Runaway Oasis South [2006] QBCCMCmr 36 (30 January 2006)

Last Updated: 19 July 2006

REFERENCE: 0702-2005

ORDER OF AN ADJUDICATOR

MADE UNDER PART 9 OF CHAPTER 6

BODY CORPORATE AND COMMUNITY MANAGEMENT ACT 1997

Number of Scheme:	30650
Name of Scheme:	Runaway Oasis South
Address of Scheme:	564 Oxley Drive RUNAWAY BAY QLD 4216

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

Maria Anna Gac, the owner of lot 4

I hereby order that the application by Maria Anna Gac, the owner of lot 4, for an order declaring the ordinary meeting of the body corporate held by the developer on the 7th July 2003 as valid, or in the alternative, to determine the long term future of the turret, is dismissed.

STATEMENT OF ADJUDICATOR’S REASONS FOR DECISION - REF 0702-2005

"Runaway Oasis South" CTS 30650

The applicant, Maria Anna Gac, the owner of lot 4, has sought the following order of an adjudicator under the Body Corporate and Community Management Act 1997 (the Act) quote:

Declare the ordinary meeting of the body corporate held by the developer on the 7^th July 2003 as valid.

The applicant subsequently sought to amend the application to have the adjudicator "determine the Turret’s long term future". By this the applicant seeks that:

The unresolved issue is the turret’s long term future. Should the adjudicator decide that the body corporate meeting held by the developer on the 7^th July 2003 was in fact invalid, the arguments over who would be entitled to the turret in the future will continue. This is why we would take the opportunity to ask the adjudicator to make a ruling on that at the same time.

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)).

The scheme is a subdivision of 9 lots. The regulation module applying to the scheme is the commercial module.

Delay in the making of the application

The applicant has included in her grounds a statement of reasons for "lodging the application outside the required 3-months time limit. The applicant is referring to the requirements of section 242 of the Act, which provides as follows:

242 Time limit on certain applications
(1) This section applies to an application for an order declaring void--
(a) a meeting of the committee for the body corporate, or a general meeting of the body corporate; or
(b) a resolution of the committee or body corporate; or
(c) the election of an executive or other member of the committee.
(2) The application must be made within 3 months after--
(a) if subsection (1)(a) applies--the meeting; or
(b) if subsection (1)(b) applies--the meeting at which the resolution was passed or purported to be passed; or
(c) if subsection (1)(c) applies--the meeting at which the executive or other member was elected.
(3) However, if the making of the application does not comply with subsection (2)--
(a) the commissioner must deal with the application (including making a dispute resolution recommendation for the application) as if the making of the application complied with subsection (2); and
(b) an adjudicator to whom the application is referred for specialist or department adjudication may, for good reason, waive the non-compliance.

However, the requirements of this section have no application here. The section applies to an application seeking to declare a meeting, resolution or election void. In the present case, the applicant seeks a declaration that a meeting was valid. In this, the applicant has a different problem to confront. Adjudicators of this office have routinely held that, as a matter of practice and practicality, applications seeking the validation of a resolution, meeting or election should not be considered. The basis of this practice is as set out in the order for application 371 of 2002, quote:

Adjudicators of this office have established a principle regarding applications which seek to validate, rather than invalidate, either a meeting, or certain aspects of a meeting. The basis for this principle was set out in an order to a previous application (No. 0708 of 1998). That order provided in part as follows, quote -

In effect, the applicant seeks a declaration that the meeting has been validly convened. The resources of this office are not such that this office is able to undertake a complete investigation, particularly at an interim stage, of all aspects of the meeting, and declare it to have been validly convened, as the applicant seeks. If this office adopted the course of action sought of it by the applicant, then I consider that this would lead to multiple similar applications, which would be beyond the resources of this office.

