Kings Row South [2006] QBCCMCmr 12 (6 January 2006)

Number of Scheme:	11397
Name of Scheme:	Kings Row South
Address of Scheme:	18 Commodore Drive PARADISE WATERS QLD 4216

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

I hereby declare that the meeting convened on 29 December 2005 was a valid meeting of the committee.

I further declare the voting paper issued to owners on 30 December 2005 in respect of the Extraordinary General Meeting scheduled for 13 January 2006, was not issued in accordance with the Body Corporate and Community Management (Standard Module) Regulation 1997 and is therefore invalid.

STATEMENT OF ADJUDICATOR’S REASONS FOR DECISION - REF 0002-2006

"Kings Row South" CTS 11397

"Kings Row South" community titles scheme is registered on a building format plan and comprises 65 residential lots operating under the Body Corporate and Community Management (Standard Module) Regulation 1997 (the Standard Module).

The Application

The applicants are the Committee Chairman/ Treasurer and the Secretary seeking the following Interim orders against the body corporate:

(6) Voting paper issued to owners on 30 December 2005

The applicants further advise as follows:
An EGM has been set down for Friday 13 January 2006 and the items set down above are impacting on and causing confusion to owners, members of the body corporate.

Background

This application concerns the actions of an ordinary committee member, Dr Grose, who wrote to the Secretary on 21 December 2005 requesting the Secretary to hold a committee meeting on 29 December and enclosing an agenda for the committee meeting which was to consider a number of issues regarding an EGM scheduled for 13 January 2006.

The applicants advise that although the committee consists of 8 members (including the caretaker/ letting agent), Dr. Grose had only consulted with 3 other committee members in deciding to hold a meeting on 29 December. The Secretary, Chairman and another Committee member were unable to attend on 29 December and accordingly, the Secretary suggested that the committee meeting be held on 6 January 2006. This date was rejected by Dr. Grose for a number of reasons including the fact that the 6 January was a "work day" and that this date was too close to the date of the proposed EGM.

The committee meeting did in fact proceed on 29 December, following which Dr Grose advised all owners as follows:

The attached minutes of a committee meeting held on today’s date explain in some detail decisions taken by your committee in the absence of the Chairman and Secretary who were unavailable to attend the meeting.

The attached minutes include the following statements:

The meeting noted that under the BCCM Regulations section 41 does not place any time restrictions on submission of motions for an EGM .....

After discussion it was felt that the problem could be overcome by adding a motion to the EGM which would change the Community Management Statement and By Laws to state that owners cannot short term let their units for commercial gain......

Motion 3: That an open motion be added to the agenda of the EGM stating-
"Lot owners or their agents can rent their lots on a long term basis, defined as three months minimum. No short term or holiday letting for commercial return is permitted"....

The applicants state that the above orders are urgently required given the non-compliance with the time period provided for by the Standard Module regarding notice of the committee meeting and the notice period for distribution of Notices and papers for the EGM scheduled for Friday 13 January 2006.

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)).

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

(6) Voting paper issued to owners on 30 December 2005

This dispute resolution application was received on 3 January 2006 and has been referred to me pursuant to section 267 of the Act for consideration of whether an interim order should be made. 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. Given that the EGM is to be held on 13 January, and the attendant urgency of this application, it has not been possible to consult with the affected parties.

The first issue for consideration is whether there were any procedural errors in calling the committee meeting for 29 November 2005 which could justify the conclusion that the committee meeting and all resolutions purportedly carried at the meeting are invalid and of not effect. In this regard section 27 of the Body Corporate and Community Management (Standard Module) Regulation 1997 provides as follows:

Who may call committee meetings
(1) A meeting of the committee may be called by--

(b) in the absence of both the secretary and the chairperson--another member of the committee acting with the agreement of enough members to form a quorum at a meeting of the committee.

(2) The secretary or, in the secretary’s absence, the chairperson, must call a meeting if asked, in writing, to call the meeting by enough members of the committee to form a quorum at a meeting of the committee.

