Eastern Heights Park [2006] QBCCMCmr 675 (18 December 2006)

Last Updated: 27 March 2007

REFERENCE: 0995-2006

INTERIM ORDER OF AN ADJUDICATOR

MADE UNDER PART 9 OF CHAPTER 6

BODY CORPORATE AND COMMUNITY MANAGEMENT ACT 1997

Number of Scheme:	2358
Name of Scheme:	Eastern Heights Park
Address of Scheme:	112B Robertson Road Eastern Heights Qld 4305

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

Cooper and Mayer Associates Pty Ltd, the Owner of Lot 1

I hereby order that the application for an order: To have motions 2, 3, 4, 5, 6 and 7 temporarily stopped. is dismissed.

STATEMENT OF ADJUDICATOR’S REASONS FOR DECISION - REF 0995-2006

"Eastern Heights Park" CTS 2358

The Eastern Heights Park community titles scheme (Eastern Heights Park) consists of 19 lots and common property. The community management statement for Eastern Heights Park indicates that the Body Corporate and Community Management (Standard Module) Regulation 1997 (Standard Module) applies to the scheme. Department of Natural Resources Mines and Water records show the scheme is registered as Building Units Plan 13303.

INTERIM APPLICATION

This is an application for interim orders lodged by Cooper and Mayer Associates Pty Ltd, owner of Lot 1 (applicant) on 1 December 2006 under the Body Corporate and Community Management Act 1997 (Act). The applicants sought interim orders against the Body Corporate for Eastern Heights Park (respondent) in the following terms:

To have motions 2, 3, 4, 5, 6 and 7 temporarily stopped.

The application also seeks the following final order:

To have the EGM convened and conducted by Teys on 30 November 2006 (yesterday) "Ruled Out of Order"

PROCEDURAL MATTERS

In accordance with section 247 of the Act, the Commissioner for Body Corporate and Community Management has referred the application to me to decide whether the nature or urgency of the circumstances of the application warrant an interim order. The Commissioner has referred the application notwithstanding that affected persons have not been given notice of the application or afforded an opportunity to make submissions about the application (section 247(3)).

A brief period was provided for the Committee and the Body Corporate Manager, TEYS Strata (Brisbane) Pty Ltd (TEYS), to make submissions in respect of the application. Submissions were received from TEYS and the Committee Chair, pursuant to a Committee resolution on 14 December 2006 authorising her to make the submission on its behalf.

MATTERS IN DISPUTE

This application relates to a disputed Extraordinary General Meeting (Requested EGM) conducted on 30 November 2006. The EGM comprised seven motions, summarised as follows

1. Confirmation of the previous minutes
2. Removal of R Mayer-Frisch from the Committee
3. Authorisation for the BCM to action collection of outstanding debts relating to Lot 1.
4. Reinstatement of the penalty interest of 1.5% per month for overdue levies.
5. Authorisation for the BCM to conduct the AGM.
6. Appointment of a new advisory ‘inspection’ engineer to replace R Mayer-Frisch.
7. The exclusion of R Mayer-Frisch from conducting audits for the Body Corporate.

It appears that the applicant was not present at the meeting but he says he was informed that all the motions were passed. He claims he has not yet received a copy of the minutes.

Initially the application merely stated that TEYS was out of order and in contravention of the legislation, that he was being unreasonably victimised and denied natural justice, and that TEYS was acting in their own interests and not in the interests of the Body Corporate. The applicant says he is the Body Corporate Secretary and Treasurer. He also says that, as a civil engineer, he was invited to be the honorary Building Consultant for the scheme.
Upon a request for clarification of the basis of the application, the applicant submitted that:

	On 6 November 2006 the BCM convened the EGM without reference to the Committee.
	Section 61(1)(a) of the Standard Module requires that an EGM must be called if requested in writing by 25% of owners (here, 5 owners). The Committee has not been given a copy of the notice requesting the EGM and to date the applicant has not been able to search the records. The applicant believes the notice may not include the requisite number of signatures.
	Section 45 of the Standard Module requires the Committee to prepare and agenda for each general meeting and specifies what must be included in the agenda.

