No. 9 Port Douglas Road [2006] QBCCMCmr 203 (24 April 2006)

Last Updated: 19 December 2006

REFERENCE: 0268-2006

INTERIM ORDER OF AN ADJUDICATOR

MADE UNDER PART 9 OF CHAPTER 6

BODY CORPORATE AND COMMUNITY MANAGEMENT ACT 1997

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

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

Michael McEvoy, the Owner(s) of lots 9 and 16

I hereby order that motions 2, 3 and 4 to be considered by secret ballot as part of a proposed extraordinary general meeting on 28 April 2006 may be voted upon but are not to be put into effect and will not have the effect of terminating or repudiating the caretaking agreement pending a final determination of this dispute. 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 This order will automatically lapse upon a final order being made or this application being withdrawn.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 0268-2006

"No. 9 Port Douglas Road" CTS 24368

Interim Application

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. Michael McEvoy, an owner of lots 9 and 16 (applicant) has brought this application against the body corporate (respondent). The body corporate is proposing to hold an extraordinary general meeting and an annual general meeting on the same day, 28 April 2006. The applicant complains, in particular, that the agenda for the extraordinary general meeting requested by over 25% of lot owners has been altered by the committee and that new motions have been added to that agenda. It is submitted that the extraordinary general meeting may need to be cancelled for these reasons and because insufficient notice was given. In particular, motions 2, 3, and 4 are currently subject to a dispute application and motions 7 and 8 do not include quotations. An interim order is sought that motions 2, 3 and 4 are not acted on by the committee until this application is finally determined.

Submissions by Ross Hurst, on behalf of the body corporate, are to the effect that the committee has met its obligations in calling the meetings, meeting dates and schedules were set by adjudication, any late notice was because mail deliveries in Port Douglas are slow, motions were included in the extraordinary general meeting because that was the next general meeting at which to include those motions, and some motions were altered to be alternative motions as required by the legislation.

Decision

Interim Order

An interim order will not be granted unless is it necessary due to the nature or urgency of the circumstances to which the application relates (Act, 279). Further, any orders granted must be just and equitable in the circumstances (Act, 276).

The applicant is seeking an interim order to stop the body corporate implementing three motions proposing the termination of the caretaking agreement. To assist me in determining whether it is just and equitable to grant relief at this stage, before full and final consideration of all the issues raised, I consider it relevant for me to briefly consider whether the application raises any serious legal question.

If the application raises a serious legal question then it may be appropriate to preserve the existing state of affairs pending the final determination. It is relevant to consider whether the likely inconvenience should no interim order be granted outweighs any inconvenience likely to result from the interim order. In particular, it is relevant to consider whether an interim order is necessary to prevent something occurring that cannot be adequately redressed by final orders.

Question of technical non-compliance

A serious legal question has been raised, at least regarding whether owners have been given adequate written notice of the meetings. However, this would not seem to justify preventing the extraordinary general meeting from occurring. In particular, mere technical non-compliance with the legislation will not necessarily invalidate meetings. Rather it seems more appropriate that owners be entitled to vote on the matters in issue and any vote of owners only be overturned if, on a final determination, submissions indicate some real prejudice was suffered by owners rather than the breach merely being of a minor technical nature.

It appears that the real basis for this application is a concern that some owners will suffer real prejudice because the present committee has arranged the agenda and will conduct the meeting so as to manipulate the result. Any concern of this nature appears to overestimate the discretion of the chairperson in holding a general meeting. In particular, if the majority of owners present object to a procedural ruling of the chairperson then those owners can vote to overrule the chairperson.

Further, the agenda and voting papers appear to be generally prepared in a thorough manner and in a way that will give owners the opportunity to choose between alternative motions in the manner required by the legislation. Some confusion may result from some motions being added to the extraordinary general meeting agenda rather than the annual general meeting agenda but any concern that the committee has manipulated the agenda may have an innocent explanation including that some motions were submitted too late to be included on the annual general meeting agenda.

Placing motions on hold pending a final determination

The applicant has shown at least a technical basis upon which he should be entitled to an order putting motions 2, 3, and 4 on hold. I will grant this order, particularly due to potentially significant consequences to the body corporate if it wrongly terminates or repudiates the caretaking agreements. In this respect, it is not clear whether the body corporate has received legal advice or whether owners voting on this motion have had the opportunity to review any legal advice on the right to and consequences of termination. However, I am not satisfied there are any grounds for stopping the vote merely because the subject matter is, or may subsequently be, a dispute subject to adjudication.

As a final matter, I would encourage all owners to consider thoroughly all motions proposed at both meetings and consider how they propose to exercise their vote. If in doubt, owners may wish to speak to other owners and committee members and obtain their own independent advice. I am aware there are a large number of disputes between owners presently and I am hopeful that the upcoming meetings will allow the management of the scheme to move forward in a manner that complies with the legislation and is supported by the majority of owners.

Order

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.