Six River Oak [2006] QBCCMCmr 369 (10 July 2006)

Last Updated: 19 December 2006

REFERENCE: 0388-2006

INTERIM ORDER OF AN ADJUDICATOR

MADE UNDER PART 9 OF CHAPTER 6

BODY CORPORATE AND COMMUNITY MANAGEMENT ACT 1997

Number of Scheme:	20147
Name of Scheme:	Six River Oak
Address of Scheme:	6 River Oak Drive HELENSVALE NORTH QLD 4218

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

Paul Doherty, the Owner of lot 2

I hereby order that pending the making of a final order, the Body Corporate is not to implement resolutions carried at the meeting held on 25 January 2006 and recorded in the minutes of the meeting.

STATEMENT OF ADJUDICATOR’S REASONS FOR DECISION - REF 0388-2006

"Six River Oak" CTS 20147

Application

The applicant, Paul Doherty, is the owner of lot 2 and has sought the following orders of an adjudicator under the Body Corporate and Community Management Act 1997 (the Act):

Final Outcomes

1. That the meeting of 25 February 2006 and the resolutions passed be invalidated.
2. That Australian Unit Administration Pty. Ltd. continue as Body Corporate managers for 6 River Oak CTS 20147.
3. That the body corporate deliver up all body corporate records including current certificate of insurance in compliance with the Body Corporate and Community Management Act 1997, to the applicant.

Interim Orders

That pending final order the Body Corporate be prevented from implementing the resolutions as contained in the minutes of meeting dated 25 January 2006.

The Scheme

The Six River Oak community title scheme consists of 4 lots registered on a standard format plan (previously known as a group title plan) and is regulated by the Standard Regulation Module.

Background

The grounds for requesting an interim order were set out in an attachment to the application . The applicant was concerned that if the resolutions carried at a meeting held on 25 February 2006 were allowed to be implemented, the present body corporate managers would be dismissed and there would be no mechanism to ensure compliance with the legislation.

The meeting held on 25 February was attended by the three other lot owners. The applicant did not attend the meeting and was not given proper notice of the meeting. The applicant states that he was not given written notice of the meeting although at approximately 7:15 PM on Thursday 23 February 2006, he was approached by an occupier of lot 1 regarding advising him of the proposed meeting. During the following week he was again approached by the same person who asked him why he did not attend the meeting and accused him of "holding up proceedings". He also received a copy of the minutes of the meeting held on 25 February which recorded resolutions carried at the meeting including the following:

• the scheme would be managed without assistance from Australian Unit Administration Pty. Ltd. (AUA) and those present voted unanimously to manage the property themselves including responsibility for Maintenance; Mowing; Insurance; and Sinking Fund.
• A bank account would be opened for the sinking fund;
• Insurance would remain with the current insurer unless a better premium could be obtained elsewhere.
• Mowing would be done on a roster basis once o fortnight in summer and once a month in winter.
• A working bee would be held at least once a year at which all owners would attend to painting, cleaning and repairs.

Subsequently, on 28 February 2006 a "proposed budget for 2006-2007" was distributed to lot owners and contained the following information:

• Each unit is to contribute $500 per year, saving $400;
• Income $2,000 per year;
• Insurance $750;
• Balance $1,250 to cover repairs and maintenance;
• Balance to be rolled over into the following year.

Australian Unit Administration Pty. Ltd. Subsequently wrote to the lot owners advising

• That they were contracted until 31 May 2006;
• The organisers of the meeting had not given lot owners 21 days notice of the meeting as required by the Act;
• Levies were due for payment on March 1 2006 and if unpaid, lot owners would not be eligible to vote.

On 28 May Mr. Graham Yeates representing Australian Unit Administration Pty. Ltd. conducted the Annual General Meeting of the body corporate and acted as chairperson. The minutes of the meeting record the following:

• It was resolved that the minutes of the AGM held on 11 May 2005 be confirmed as true and correct;
• Accounts for financial year ended 28 February 2006 be adopted;
• Administrative fund contributions for the year ending 28 February be determined at $1,000 per unit of entitlement payable in 2 instalments of $350 and $600 respectively;
• The sinking fund budget for the year ending 28 February 2007 be adopted.

