Westcourt Units [2006] QBCCMCmr 761 (28 September 2006)

Last Updated: 2 April 2007

REFERENCE: 0768-2006

INTERIM ORDER OF AN ADJUDICATOR

MADE UNDER PART 9 OF CHAPTER 6

BODY CORPORATE AND COMMUNITY MANAGEMENT ACT 1997

Number of Scheme:	16063
Name of Scheme:	Westcourt Units
Address of Scheme:	87 - 91 Earl Street WESTCOURT QLD 4870

TAKE NOTICE that pursuant to an application made under the abovementioned Act by Noel Walpole, the co-owner of Lot 1

I hereby order that pending a final determination of this application, the body corporate for Westcourt Units community titles scheme 16063 shall not proceed with, implement or otherwise act upon any resolution passed on: 1. Motions 8 and 12 on the agenda of the Annual General Meeting to be held on 29 September 2006 contained in the Notice of Annual General Meeting of the body corporate for Westcourt Units CTS 16063 dated 8 August 2006. 2. Motion 11 on the agenda of the Annual General Meeting to be held on 29 September 2006 contained in the Addendum to Meeting Notice of the body corporate for Westcourt Units CTS 16063 dated 29 August 2006. This interim order has effect until 12 months have elapsed from the date of this order, a further interim or final order for the application is issued, or until the application is withdrawn, rejected or otherwise ended (whichever is the earlier).

STATEMENT OF ADJUDICATOR’S REASONS FOR DECISION - REF 0768-2006

"Westcourt Units" CTS 16063

APPLICATION

This application is by Noel Walpole, the co-owner of Lot 1 (applicant) against the body corporate seeking the following outcomes.

The final outcome sought is, quote:

That the chairperson of the annual general meeting of Westcourt Units to be held on 29 September 2006 be ordered to rule out of order motions 8 and 12 of the notice of meeting dated 8 August 2006 and motion 11 of the "addendum to meeting notice" issued by the body corporate manager on the 29 August 2006

or in the alternative

That the adjudicator rule out of order motions 8 and 12 of the notice of meeting dated 8 August 2006 and motion 11 of the "addendum to meeting notice" issued by the body corporate manager on the 29 August 2006.

The applicant has also sought the following interim order, quote:

That the Body Corporate for Westcourt Units CTS 16063 at its annual general meeting to be held on 29 September 2006 not vote on motions 8 and 12 of the notice of meeting dated 8 August 2006 and/or motion 11 of the "addendum to meeting notice" issued by the body corporate manager on the 29 August 2006 until such time as a decision of an adjudicator is given in this application;

or in the alternative

That in the event that the body corporate does vote on motions 8 and 12 of the notice of meeting dated 8 August 2006 and/or motion 11 of the "addendum of meeting notice" issued by the body corporate manager on the 29 August 2006 that the Body Corporate for Westcourt Units CTS 16063 not give effect to the resolution until such time as a decision of an adjudicator is given in this application.

The applicant claims, among other things:

•	The notice of the annual general meeting dated 8 August 2006 to be held on 29 September 2006 (AGM) included Motions 8 and 12 about the appointment of a body corporate manager. The proposal in Motion 8 involves major expenditure and a second quote was not included. As the Motions deal with the same issue, section 42B of the Standard Module applies and the motions should have been included as a motion with alternatives.
•	An addendum to the AGM notice was given to lot owners on 29 August 2006.
•	There are irregularities with the AGM notice including:

− Only every second page of the proposed body corporate management agreement from Strataworks was included in the meeting notice even though a complete copy of the agreement was given to the body corporate.
− The explanatory schedule did not include each motion submitted by the applicant to the body corporate.
− It is unclear which form of agreement Body Corporate Services intends to rely on and which agreement owners understand will apply should Body Corporate Services be engaged.
− The addendum creates uncertainty and is defective as new Option A includes the entire motion (not the substance) and the change in the numbering of motions does not coincide with the numbering in the explanatory schedule.

JURISDICTION

"Westcourt Units" Community Titles Scheme 16063 is a scheme under the Body Corporate and Community Management Act 1997 (Act) and the Body Corporate and Community Management (Standard Module) Regulation 1997 (Standard Module).

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 claimed or anticipated contravention of the Act or the community management statement; or the exercise of rights or powers, or the performance of duties, under the Act or the community management statement. An order may require a person to act, or prohibit a person from acting, in a way stated in the order (section 276(2), Act). An adjudicator's order may contain ancillary and consequential provisions the adjudicator considers necessary or appropriate (section 284(1), Act).

