Palm Beach North [2006] QBCCMCmr 93 (17 February 2006)

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

I hereby order that the application for the following orders:

1. to allow all owners to vote at the next EGM 23/2/2006 for Palm Beach North, without having paid their levies (some are in dispute)and to therefore have the opportunity to democratically vote for a new committee...;

2. that all legal advice sought by the committee since 1 July 2004 cannot be used by the body corporate as we believe all legal advice was obtained and expensed without properly convened committee meetings, no proper notices sent out to owners

3. that motions 7,8,9,10 & 11 inclusive must not be allowed to be voted on at the next EGM on 23/2/2006 as the meeting was called to elect a new committee and vote on motions that were in place for the now late AGM and motions 7-11 were included by the last standing committee member as a condition in order to call this EGM or nothing.

is dismissed.

STATEMENT OF ADJUDICATOR’S REASONS FOR DECISION - REF 0027-2006

"Palm Beach North" CTS 31739

APPLICATION

Palm Beach North is a 28 lot scheme under the Body Corporate and Community Management Act (Act) and the Act’s Accommodation Module Regulation (Accommodation Module).

This is an application by the owners of lot 13 seeking the following interim orders against the body corporate for Palm Beach North (respondent).

1. to rule, allow and accept the owner’s vote at the 23/2/2006 EGM due to no fault of theirs and allow 60 days after the EGM for the new committee voted at this EGM to work with the B/C manager and owners to quickly sort out levies and the proper collection and banking of such amounts now due. We also ask that all interest immorally charged, be withdrawn...

2. to rule that all legal advice sought and obtained by all committees and their executive since July 2004, be declared invalid never to be used for issues concerning Palm Beach North and those committees responsible in obtaining such advice be made accountable and all monies spent must be paid back in full within 30 days of your ruling in this matter or face prosecution

3. We ask the Commissioner to rule that motions 7-11 of the 23/2/2006 EGM be declared invalid and ruled out of order, as they were only entered by the last remaining committee member and ruled out of order as they were only entered by the last remaining committee member as a "condition" of his in order to call this meeting....

BACKGROUND

Although this is a relatively new scheme, it would appear that governance of this scheme has been in disarray for a number of years. A perusal of earlier orders indicates irregularities in calling of meetings and appointment of committee members as well as instances where expenditure has been incurred without complying with relevant legislative provisions. In particular it is noted that a general meeting of the body corporate purportedly convened on 12 July 2004 was void for irregularity with the result that a caretaking and letting agreement purportedly authorised at that meeting, was not entered into with the applicant.

I note that an extraordinary general meeting has been scheduled for 23 February 2006 at which the following motions are to be considered:
1. Confirmation of Previous General Meeting;
2. Committee Appointment;
3. Waiver of Penalty Interest on unpaid levies;
4. Caretaking and Letting Agreement;
5. Caretaking and Letting Agreement – Request for temporary waiver to live "on site".
6. Financial status of Palm Beach North
7. Approval of quotation from Axenic Pool Services;
8. Approval of quotation from Rob Maulet;
9. Special Levy
10. Body Corporate Manager
11. Payment to Body Corporate Administration.

The applicants have also raised concerns that they would be deemed to be "unfinancial" owing to difficulties experienced with the levy payment system.

Finally, the applicant requests that motions 7, 8, 9, 10 and 11 should not be considered because they "were included by the last standing committee member as a condition in order to call this EGM or nothing".

SUBMISSIONS

Mr Symonds, the last remaining committee member has advised that he called the EGM to bring some order to the scheme and has made the following submissions:
"The majority of owners have paid their levies without a problem but a small group of owners have not paid their levies including Mr. Kalathas".

It is claimed that the applicant owes the body corporate several thousand dollars in unpaid levies and is refusing to pay this amount until the body corporate approves a caretaking/ letting agreement which was purportedly authorised in 2004.

It is claimed that in an email dated July 2005 the applicant made the following comments:
" Whilst I cannot afford to pay our BC fees at this stage I will honour my obligation and pay what is due when the agreements are approved"

Further, Mr Symonds advises that the special levy approved by ordinary resolution of the body corporate on Wednesday 16 November 2005, was validly imposed and a lot owner who fails to pay the levy at the date of the meeting owes a "body corporate debt" and is therefore not eligible to vote.