Submissions

Pursuant to section 243 of the Act, submissions were sought from all members of the body corporate in relation to the request for Interim Orders. The owners of lots 1 and 3 advised as follows:

• The meeting held on 25 February was for the benefit of all unit owners ;
• The owners of units 1, 3 & 4 attended;
• It was agreed that they would self-manage the body corporate and thereby save the $600 which they currently pay to Australian Unit Administration Pty. Ltd.

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

(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)).

Determination

The applicant has sought an interim order that pending final order the Body Corporate be prevented from implementing the resolutions as contained in the minutes of meeting dated 25 January 2006 i.e.

• That lot owners would manage the property themselves including responsibility for Maintenance; Mowing; Insurance; and Sinking Fund.
• A bank account would be opened for the sinking fund;
• Insurance would remain with the current insurer unless a better premium could be obtained elsewhere.
• Mowing would be done on a roster basis once o fortnight in summer and once a month in winter.
• A working bee would be held at least once a year at which all owners would attend to painting, cleaning and repairs.

Although there is no reason why a majority of lot owners cannot resolve to self-manage their complex, raise levies and prepare accounts etc., these arrangements need to be entered into in accordance with the relevant legislation: the Body Corporate and Community Management Act 1997and the Body Corporate and Community Management (Standard Module) Regulation.

It would appear that the meeting convened by lot owners on 25 February purported to be the Annual General Meeting for the body corporate. However, owing to non-compliance with legislative provisions, I am of the view that the meeting of 25 February 2006 and the resolutions purportedly passed are invalid.

In particular, it should be noted that under section 40 of the Standard Module, the secretary or other committee member authorised by the committee, may call a general meeting and the owner of each lot must be given at least 21 days written notice. section 42 of the Standard Module provides that written notice must be given to each owner of a lot in the scheme and if not given personally, must be sent to the owner’s nominated address for service. Further, section 43 of the Standard Module provides that a general meeting must be held at least 21
days after notice of the meeting is given to lot owners.

The notice must state the time and place of the proposed meeting, and must:

• Contain an agenda for the meeting prepared by the committee. which must include:

[diamond] the substance of the motions proposed by the committee for consideration at the meeting;

[diamond] the substance of the motions submitted by owners and required to be included in the agenda; and

[diamond] a motion to confirm the minutes of the previous general meeting;

• Include a proxy form.
• Include a voting paper which must:
[diamond] state each motion to be considered at the meeting;
[diamond] state the name and lot number of the person proposing the motion (if the motion is not
proposed by the committee);
[diamond] state the type of resolution required for each motion; and
[diamond] enable a voter to record a written vote on each motion to be considered at the meeting.
• Be accompanied by an explanatory schedule if necessary.

The agenda for an annual general meeting must provide for:

• presentation of statement of accounts for the previous financial year;
• adopting the administrative and sinking funds budgets for the next financial year;
• determining the contributions to be paid by lot owners for the financial year;
• determining whether the statement of accounts for the next financial year are to be
audited; and
• reviewing each insurance policy held by the body corporate.

Conclusion

Having regard to the above, it is evident that statutory requirements have not been complied with and I therefore propose to grant the requested Interim Order that
pending final order the Body Corporate be prevented from implementing the resolutions as contained in the minutes of meeting dated 25 January 2006.

The purpose of an Interim Order is to maintain the present situation or status quo , until the matter is resolved by way of final order.

Before making a Final Order, lot owners will be given the opportunity to make submissions regarding the final outcomes sought by the applicant which primarily relate to the re-appointment of Australian Unit Administration Pty. Ltd. to continue as Body Corporate manager for 6 River Oak.
Possible outcomes in this regard include the following possibilities:

• An order by an adjudicator that Australian Unit Administration Pty. Ltd. to continue as Body Corporate manager/ administrator until the date of the next AGM; or
• An order by an adjudicator that an extraordinary general meeting be properly convened and that the members of the body corporate make a decision at that meeting as to whether Australian Unit Administration Pty. Ltd. Should be re-appointed as Body Corporate Manager.

As a final note, I would like to point out to owners that the Commissioner’s Office provides information service for people involved in Queensland’s community titles scheme. While the information service cannot provide legal advice, officers do provide general information about
the Act and the regulation modules, primarily by responding to telephone enquiries. The information service has also produced a number of brochures on body corporate issues. The information service can be contacted on 1800 060 119 during business hours. The BCCM homepage also contains a wide range of information resources at http://www.dtftwid.qld.
gov.au/disputeres/bccm/.