The applicant argues the EGM contravened section 61 and 45 and should be ruled out of order.

The applicant later amended the application to note that he has been ‘informed’ that Stephanie Peech of TEYS acted as Returning Officer for the meeting. He understands it is mandatory that an independent returning officer appointed for each general meeting and she is not independent.

The submission from TEYS includes the following comments and information:

	The applicant’s account was in significant arrears since before the last AGM. As the applicant made no mention of this in his meeting minutes, TEYS felt compelled to write to the Chairperson to advise them of the applicant’s financial status.
	There were concerns about the applicant’s performance of his duties as secretary/treasurer, including minutes being unprofessional in tone and sometimes months late.
	Many owners contacted TEYS regarding the applicant’s conduct.
	The applicant made it clear to TEYS that they were not welcome at body corporate meetings.
	On 25 October 2005 Committee agreed to call an EGM to discuss issues relating to the applicant’s levy account. The applicant said he would prepare an agenda, but TEYS later advised the Chairperson verbally that this would represent a conflict of interest.
	The applicant then agreed to pay some outstanding amounts and called an ‘urgent’ committee meeting to cancel the EGM. The chairperson and another member were not notified.
	The Requested EGM was convened by the Chair in response to a request signed by 6 owners.
	TEYS did not convene the meeting, but at the Chair’s request prepared the meeting documentation and took minutes.
	The applicant apparently then sought to convene a committee meeting (21 November 2006) to prepare another agenda for the EGM.
	On 22 November 2006 the applicant distributed an "amended" notice of meeting, purportedly changing the date for the meeting to 12 December 2006 and proposing a different venue.
	The amended agenda included 16 motions of which motions 2 to 10 were listed as ‘recommended by the committee’ and appear to respond to the issues raised in the original six motions. Motions 11 to 16 include the original motions, accompanied by comments purportedly from the Committee and that the Committee recommend voting no to each motion.
	On 27 November 2006 a Notice of Opposition signed by 11 owners sought to overturn the decision to hold general meetings at the Brothers Leagues Club rather than Bethany Lutheran Hall (the location for the scheduled 30 November 2006 EGM) and expressed the expectation that the original EGM will proceed as scheduled.
	The six requested motions were passed unanimously at the EGM (13 in favour and nil against).
	The EGM minutes were distributed the next day and no other owner has objected to the result.
	TEYS argues the meeting results show the motions were in the interests of the majority of owners, and the orders sought would benefit no owners other than the applicant.

The Chairperson’s includes the following:

	TEYS did not convene the EGM but prepared the documents at her request.
	As chair, she conducted the meeting.
	The meeting did not have or need a returning officer.
	The applicant has never been victimised or his rights to natural justice denied.
	The actions at the Requested EGM were essential to the interests of the Body Corporate and were about gaining rights and removing victimisation for all owners.
	At least 15 of the 19 owners now support the EGM resolutions, with two expressing support since the meeting. Of the other four, one is the applicant, one is his mother-in-law, one is new and the other never votes or participates.
	The applicant often convenes meetings where the ‘quorum’ comprises himself, his mother-in-law, a person who sold their lot in February and another who sold their lot in early December.
	Various arguments in regard to the background and need for the six motions at the EGM, including that the applicant did not disclose that he was unfinancial when he accepted the nomination for Committee membership at the last AGM.
	The notice requesting an EGM, dated 1 November 2006 and signed by 6 owners, is provided.
	The chair was aware that the secretary was to be hospitalised for 3 weeks from 3 November 2006 and so, on advice from the Information Service of the Commissioner’s Office and after confirming that the secretary had not distributed the meeting notice, the chair proceeded.

JURISDICTION

I am satisfied that this is a matter which falls within the dispute resolution provisions of the legislation (see sections 227, 228, 276 and Schedule 5 of the Act). Section 276(1) of the Act provides an adjudicator may make an order that is just and equitable in the circumstances (including a declaratory order) to resolve a dispute in 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)).

Section 279(1) of the Act allows an adjudicator to make an interim order if satisfied, on reasonable grounds, that an interim order is necessary because of the nature or urgency of the circumstances of the application.

