San Remo [2006] QBCCMCmr 420 (2 August 2006)

Last Updated: 19 December 2006

REFERENCE: 0236-2006

ORDER OF AN ADJUDICATOR

MADE UNDER PART 9 OF CHAPTER 6

BODY CORPORATE AND COMMUNITY MANAGEMENT ACT 1997

Number of Scheme:	11230
Name of Scheme:	San Remo
Address of Scheme:	22 Britannia Avenue BROADBEACH Q 4218

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

Tyre Treds Pty Ltd, the Owner(s) of lot 12

I hereby order that all decisions purported to be made under the heading of "General Business" at the annual general meeting of 17 March 2006, are invalid and of no effect.

STATEMENT OF ADJUDICATOR’S REASONS FOR DECISION - REF 0236-2006

"San Remo" CTS 11230

Application

The applicant has sought an order of an adjudicator under the Body Corporate and Community Management Act 1997 (the Act) to invalidate the annual general meeting of 17 March 2006.

Jurisdiction

San Remo CTS 11230 is a 12 lot scheme registered under the Body Corporate and Community Management Act 1997 and is operating under the Body Corporate and Community Management (Standard Module) Regulation 1997. Typically, this module is intended for residential arrangements.

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)).

Grounds

The applicant provides copies of the agenda for the annual general meeting and the resultant minutes.

His grounds are quoted as follows:

"The A.G.M. did deal with three specific matters all classified in the minutes as ‘General Business’ ...............

Item 1. Garden & Grounds

This details the appointment of ‘The Property Stylist’ as a contractor on a firm price of $65.00 per visit thus creating a funding commitment. Copy of quotation not supplied. No specification of works provided. Provision of "additional services" at unknown costs or hourly rate has also been approved. Another open ended funding commitment.

Item 2. Pool, Stairwells & Repairs and Maintenance

This details the appointment of Mr B Jones to continue with the above services. Acceptance of this contractor has been approved in the absence of any cost structure. An open ended financial commitment. Obtaining of a quotation for ‘cleaning of the pool and stairwells’ has been requested.

Item 3. Stairwells

This minute states, in part, ‘It was agreed to paint the stairwells’. This is a ludicrous statement. No cost structure or specification of works is provided. Does the work include walls only or walls and ceilings? Are handrails and balustrades included? Nobody knows however all those at the meeting agreed to the expenditure of an unknown amount of money!"

The applicant goes on to list some "results" he sees as appropriate, but I will limit my discussion to the outcome sort in the application.

Recorded Minutes

The actual minutes under the heading of "General Business" are as follows:

"Garden and Grounds

The meeting agreed to cancel the services of Mr B Jones regarding garden and grounds maintenance.

It was further agreed that the quotation received by ‘The Property Stylist’ at a cost of $65 per visit (description of works attached to quote) be accepted on a contract of one (1) visit per month for a period of twelve 912) months.

Any additional services requested will be an additional charge to the Body Corporate.

Body Corporate manager to arrange.

Pool, Stairwells & Repairs & Maintenance

The meeting agreed that Mr B Jones continue with the above mentioned services.

It was further requested that a quote be submitted for the cleaning of the pool and stairwells for the next twelve (12) month period.

Stairwells

It was agreed to repaint the stairwells.

One (1) quotation was tabled from Mrs E Bruce from Owen Contracting Services.

It was agreed to obtain two (2) further quotes. Ms Courtney to arrange.

Submissions

Ms Bryce, a committee member, provided the only submission. Within the submission, she provides outlines of quotes that were considered in relation to the various decisions made as follows:

Garden and Grounds

"I submitted two (2) quotations for the above.....

1.	The Property Stylist – to mow lawns, trim trees, manicure hedges, etc., 2 & a half hours per month at $65. Any additional services at $32 per hour.
2.	Peters Lawn & Garden Maintenance - $33 per hour, Lawns only.

These quotations were discussed and it was decided that, as Mr B Jones was content to not be involved with the lawns/garden, The Property Stylist would attend to these duties.

Pools, Stairwells and Repairs & Maintenance

Mr B Jones to continue the maintenance of the above. Mr B Jones to submit his quotation for these jobs.

