Sunnybank Heights [2007] QBCCMCmr 13 (9 January 2007)

Last Updated: 15 January 2007

REFERENCE: 0793-2006

ORDER OF AN ADJUDICATOR

MADE UNDER PART 9 OF CHAPTER 6

BODY CORPORATE AND COMMUNITY MANAGEMENT ACT 1997

Number of Scheme:	22781
Name of Scheme:	Sunnybank Heights
Address of Scheme:	12 Grandchester Street, SUNNYBANK HEIGHTS Q 4109

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

Noel Edmonds, the Owner of lot 51

I hereby order that the election of committee members at the EGM held on 6th September 2006, is invalid and of no effect.

STATEMENT OF ADJUDICATOR’S REASONS FOR DECISION - REF 0793-2006

"Sunnybank Heights" CTS 22781

THE SCHEME

Sunnybank Heights is a subdivision of 81 lots on a Standard Format Pan (previously known as a Group Title Plan). The regulation module applying to the scheme is the Accommodation Regulation Module.

APPLICATION

By application to this Office on 29 September 2006, the applicant sought the following order:

To invalidate the motion of removing the current body corporate committee that was not part of the agenda items for the EGM held on 6 September 2006 at 9:30 AM.

BACKGROUND

The applicant states that at the EGM held on 6 September 2006, the resident unit manager Bob Barwick proposed a motion to remove the current body corporate committee members although this item was not included in the list of items included in the agenda for the EGM.

The applicant further states that although the body corporate manager advised the meeting that motions not included on the agenda could be considered at the meeting, the Chairperson and resident unit manager nevertheless proceeded against this advice.

SUBMISSIONS

Pursuant to section 243 of the Act, submissions were invited from the body corporate and all other owners apart from the applicant.

The body corporate committee chairman, Mr. Culleton, made the following submissions:

• He was appointed as Chairperson at the AGM held in June 2006 and became Secretary at the EGM held in September 2006;
• The previous secretary, Mr. Hall, resigned the day after the EGM;
• In June 2006 he received a letter from the applicant alleging mismanagement by the then body corporate manager and suggesting that the body corporate choose a new body corporate manage;
• The applicant also alleged improper behaviour by the resident unit manager and believed there was a "cosy relationship" between the body corporate chairman, the body corporate manager and the resident unit manager;
• The applicant suggested that if the resident unit manager was removed, levies could be significantly decreased;
• At a pre-AGM meeting he met a number of lot owners who had numerous grievances concerning the resident unit manager and it was suggested that the resident unit manager could be forced out ;
• As agreed at that meeting, those lot owners voted as a bloc at the subsequent AGM and Mr. Culleton was elected as Chairman;
• However after the AGM he discovered that the allegations against the resident unit manager lacked substance;
• He believed that the procedure by which the new body corporate manager was chosen was flawed and refused to sign a contract with them;
• He subsequently circulated a document suggesting that certain people should be removed from the Committee at the next EGM;
• An EGM was held to have the budget approved although the agenda included a number of unrelated matters;
• As lot owners were not given an opportunity to submit motions for inclusion on the agenda for the EGM he allowed discussion to proceed regarding the replacement of the committee;
• Shortly after the EGM the body corporate manager advised that it was withdrawing as
body corporate manager as in their view the body corporate was dysfunctional;
• The resident manager put a motion to the meeting that the members of the committee should resign;

• Ms. Hall resigned as secretary the day after the EGM;

• The vacant committee positions were filled and there is now a committee of seven members.

A second lot owner made the following submissions:

• She supports the application to invalidate the appointment of the current committee;
• Since moving into the scheme in 2005 she has tried to be an active member of the body corporate as previously meetings were attended by the resident unit managers "and a couple of other owners";
• As the body corporate became more active, complaints were raised regarding the performance of the body corporate manager and it was resolved that they be replaced;
• However the chairman has since asserted that the appointment was illegal and that the committee was not acting in the interests of the body corporate;
• The motion was not included on the agenda and the meeting appears to have been taken over by the gathering of proxy votes from investor owners;
• The Chairman’s grounds for voting out the committee members apart from himself, were subjective and opinionated.

A third lot owner made the following submissions:

• Ms Hall resigned as Secretary the day after the EGM irrespective of the motion to remove her, carried at the EGM;
• Those persons responsible for preparation of the EGM agenda did not give lot owners the opportunity to submit agenda items and had they done so there would have been no need for the motion to have been lodged at the meeting itself;
• 39 lot owners voted in favour of the motion to remove named individuals and at the end of the EGM all vacant committee positions were filled;
• he does not believe that the motions carried, nor other outcomes of the EGM, should be reversed.

The resident Unit Managers made the following submissions:

• they feel that action taken at the EGM to remove committee members was justified because of dissatisfaction expressed by a large number of owners who could not attend the meeting;
• members were concerned about the legality of some of the committee’s actions and their inability to work with the resident unit managers;
• quotations previously obtained by Mr Edmonds for provision of body corporate management services were of dubious quality;
• no legitimate committee meeting was held to prepare an agenda for the AGM but rather an informal discussion

Other lot owners made the following submissions:

• the motion was supported by a majority of owners;
• the motion defused the conflict between the committee and resident unit managers;
• the committee had not advised lot owners of its meetings and agendas for several years;
• they are not aware of any major problems with the performance of the resident managers;
• invalidating the motion would give rise to another EGM at which the result would probably be the same as previously;

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

Part 4 of the Accommodation Regulation Module sets out certain minimum requirements for general meetings (see sections 40, 43, and 45 of the Accommodation Module in particular). Clearly, the body corporate cannot raise a matter at a general meeting and determine the matter if a motion is not included on the agenda and voting paper.

Further, sections 14 to 21 of the Accommodation Regulation Module prescribes certain minimum requirements for conducting the election of a committee including of a notice inviting nominations, a ballot paper (voting in secret unless resolved otherwise) and a count and declaration of positions. Clearly these requirements have not been met and as a result lot owners would have been deprived of the opportunity to nominate persons for committee membership or to cast a vote if they were not physically present at the meeting.

Accordingly I am of the view that the election of committee members at the EGM held on 6^th September 2006, is invalid and of no effect.

I believe that pursuant to section 99 of the Act and section 23(1) of the Accommodation Regulation Module, the committee members elected at the last AGM continue to be members of the committee. Obviously, this will not be the case where a member of the committee has resigned in writing and in such circumstances the procedures for filling of casual vacancies set out in sections 23A to 23E of the Accommodation Regulation Module will apply.