(3) The meeting must be held within 21 days after the secretary or chairperson receives the request to call it.

(4) If the meeting is not held within the 21 days, the meeting may be called by another member of the committee acting with the agreement of enough members to form a quorum at a meeting

(5) The secretary and chairperson may both be presumed to be absent if the request for the meeting, addressed to the secretary and chairperson, is given at the address for service

of the body corporate, and no reply is received within 7 days.

Having regard to subsections 27(1) & (2), the issues that arise for consideration are as follows:

On the material available I do not believe that the secretary and the chairperson were both absent and accordingly, I do not believe that subsection 27(1) is applicable.

However, it is possible that Dr. Grose was entitled to request the secretary to call a meeting under subsection 27(2) which provides as follows:

The secretary or, in the secretary’s absence, the chairperson, must call a meeting if asked, in writing, to call the meeting by enough members of the committee to form a quorum at a meeting of the committee.

The next matter for consideration is whether notice of the committee meeting was given in accordance with section 28 of the Standard Module. Although all committee members were aware of the intention to hold a committee meeting on 29 December 2005, the applicants advise that non-resident owners were wrongly informed that the committee meeting was to be held on 9 December and further, advice of the proposed meeting was not placed on the body corporate notice board.

The question that arises in this regard is whether this non-compliance with section 28 is so serious as to invalidate the committee meeting. A meeting is not automatically invalid for a failure to give proper notice. It is always a question of degree, and an adjudicator has discretion to make orders which are "just and equitable" for the resolution of a dispute. In an appeal decision (Wei-Xin Chen and Body Corporate for Wishart Village ), District Court Judge Boulton observed that:

The very detailed provisions of the standard module regulation to which I have referred above make it almost inevitable that from time to time there will be non-compliance. Equally though the provisions of the Act make it clear that non-compliance of an insubstantial nature will not be allowed to imperil the actions of bodies corporate or their committees, particularly in the instance of committees where actions are taken bone fide.

Given that a majority of committee members attended the meeting and all 4 members present voted in favour of the various motions, it would seem that the outcomes of the meeting would not have been different had the applicants been able to personally attend the 29 December meeting. Similarly, the failure to advise of the correct date to absentee owners and the failure to place advice of the proposed meeting on the body corporate notice board, are not in my view, sufficient to invalidate the meeting.

Validity of Proposed EGM Motion

Nevertheless, I do have significant concerns regarding Motion 3 –
That an open motion be added to the agenda of the EGM stating-
"Lot owners or their agents can rent their lots on a long term basis, defined as three months minimum. No short term or holiday letting for commercial return is permitted"....

Given that the committee meeting was held on 29 December 2005, and the EGM is scheduled for 13 January, I do not believe that this motion can be validly considered at the EGM. Sections 42 and 43 of the Standard Regulation Module anticipate that members of the body corporate will be given at least 21 days notice of any motion put to an EGM. In particular, section 43 provides that a general meeting must be held at least 21 days after notice of the meeting is given to lot owners.

The owner of each lot must be given at least 21 days notice of a general meeting (including an EGM). The notice must contain an agenda for the meeting which includes the substance of motions proposed for consideration. A general meeting may carry a resolution on a motion only if the motion is included as an item of business on the agenda and is stated in the voting papers accompanying the notice of meeting.

A further issue is that the proposed motion to restrict occupation by a tenant for less than 3 months in any calendar year may involve a restriction on the occupation of a lot and/ or discrimination and is contrary to the provisions of section 180(4) and 180(5) of the Act.

Section 180 relevantly provides as follows:
Limitations for by-laws......
(3) If a lot may lawfully be used for residential purposes, the by-laws can not restrict the type of residential use.......
(5) A by-law must not discriminate between types of occupiers.

I am therefore of the view that even if the proposed motion was carried at the EGM, it would be void and unenforceable.

Queensland Body Corporate and Community Management Commissioner - Adjudicators Orders

Kings Row South [2006] QBCCMCmr 12 (6 January 2006)