Rather, I consider the onus is upon the applicant as the secretary having convened the meeting, to ensure that requirements of the Act and Standard Module were complied with, and provided the applicant has done this, then the meeting will presumably withstand any challenge directed at its validity by others. I consider that it is in this latter scenario that this office should involve itself. That is, if there is a challenge to the validity of the meeting after it having been convened or held, then this office should investigate such challenge, and make such orders as considered appropriate. ...

I acknowledge that the current application seeks only to validate one motion carried at a meeting, and not the meeting per se. Nevertheless, I consider the principle to be equally applicable. If this office were to investigate meetings with the view to declaring them to be procedurally valid, then this approach would invite many applications seeking this declaration, particularly where there are ongoing levels of disputation within schemes (of which there are many).
Investigating such applications would in itself be problematic in that there would be no clear focus of the particular investigation. By necessity, it would need to consider each and every aspect of the procedure for convening and holding the meeting, before any declaration as to the validity of the meeting could be given. In contrast, where an application seeks to invalidate a meeting, then the basis of invalidation is (usually) stated, and it is this particular basis on which the investigation focuses.
To adopt the approach of investigating the validity of meetings, rather than allegations of their invalidity, would exhaust the resources of this office, due both to the number of such applications which might be made, and further, the necessary breadth of such investigations.
If any owner considers the meeting, or any aspect of it, to be invalid or not in compliance with the legislation, they are entitled, subject to the time limits set out in section 193 of the Act, to make application to this office seeking invalidation, either of the meeting or the particular aspect. Until such time as an application is made, and there is an order in respect of that application, I consider a body corporate is entitled to proceed on the assumption that the meeting, or aspect, is valid. If it were otherwise, then bodies corporate would not be able to operate effectively.

I see no reason to depart from this position or practice in the circumstances of this application. Moreover, the meeting in question was held over 2.5 years ago. This provides a compelling further reason not to re-open the matter; namely the time which has elapsed.

However, there is a compelling legal reason why, even if the meeting were validly called and convened, the resolution arising from the meeting is of no effect. There is evidence before me in the applicant’s own material which indicates that the use of the power of attorney by the original owner of the lots provided for in the contract was restricted to certain purposes, including:

• The adoption of the commercial module;
• The adoption of certain by-laws;
• To grant easements over common property required by the Gold Coast City Council, and
• "The allocation of exclusive use rights to use pylon signs within the common area of the body corporate area of the body corporate adjoining the land".

The motion resolved at the meeting on 7 July 2003 purports to grant a licence. This is not within the contemplation of the purposes for which the power of attorney might have been used. So, whilst I will not consider the question of the validity of the meeting, I suggest that even if the meeting were validly called and held, the resolution could not have been valid in any event for the reason that it resolved something which was ultra vires the purposes for which the power of attorney might have been used as per the contract. I further consider that it should have been clear that any signage rights over common property should have been created by way of exclusive use by-law, and it is clear that the power of attorney might have been used for this purpose. However, there is no evidence that such a by-law was ever resolved and subsequently recorded, as is required under the legislation.
The applicant’s application for a declaration that the meeting of the body corporate held by the developer on the 7^th July 2003 is valid, is dismissed.

The applicant has further requested an order that I determine the unresolved issue is the turret’s long term future. The applicant alleges that "the arguments over who would be entitled to the turret in the future will continue (and I) to ask the adjudicator to make a ruling on that at the same time".

I consider that in fact there is no dispute as to the turret’s long term future. It is part of the common property for the scheme. The Act and applicable module sets out mechanism’s and processes by which by common property might be utilised or dealt with. I consider that until such time as signage rights in respect of the turret are allocated by way of exclusive use to an owner, then the turret is simply part of the common property, which the body corporate have the duty to administer manage and control. It is not my role to pick a winner so to speak, or who might be allocated exclusive use and I will not do so.

Whilst the applicant might feel aggrieved by this decision, I consider that the applicant’s dispute is perhaps more properly with the developer for potential breach of contract rather than with the body corporate as per this application. This is an entirely different dispute in a different jurisdiction. This application is dismissed in its entirely.