DETERMINATION

At this time, I am concerned with the application for an 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, section 279). Any orders granted must be just and equitable in the circumstances (Act, section 276).

It is not appropriate for me to consider the substantive issues in this application in detail at this time. But to determine whether it is just and equitable to grant interim relief, it is relevant to briefly consider whether the application raises any serious questions for final determination. It is also relevant to consider whether any inconvenience likely to result from the interim order is outweighed by the potential detriment alleged in the application. Of particular relevance is evidence that an interim order is necessary to prevent serious or irreparable harm.

The key issue in this dispute is whether the Requested EGM was validly convened and, if not, whether it is just and equitable in the circumstances to invalidate the meeting on that basis. The applicant gives very little substantiation of his claims, and in fact failed to explain most of the circumstances surrounding this dispute. Allegations invalidity of a general meeting is potentially a serious legal issue but in this case the lack of substance in the application does not present a persuasive argument in the applicant’s favour.

The most significant issue in the application is the potential concern that insufficient owners signed the notice requesting the meeting. The applicant is unsure on this point. However the notice requesting the meeting is certainly signed by 6 persons who appear to be current owners. Accordingly that argument immediately fails.
In regard to the issue of the returning officer, the Chair advises that no returning officer was appointed and the applicant has provided no evidence to the contrary. The applicant is incorrect in his claim that the legislation requires a returning officer to be appointed for every general meeting. Rather, a returning officer is only mandatory if a motion is to be decided by secret ballot, which is not the case here.^[1]

Without fully investigating the matter at this time, it may be that there were potentially some minor irregularities in the way in which the agenda was prepared and the meeting called. However, given that all owners have apparently received full notice of the motions and a clear majority of owners voted in favour of those motions, the applicant has not provided any argument as to what detriment has arise from any irregularities, or how they have materially changed what would otherwise have been the result of the meeting.

The applicant also gives no substantiation of his assertion that he is being ‘victimised’ by TEYS or explanation of how his right to natural justice has been denied. Accordingly I do not consider that aspect of the application warrants any further consideration.

Most importantly, in the context of the interim order application, the applicant gives no reasons or argument as to why an interim order is warranted in the circumstances other than the claim that the motions are "not in the best interests of the body corporate". In the absence of any argument from the applicant, it is not obvious that any irreparable harm will accrue from allowing the resolutions to proceed while the final order is determined. None of the resolutions appear to be inherently unreasonable, or will incur significant costs for the Body Corporate, or are unable to be reversed at a later date if necessary.

Moreover, I have concerns that putting the resolutions on hold could potentially cause greater inconvenience for the Body Corporate and confusion for individual owners. Following the resolution removing the applicant from the committee, the vacant committee and executive positions were filled. So, having changed secretary and treasurer on 30 November 2006, I consider it would be disruptive to the effective running of the Body Corporate to change these positions back now, only to potentially change them again if the application is not successful.

Conclusion

In the circumstances, I do not consider that the applicant has presented sufficient justification to warrant the issuing of an interim order to put on hold the motion unanimously passed by 13 owners voting at the Requested EGM of 30 November 2006. Accordingly, I have dismissed the interim order application.

I have given serious consideration to simply dismissing the entire application at this point, pursuant to section 270(1)(c) of the Act, on the basis that the application is without substance. This subsection provides that an adjudicator may dismiss an application without investigating the detail of the application or completing their investigation, if it appears to the adjudicator that the application is frivolous, vexatious, misconceived or without substance. In the circumstances I have decided to proceed with submissions on the final order and to enable the applicant to make a response to those submissions. However, that finding is open to me when considering a final order. In that respect the applicant should be aware that section 270(3) and (4) enables an adjudicator to award costs of up to $2,000 against an applicant, where the application is dismissed under section 270(1)(c), to compensate the person against whom the application was made for any losses resulting from the application.

The matter will now proceed in accordance with the usual processes of this Office, including calling of submissions from all owners. A final order to the application will be made in due course.

---

^[1] Section 54 of the Accommodation Module