Stairwells

I submitted one (1) quotation for the painting of the walls, window sills, door frames of the communal stairwells.

After discussion, it was agreed that this painting should be done. Ms Tracey Courtney to arrange two (2) further quotes.

Response to Submissions

The essential thrust of the response is as follows:

"(These) matters did not appear on the notice of the meeting. Quotations not provided. It is illegal that new business be introduced or dealt with at the A.G.M of March 17^th, 2006".

Determination

Firstly, I observe that not all aspects of the submissions or the response to submissions have been summarised above. This is because in my view some of the input has strayed into matters which I must disregard as irrelevant in forming my decision.

The minuting of a decision under "General Business" generally means that the matter was raised at the meeting, and was not included as an item of business in the notice of the meeting. The notice of a general meeting must contain the agenda and voting papers for the meeting (section 42, Standard Module). The agenda must include the substance of the motions submitted for consideration at the meeting (section 45, Standard Module). A general meeting may pass a resolution on a motion only if the motion is included on the agenda for the meeting and stated in the voting paper (section 53, Standard Module).

While "General Business" is not provided for in the legislation, it is sometimes used by some bodies corporate to discuss some issues with available lot owners at a general meeting. However, the body corporate cannot make decisions at a general meeting under "General Business". It would seem that the decision regarding these issues was not included on the agenda and in the voting paper for the AGM. If this was the case, the decisions cannot be implemented and the matters should be properly considered at another time.

Further, this general business also took place after the election of the Committee. Section 19 of the Standard Module addresses the conduct of the ballot for Committee elections. It states that any items of business about the election of members of the committee that are on the agenda for an annual general meeting must be conducted as the last items of business for the meeting.

It is possible that the expenditure contemplated under Items 1 and 2 of the general business may fall within the spending limitations of the committee. However in accordance with Section 19(2) of the Standard Module, the election of members takes effect immediately after the close of the meeting at which they are elected. As the annual general meeting had not closed, the remaining attendees who were all elected to the committee cannot be deemed to have been conducting a committee meeting.
Even if some of these decisions could be characterised as having taken place in a committee meeting, notice of a committee meeting should be distributed to all owners 7 days before the meeting in accordance with Section 28 of the Standard Module. Lot owners should be given the opportunity to attend in accordance with section 32B.

I do observe that it appears that a decision in relation to Garden & Grounds appears to be within the discretion of the Committee under the relevant limit for committee spending of $125 per unit. There also appears to be a possibility that decisions in relation to pool and stairwell maintenance and repairs and maintenance may be possible within the committee. I imagine the receipt of all quotes will assist in identifying the correct decision forum.

I note that the applicant’s representative has been appointed as both Treasurer and Secretary to the scheme. Therefore, the applicant will have the opportunity to have input in relation to these issues as a committee member. All members of the Body Corporate should be given the opportunity to consider the issue on the basis of the notice of committee meeting provided to them 7 days before the committee meeting under Section 28 and by perusing the minutes of the committee meeting which should be made available to all owners within 21 days of the committee meeting under section 36. Further, the committee must not act to implement any decision made, until the minutes of the committee meeting have been available to all owners for a period of 7 days. Details of this requirement can be found under Section 37 of the Standard Module.

Given the cost of painting and my understanding that there is more than one stairwell in the complex, it is feasible that the cost of completing the painting could exceed the "relevant limit for major spending" of $3,000 or $250 per lot. If the spending is between $1,500 and $3,000 it will need to go to a general meeting for a resolution. If the spending is above $3,000 it will need to go to a general meeting as a motion with alternatives.

A motion with alternatives is a two stage process. Firstly there is a decision as to whether or not the work should proceed and secondly, the members of the body corporate must choose who is to undertake the work, based on quotes provided. The requirements for a motion with alternatives are detailed under sections 42B and 42C of the Standard Module.

For all these reasons, the decisions made under General Business cannot stand. However, the irregularity attaching to these items is not sufficient in my mind to invalidate the entire meeting. I will therefore make orders limited to invalidating these decisions.