Mooretellar Place [2006] QBCCMCmr 139 (20 March 2006)

Last Updated: 19 July 2006

REFERENCE: 0125-2006

ORDER OF AN ADJUDICATOR

MADE UNDER PART 9 OF CHAPTER 6

BODY CORPORATE AND COMMUNITY MANAGEMENT ACT 1997

Number of Scheme:	20082
Name of Scheme:	Mooretellar Place
Address of Scheme:	3-5 Moore Street MILTON QLD 4064

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

Leslie Kostellar, the owner of lot 1 and Bobbie Kootsookos, the representative of Petalex Pty Ltd, the owner of lot 3

C G YOUNGI hereby order that – (1) Leslie Kostellar C/- Unit 2, 433 Ispwich Road, Annerley QLD is appointed Administrator to call, hold and chair an annual general meeting ("the meeting") of "Mooretellar Place" within three (3) months of the date of this order for the purpose of - • the consideration of motions included on the agenda of the meeting; and • the election of committee members. (2) The Administrator shall hold appointment for the period beginning from the date of this order until the close of the meeting ordered to be held. I further order that - (a) within seven (7) days of the date of this order the administrator must give a copy of this order to each person whose name appears on the roll as the owner of a lot in the scheme. (b) each owner shall have fourteen (14) days from the date of this order to provide to the administrator their motions (if any) for inclusion on the agenda of the meeting, and provided the same are provided to the administrator within fourteen (14) days from the date of this order, then the administrator must include such motions on the agenda of the meeting to be convened by the administrator. (c) The administrator shall not give the notice of meeting to owners earlier than fourteen (14) days from the date of this order. further order that – (1) For the purpose of calling, holding and chairing the meeting, the Administrator shall have all the powers of the chairperson, secretary and treasurer of the body corporate, and of the committee, with the exception of the following powers - • to further delegate any of those powers to another person; or • to incur any expenditure apart from that necessary for the calling and holding of the meeting, except in regard to expenses that must necessarily be met and are capable of being authorised and incurred by a committee under the legislation. (2) The nomination and election procedures for the election of committee members shall be in the manner provided for in sections 14, 15 and 17 of the Body Corporate and Community Management (Standard Module) Regulation 1997. (3) The meeting shall be otherwise called and held as an annual general meeting in accordance with the Act and Standard Module, in particular Part 4 headed General Meetings and all other provisions relating to meetings under the Standard Module.2y2n

STATEMENT OF ADJUDICATOR’S REASONS FOR DECISION - REF 0125-2006

"Mooretellar Place" CTS 20082

The applicant, Leslie Kostellar, the owner of lot 1 and Bobbie Kootsookos, the representative of Petalex Pty Ltd, the owner of lot 3, have sought the following order of an adjudicator under the Body Corporate and Community Management Act 1997 (the Act) quote:

We seek an order appointing Mr Leslie Kostellar as Secretary with a brief to convene a general meeting and compile adequate body coporate records. ...

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)).

Specifically, without limiting the power of an adjudicator to make an order under section 276(1), an adjudicator may make an order appointing an administrator, and authorising the administrator to perform obligations of the body corporate, its committee, or a member of the committee under the Act or community management statement.

Section 301 of the Act deals specifically with the appointment of an administrator, quote:

301 Appointment of administrator
(1) This section applies if an order is made under this chapter appointing an administrator.
(2) The administrator has the powers given to the administrator under the order.
(3) Without limiting subsection (2), the power may include power to levy a special contribution against the owners of lots included in a community titles scheme to meet the cost of complying with obligations to which the order relates and the costs of the administration.
(4) The order may--
(a) withdraw all or particular stated powers from the body corporate, a body corporate manager to whom a power has been given under section 119 or 120, or stated officers of the body corporate
until the administrator has taken the necessary action to secure compliance with the obligations; and
(b) require officers of the body corporate or a body corporate manager mentioned in paragraph (a) to take stated action to help perform the work the administrator is required to perform; and
(c) fix the administrator’s remuneration.
(5) The administrator’s remuneration is to be paid out of the funds of the body corporate.
(6) This section does not apply to the enforcement of a monetary obligation of the body corporate arising under another Act unless it is an enforceable money order.

