No. 9 Port Douglas Road [2006] QBCCMCmr 153 (27 March 2006)

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

I hereby order that, in respect of the request for an extraordinary general meeting given to the secretary on 13 March 2006, the body corporate for No. 9 Port Douglas Road is allowed to delay the giving of notice for and the holding of the requested extraordinary general meeting provided that the meeting is held immediately prior to the upcoming annual general meeting and notice of the requested extraordinary general meeting is given at the same time as notice of the annual general meeting.

I further order that motion 14 for the requested extraordinary general meeting proposing appointment of Body Corporate Services Pty Ltd as body corporate manager is to be included on the agenda and voting papers for the annual general meeting instead of the requested extraordinary general meeting.

This is an interim order and will remain in effect for a period of not longer than six months. It is the responsibility of the applicant to apply to extend this order if no final determination has been made within that period. This order will automatically lapse upon a final order being made or this application being withdrawn.

STATEMENT OF ADJUDICATOR’S REASONS FOR DECISION - REF 0198-2006

"No. 9 Port Douglas Road" CTS 24368

No. 9 Port Douglas Road Community Titles Scheme (PDR) is an 18 lot scheme under the Body Corporate and Community Management Act (Act) and the Act’s Accommodation Module Regulation (Accommodation Module). The scheme is described as a warehouse/office/residence converted to an 18 unit complex.

This is an application for interim orders. The body corporate (applicant) has brought this application. The background to this dispute is that Bruce Le Cornu, owner of lot 11 (respondent) has served a notice on the body corporate that is signed by over 25% of lot owners and requests that an extraordinary general meeting be held on 10 April 2006. The body corporate has lodged this application requesting that it be excused from calling this meeting as an annual general meeting is proposed for 22 April 2006.

The legislation requires that the body corporate must call an extraordinary general meeting within 14 days of receipt of a notice signed by at least 25% of owners requesting the extraordinary general meeting and that the extraordinary general meeting must be held within 6 weeks after the notice is given to the body corporate (Accommodation Module, 59).

The body corporate has, however, indicated that it does not wish to call this meeting as committee members consider it will be a waste of time and money because an annual general meeting is proposed for 22 April 2006 and all matters proposed for the extraordinary general meeting could be properly dealt with at that time. An adjudicator is required to make an order that is just and equitable in the circumstances to resolve a dispute (Act, 276). In particular, an interim order may be made if necessary because of the nature or urgency of the circumstances to which the application relates (Act, 279). Provided the order is "just and equitable" there are circumstances in which an adjudicator can relieve the body corporate from a particular requirement of the regulation module.^[1] In this instance I am required to consider whether it is appropriate to temporarily relieve the body corporate from the requirement to call this meeting.

The notice requesting an extraordinary general meeting contains a motion to confirm minutes of the previous general meeting, 11 motions proposing changes to committee membership, a motion to invalidate or otherwise overturn a resolution appointing Ross Hurst as acting body corporate manager, and a motion proposing appointment of Body Corporate Services Pty Ltd as body corporate manager for a term of one year.

None of these motions appear significantly urgent to justify the expense and inconvenience of an extraordinary general meeting only a couple of weeks prior to a planned annual general meeting. In particular, the respondent has indicated that not all motions need to be considered at an extraordinary general meeting. However, submissions are made to the effect that the majority of owners do not have faith in the present committee and an extraordinary general meeting is desired to be held prior to the annual general meeting to ensure that the committee the body corporate has a committee that acts in the best interests of the majority of owners at the time the annual general meeting is to be held.

One concern with the respondent’s submissions is that there is no guarantee that the extraordinary general meeting would be held before the annual general meeting anyway. The respondent has requested that the extraordinary general meeting be called for 10 April 2006. However, the committee can determine the date of any requested extraordinary general meeting provided it is within 6 weeks of the notice requesting the general meeting being given. The notice appears to have been received by the secretary on 13 March 2006 which would allow a meeting at any date before 24 April 2006.

At the proposed annual general meeting on 22 April 2006 owners will have an opportunity to elect new committee members and it seems unnecessary to plan to hold an extraordinary general meeting to elect new committee members either immediately prior to or immediately after that annual general meeting.

