting, these motions were ruled out of order by the Chairman, and other motions submitted by the applicant were completely ignored. I would welcome further submissions from the Committee in this regard.