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 being issued. The Commissioner has referred the application to me even though affected persons have not been given notice of the application, or afforded an opportunity to make submissions about the application (section 247(3), Act).

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. In any consideration of an application which seeks the making of an interim order, it is necessary to determine at the outset whether, because of the nature or urgency of the circumstances relating to the application, an interim order is in fact necessary or appropriate. The examples included in the Act under section 279(1) are suggestive of the usual circumstances where an interim order might be made. Both examples are in the nature of injunctive relief. Whilst the range of matters which might be the subject of an interim order is not capable of definition, the applicant does need to establish that the circumstances of the application warrant the making of an interim order.

SUBMISSIONS

The application was initially made on 20 September 2006. Subsequent to case management of the application, the application was amended and on 26 September 2006 was referred by the commissioner for adjudication. Given the restricted time frame, I requested that the body corporate manager be asked to provide the details of the most appropriate person to contact regarding the application. The manager provided the details of Mr Connelly, the chairperson of the body corporate. This office has been unsuccessful in attempts to contact Mr Connelly. On 27 September 2006, a notice of the application and an invitation for the committee to make a submission regarding the interim order application by 12pm Thursday 28 September 2006 was facsimiled to the body corporate manager. On 28 September 2006, Mr Ray from Body Corporate Services informed this office that a written submission to the application for an interim order would not be made.

DETERMINATION

The application questions motions on the agenda of the forthcoming AGM relating to the engagement of a body corporate manager for a period of three years. In the circumstances, I consider that an interim order is necessary. 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 that will need to be determined. If the application raises a serious legal question then it may be appropriate to make an interim order 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.

Section 78 of the Standard Module prescribes the form of engagement of a person as a body corporate manager. Relevantly, the engagement must be writing, state the functions the manager is required or authorised to carry out, and state the basis on which the payment for the manager’s services is to be worked out.

Section 104 of the Standard Module applies where the cost of proposed work or services is more than the relevant limit for major spending for the scheme. Given the definition of the relevant limit for major spending, the limit for this scheme is $10,500 (42 lots multiplied by $250). If the proposal exceeds this limit, the owner proposing the motion for the work or service must obtain at least two quotations and give them to the secretary (section 104(4), Standard Module). In this circumstance, the motion must be stated as a motion with alternatives in the agenda and on the voting paper for the general meeting (section 104(7), Standard Module).

Section 42B of the Standard Module makes provision for a motion with alternatives and states:

42B Motion with alternatives

(1) This section applies if 2 or more motions (the original motions) proposing alternative ways of dealing with the same issue are submitted, under section 41, as motions for consideration at a general meeting of the body corporate.

Example for subsection (1)--

The secretary of the body corporate receives motions from 3 lot owners proposing the engagement of a person as a body corporate manager. Each motion proposes a different person.

(2) A voting paper for the general meeting must--

(a) list as alternatives under 1 motion submitted by the committee (a motion with alternatives), the substance of each of the original motions; and

(b) show, after the motion and each alternative listed under it, a blank space for voting purposes.

(3) A person who is a voter for the general meeting may vote either--

(a) for the motion, by voting for the motion and for 1 of the alternatives listed under the motion; or

(b) against the motion.

(4) If the required resolution is passed for the motion--

(a) the alternative with the most votes is the body corporate’s decision; or

(b) if 2 or more alternatives (the qualifying alternatives) receive an equal highest number of votes--the qualifying alternative that is the body corporate’s decision must be decided by chance in the way the meeting decides.

(5) If more than 1 motion about the same issue is listed on the agenda, or stated in a voting paper, for the meeting, all motions about the issue are void.

Section 42C of the Standard Module provides for explanatory material which must accompany a voting paper for a general meeting. Specifically, section 42C(4) states:

(4) The explanatory schedule must, for a motion with alternatives, include each of the following--

(a) each motion (original motion), the substance of which is stated as an alternative under the motion with alternatives, in the form in which it was submitted under section 41;

(b) an explanatory note about each original motion, given to the secretary by the submitter of the original motion, if the note is not longer than 300 words;

(c) an explanatory note stating that voters must vote either--

(i) for the motion, by voting for the motion and for 1 of the alternatives; or

(ii) against the motion.

Example of an explanatory note for subsection (4)(c)--

To vote on this motion, you must either vote against the motion OR vote for the motion and 1 alternative.