In particular, the respondent appears to overestimate the discretion of the committee in relation to the holding of an annual general meeting. The respondent makes submissions to the effect that it is important to hold an extraordinary general meeting to have a committee that acts in the best interests of the majority of owners for the conduct of the annual general meeting. However, at an annual general meeting all decisions are made by owners rather than committee members. Submissions indicate that owners have only until 31 March 2006 to submit nominations and motions and the only substantive decisions that can be made at the annual general meeting must be based on motions that will have been submitted by 31 March 2006 or submitted by the committee prior to the notice of annual general meeting being sent. Electing a new committee just prior to the annual general meeting cannot affect any decisions made by owners at the annual general meeting.

All committee nominations are to be made by 31 March 2006. Each owner can only nominate one individual for committee membership but can nominate that individual for multiple positions. Typically, each owner wanting to serve on the committee will nominate themselves for one or more of the executive member positions and also as an ordinary member. Further, all motions submitted by owners must be submitted by 31 March 2006. Typically each motion will need to specifically detail all relevant matters, include quotations, and include the raising of a special levy if insufficient funds are budgeted. Some types of motion will have additional specific requirements detailed in the legislation. Given the allegedly serious problems affecting this scheme, including an allegedly defective roof, it is surprising that owners seeking an extraordinary general meeting have not submitted a proposals and quotations for rectifying those issues so that all owners can vote on the issues at the extraordinary general meeting. I can only assume that these owners instead propose to submit the motions for consideration at the annual general meeting.

The secretary is required to include all submitted motions on the voting papers for the annual general meeting regardless of whether the proposed motion complies with the legislation or whether the secretary personally agrees with those motions.^[2] At the annual general meeting itself, it is only the chairperson who has a legislated role. However, traditionally, any decision of the chairperson of a procedural nature can be overruled by a majority of owners present at the meeting. Further, the right of a chairperson to rule a motion out of order only exists in very limited circumstances and this right itself can be overturned by vote of the majority of owners present (Accommodation Module, 45(3)).

If the annual general meeting was to be held on 22 April 2006 and the extraordinary general meeting was to be held the following day then there would appear little benefit in holding the extraordinary general meeting. However, some submissions suggest that the annual general meeting was to be held on 28 April 2006 instead of 22 April 2006 and the proposed date of the annual general meeting was brought forward simply to allow the annual general meeting and extraordinary general meeting to be held on the same date. In particular, it is submitted that there is insufficient time to give proper notice of the annual general meeting by 22 April 2006 and that owners have made prior arrangements to allow them to attend on 28 April 2006.
In the circumstances, in order to minimise expense and inconvenience, it seems just and equitable that I make an order that will facilitate the body corporate holding both the extraordinary general meeting and annual general meeting on 28 April 2006 and sending the notices for both meetings at the same time. The extraordinary general meeting should be held prior to the annual general meeting and owners can then have an opportunity to choose whether they wish to change the committee prior to the meeting. If owners vote to elect a new chairperson then that person will chair the annual general meeting. Otherwise, the existing chairperson will chair the meeting.

One concern remains about the proposal to engage a body corporate manager at the extraordinary general meeting. Where multiple body corporate managers are proposed owners are meant to be given an opportunity to choose between alternative managers (Accommodation Module, 40B). The purpose of this provision would be defeated if a manager was appointed at the extraordinary general meeting and owners were therefore deprived of voting for alternative managers at the subsequent annual general meeting. On a just and equitable basis I will therefore order that motion 14 proposing the appointment of Body Corporate Services Pty Ltd for consideration at the extraordinary general meeting be instead included on the agenda for the annual general meeting along with any alternative proposals.

For these reasons, I make the interim order above.

The application will be allowed to proceed to submissions and a final determination in the normal course.

^[1] Holloway, Wilson and Watts v Meek, Dodds DCJ, District Court (Maroochydore), Appeal 22/1998, 24 December 1998.
^[2] Subject to very limited exceptions (Accommodation Module, 39(4)).

Number of Scheme:	24368
Name of Scheme:	No. 9 Port Douglas Road
Address of Scheme:	9 Port Douglas Road PORT DOUGLAS QLD 4871

Queensland Body Corporate and Community Management Commissioner - Adjudicators Orders

No. 9 Port Douglas Road [2006] QBCCMCmr 153 (27 March 2006)