It is submitted that expenditure on legal advice was properly incurred and is supported and evidenced by the minutes of the body corporate, particularly minutes of the AGM convened in January 2005. It is submitted that this would have been obvious to the auditor if the auditor had taken the time to match expenditure with authorisations recorded in the minutes.

Mr Symonds also questions why BCA has failed to distribute the legal advice regarding the Caretaking contract to all members.

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

(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 of the Act provides that an adjudicator may make an interim order if satisfied, on reasonable grounds, that an interim order is necessary because of the nature or urgency of the circumstances to which the application relates. The examples included in the Act under section 279 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 that 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.

An interim order will not be made, or will be refused, in circumstances where the only urgency relates to the applicant’s desire to resolve or expedite the matter in dispute, or where the nature of the circumstances are such that the matter is not capable of being dealt with in the context of an interim order. Again, it is not possible to define these circumstances. However, given that an interim order may be made ex parte ( that is, without reference to, or submission from the respondents named in the matter) where the circumstances or matters in dispute include matters or allegations not capable of expeditious and objective consideration, then the request for an interim order may be refused. It is a matter for an adjudicator to determine in respect of each application.

DETERMINATION

As stated above, it would appear that governance of this scheme has been in disarray for a number of years and it crucial that a general meeting be called to appoint a new committee and deal with the various motions which have been submitted by concerned members of the body corporate. As far as I can tell, adequate notice of meeting has been given in accordance with Section 41 of the Accommodation Module.

Given the importance of this meeting, and the limited time available to determine this application, I do not propose to make prevent this meeting from proceeding. Further, given the clear indebtedness of the applicants to the body corporate, and apparent reluctance to clear his sizeable debt, I do not believe that the applicants are entitled to vote. Indeed, I am not empowered to order that the applicants’ indebtedness be ignored for the purposes of determining whether he/ she is eligible to vote.

Similarly, I do not propose to order that all legal advice sought by the committee since 1 July 2004 cannot be used by the body corporate. Apart from the obvious practical difficulties of enforcing such an order, I do not believe that I am empowered to make this order.

Finally, I do not believe it is appropriate for me to dictate what motions should be considered at an EGM. If the applicant believes that an motion should not be considered at the EGM, I believe he should raise these concerns at the meeting. Section 45 of the Accommodation Module Regulation contains specific provisions regarding the obligation of a chairman to rule a motion out of order ie:

45 Power of person chairing meeting to rule motion out of order
(1) A person chairing a general meeting of the body corporate must rule a motion out of order if--
(a) the motion, if carried, would--
(i) conflict with the Act, this regulation or by-laws, or a motion already voted on at the meeting; or
(ii) be unlawful or unenforceable for another reason; or
(b) except for a procedural motion for the conduct of the meeting, or a motion to correct minutes--the substance of the motion was not included in the agenda for the meeting.
(2) The person chairing the meeting must, when ruling a motion out of order--
(a) give reasons for the ruling; and
(b) for a ruling given under subsection (1)(a)--state how the ruling may be reversed by the persons present and entitled to vote on the issue.
(3) The persons present and entitled to vote may reverse a ruling given under subsection (1)(a) by passing an ordinary resolution disagreeing with the ruling.
(4) The reasons given by the person chairing the meeting for ruling a motion out of order must be recorded in the minutes of the meeting.

For these reasons, I have dismissed the request for interim orders.

I note that the applicants also seek certain final orders. I will now refer this application back to the Commissioner to be administered in accordance with the Act and the normal processes of this Office. The matter will be finally determined in due course and affected parties including all lot owners, will have an opportunity to make written submissions about the application for final orders.

Number of Scheme:	31739
Name of Scheme:	Palm Beach North
Address of Scheme:	1444 Gold Coast Highway PALM BEACH QLD 4221

Queensland Body Corporate and Community Management Commissioner - Adjudicators Orders

Palm Beach North [2006] QBCCMCmr 93 (17 February 2006)