To vote against the motion--Mark ‘No’ opposite the motion on the voting paper. If you mark ‘No’, do not place a mark beside any of the alternatives. To vote for the motion and 1 alternative--Mark the voting paper in 2 places. Firstly, mark ‘Yes’, opposite the motion on the voting paper. Secondly, mark ‘Yes’ opposite the alternative you want to vote for. You can vote for only 1 alternative.

The notice of the AGM dated 8 August 2006 included two motions about the engagement of a body corporate manager. The first (Motion 8) was submitted by Conofam, the owner of Lot 37 and related to the engagement of Body Corporate Services Pty Ltd as body corporate manager for a period of three years. The second (Motion 12) was submitted by the applicant and proposed the engagement of Body Corporate Services Pty Ltd or Strata Work Pty Ltd as body corporate manager for a period of three years. The explanatory notes to the voting paper for Motion 12 mention a cost for printing etc to be charged by Strata Works Pty Ltd and includes a voting instruction. The notice would seem to have included the proposed agreements from the nominated body corporate managers. The copy of the meeting notice provided by the applicant indicates that only every second page of the proposed body corporate management agreement from Strataworks was included.

With respect to Motion 8, there is a question about the lot owner who actually submitted the motion given that Conofam Pty Ltd is the owner of Lot 25 with Joan Conolly being the owner of Lot 37. More importantly, there is a question about the number of quotations provided by the motion’s submitter given that the proposed cost of the engagement ($6,258.00 per annum for three years) stated in the Motion is above the relevant limit for major spending. Additionally, the inclusion of the Motion separate to Motion 12 is contrary to section 42B of the Standard Module.

Motion 12 is stated as being submitted by the owner of Lot 1. The motion with alternatives is required to be submitted by the committee (section 42B(2)(a), Standard Module). In isolation, this may not be a major issue. I have also noted that for each alternative, the voting paper provides ‘Yes/No/Abstain’. It may be that these voting options may cause confusion given the instructions for voting on an alternative in a motion with alternatives stated in the explanatory notes and required by section 42C(4) of the Standard Module.

Significantly, the inclusion of Motions 8 and 12 on the agenda does raise a serious question given that both motions deal with the same issue. The inclusion of these motions in this way is prohibited given the requirements of section 42B(5) of the Standard Module. In my view, this question alone warrants the making of an interim order with respect to any resolution which may be passed on Motions 8 and 12 on the agenda of the notice of the AGM dated 8 August 2006.

It is evident that an addendum to the meeting notice has been given to owners essentially amalgamating the original Motions 8 and 12. The addendum was given to lot owners over 21 days before the AGM and contained a reconfigured agenda for the AGM by incorporating Motion 8 into the original Motion 12 which was renumbered as Motion 11. The form of the original Motion 8 was included in Motion 11 as the first alternative. While it would seem that the substance of the original motions submitted by the applicant have been included as alternatives B and C, it is apparent that the substance of the original Motion 8 was not similarly stated which is contrary to section 42B(2)(a) of the Standard Module. Further, it would seem that the original motions submitted by the applicant have not been included in the explanatory notes for the AGM as required by section 42C(4)(a) of the Standard Module. The addendum also includes ‘Yes/No/Abstain’ for voting on each option which has the potential to be confusing for voters given the stated voting instruction for a motion with alternatives. Additionally, there is no indication that the addendum included a complete copy of the proposed body corporate management agreement from Strataworks.

Motion 11 does, to a limited extent, remedy the defect caused by the inclusion of the original Motions 8 and 12 on the agenda of the AGM. However, I consider that serious questions still remain with respect to compliance with section 42B and section 42C of the Standard Module; and about the information distributed to owners about the proposed Strata Works Pty Ltd agreement (given the requirements of section 78). A fundamental requirement for a notice of a general meeting is that it includes clear information to enable voters to make an informed decision. In my view, the information distributed to owners about the proposed Strata Works Pty Ltd agreement and about voting on the alternatives is capable of having an impact on the ability of owners to participate in the decision making process.

In the circumstances, I am satisfied that there are sufficient identifiable irregularities in the notice of the AGM and the Addendum to the notice to warrant the making of an interim order with respect to any resolution which may be passed on Motion 11 on the agenda of the addendum to the notice of the AGM dated 29 August 2006.

I have made the interim order after considering the fact that the body corporate committee has not been able to make a submission to the application for an interim order. The applicant has raised serious legal questions about the inclusion of motions proposing the engagement of a body corporate manager and in these circumstances, the likely inconvenience should no interim order be granted outweighs any inconvenience likely to result from the interim order. For these reasons, I have an interim order in the terms sought by the applicant. This application will now be administered in accordance with the Act and the normal processes of this Office.