In the grounds to the application, the applicants state that:

Mooretellar Place is under standard format plan for which no general meetings minutes, body corporate roll or other essential documentation can presently be located, indeed, it seems doubtful that any general meeting was ever held or any recorded ever existed.
We seek an order appointing Mr Leslie Kostellar as Secretary with a brief to convene a general meeting and compile adequate body coporate records. The general meeting agenda should include motions for:
Adoption of budget and levies
Consideration of motions for/against audit
Consideration of insurance cover
Election of Office bearers

The applicants are the owners of two of the three lots in the scheme. The third owner, Judith Anne Morgan (nee Topping) and Adam Douglas Morgan (Morgan) were not parties to the application. In the circumstances, this office sought submission from Morgan as to their attitude to the application. Morgan has responded by way of submission. Relevantly that submission states:

During this phone call Ms Kootsookos raised the matter of "formalising" the body corporate ... . I asked that paperwork and proposed cost of this action be forwarded to me in order for me to make a decision as I was not prepared to verbally agree to this course of action without seeing supporting documentation.

We have not received any written correspondence directly from Ms Kootsookos, Mr Kostellar or agents acting on their behalf in relation to above matters. The letter dated 8 March 2006 received from the Office of the Commissioner for Body Corporate and Community Management was the first time that we have been notified that any matters concerning the "Mooretellar Place" body corporate are in dispute.

It is clear from the application, and confirmed by the submission of Morgan, that this body corporate is presently not complying with its statutory obligations, including the election of a committee, the holding of regular meetings, the establishment of administrative and sinking funds, and a host of other statutory requirements for the effective operation of the body corporate.

Whilst the applicants might only want to form a body corporate for the purposes of sale of one of their lots, and Morgan might consider it’s a choice whether or not to operate as a body corporate, the fact is that the law requires owners in community title schemes to operate as a body corporate in compliance with the relevant legislation.

Given this, I am satisfied that the order sought is required in order that this body corporate might constitute itself on a proper legal footing. On the issues of concern raised by Morgan (paperwork and proposed cost), I consider that the paper work should not be considerable in a small scheme such as this. On the second issue, cost, I can give no indication of this other than that it depends to some extent on how the body corporate chooses to operate its affairs. Certain costs are unavoidable (for example, body corporate insurances) whilst other costs depend on how the owners elect to operate their body corporate (eg. whether or not to engage a professional body corporate manager). As for the cost of the appointment made under the terms of this order, there is no cost for the convening of the meeting payable to the administrator appointed. The person appointed is not a professional body corporate manager who has sought appointment at a nominated price. In this regard, I note that Brisbay Pty Ltd, a body corporate manager, states that it acts on behalf of Kostellar and Kootsookos. Brisbay is not currently engaged by the body corporate. Consequently, any assistance Brisbay provides in the convening of the meeting to be held is to be at the cost of Kostellar and Kootsookos, and not the body corporate.

Management and other fees will only become payable by the body corporate if and when the body corporate determines to engage Brisbay or another body corporate manager, by ordinary resolution of the body corporate in general meeting. In this regard, I note that the vote of two of three owners would be sufficient to carry or pass such a resolution.

In the circumstances, I am satisfied that the appointment is necessary to authorise a person to call and hold an annual general meeting, and further, that there is no reason before me why the requested appointment of an administrator should not be made, but subject to the conditions I have imposed in the order. These conditions will ensure that the interests of all owners are protected, and that all owners will be afforded the opportunity to be notified of, and participate in, the general meeting to be convened by the administrator. After this meeting, it will be for the committee elected at the meeting to operate and manage the day to day affairs of the body corporate.