Heritage Village Ormiston East [2007] QBCCMCmr 184 (29 March 2007)

Last Updated: 12 April 2007

REFERENCE: 0857-2006

ORDER OF AN ADJUDICATOR

MADE UNDER PART 9 OF CHAPTER 6

BODY CORPORATE AND COMMUNITY MANAGEMENT ACT 1997

Number of Scheme:	20152
Name of Scheme:	Heritage Village Ormiston East
Address of Scheme:	QUEENSLAND

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

Rose Florence Doyle, the owner of lot 4

I hereby order that the application for the following orders: "The illegally elected committee to be replaced. The body corporate manager to be replaced." is dismissed.

STATEMENT OF ADJUDICATOR’S REASONS FOR DECISION - REF 0857-2006

"Heritage Village Ormiston East" CTS 20152

Scheme

"Heritage Village Ormiston East" community titles scheme was registered as a group title plan (now known as standard format plan) of subdivision comprising 12 lots and common property on 14 January 1992. The scheme has since been re-subdivided and now comprises 32 lots and common property. The scheme is regulated by the Act’s Standard Module.

Application

This application is brought by the owner of lot 4, Rose Florence Doyle, against the body corporate, seeking the following orders:

The illegally elected committee to be replaced
The body corporate manager to be replaced

The grounds to the application reveal that at an AGM held on 27 April 2006, a committee comprising three owners was elected. Immediately following the AGM, an EGM was held. At the EGM, the three committee positions were declared vacant and a new committee, comprising seven persons was elected.

The applicant believes that the circumstances in which the new committee was elected were illegal, including that:

	There were no reasons given for the removal of the three committee members elected at the AGM;
	The legislation requires that only the three original positions could have been filled under section 24 and 24A of the Standard Module.
	The legislation requires the body corporate to keep full and accurate minutes of each general meeting. The minutes from both the AGM and EGM are incorrect in terms of the location of both meetings and were condensed considerably from what actually occurred and a number of very relevant and key issues were omitted.

In relation to the second order sought, the applicant states that:

	The body corporate manager’s contract expired on 30 April 2006 and has yet to be renewed.
	The body corporate manager caused undue additional cost to the body corporate together with unnecessary confusion to mainly elderly members of the body corporate by calling an extraordinary general meeting by post, stating that it was not recommended that owners attend. This meeting had to be adjourned because no-one turned up and a quorum was not present.

The applicant further states that the minutes of the one and only committee meeting held since the general meetings of 27 April 2006 contained no reference to any correspondence either received or forwarded. The applicant personally forwarded correspondence to the committee but has not received any response.

Submissions

Submissions in response to the application were sought from all owners (excluding the applicant), the committee and the body corporate manager.

A total of 12 submissions were received. Of the 12, 2 supported the applicant and 7 opposed the making of the orders sought. 3 submissions neither supported nor opposed the applicant, but gave factual information concerning the general meetings held on 27 April 2006 and other general information concerning the administration of the scheme. The opposing submissions were generally to the effect that the majority of owners were dissatisfied with the previous committee, of which the applicant was chairperson, in particular, with the level of spending of body corporate funds, which they allege was occurring without appropriate authorisation.

The applicant did not exercise her right to inspect the submissions or make a reply to them.

Jurisdiction

An adjudicator to whom an application is referred has jurisdiction to make an order that is just and equitable to resolve a dispute about claimed contraventions of the act, the exercise of rights or powers under the act and certain claimed contractual matters with body corporate managers, service contractors and letting agents (Act, 276). The order may require a person to act in a way stated in the order (Act, 276(2)). Without limiting either of these subsections, an adjudicator may make an order of the type listed in Schedule 5 of the Act (Act, 276(3)). Further provisions about specific types of orders of an adjudicator relate to orders appointing an administrator, consent orders, interim orders, orders about damage to property, and orders about the changing of the financial year of the body corporate (Act 276(4), 276(5), 279, 281, 283).

An adjudicator must investigate each application to decide whether it would be appropriate to make an order on the application (Act, 269). Relevant to this application, an adjudicator may make an order about a claimed contravention of the Act (Act, 276(1)(a)).

The term "dispute" for the purposes of the Act is limited to disputes between certain parties relevant to the context of a community titles scheme. The particular meaning of "dispute" with bearing on this application is the definition of "dispute" as being a dispute between the body corporate for a community titles scheme and the owner or occupier of a lot included in the scheme (Act, 227(1)(b)).

The applicant believes that the current committee was illegally elected at the EGM on 27 April 2006 and that the body corporate manager should be replaced. The body corporate, based on the submissions received, believes the committee was validly elected and is satisfied with the current body corporate manager. I am therefore satisfied that there is a "dispute" for the purposes of the Act (Act, 227).

Decision

I will consider each of the orders sought by the applicant separately.

The body corporate manager to be replaced

Although the applicant has named the "body corporate" as the other party to her dispute, this order sought relates to the body corporate manager. An individual owner has no jurisdiction to bring an application against a body corporate manager^[1]. Further, an adjudicator does not have jurisdiction to terminate the engagement of a body corporate manager, nor to appoint a different one. These are decisions that can only be made by the body corporate in general meeting.^[2] I have therefore dismissed this aspect of the application.

For the information of the applicant, the existing body corporate manager is engaged for a period ending on 30 April 2007. If the body corporate wishes to engage the services of a body corporate manager beyond 30 April 2007, it will need to pass an ordinary resolution to that effect at a general meeting. If the applicant is dissatisfied with the services of the existing body corporate manager, she should consider submitting appropriate motions to a general meeting of the body corporate for the engagement of an alternative body corporate manager. A body corporate manager can only be engaged by the body corporate passing an ordinary resolution in general meeting. Sections 78 and 87(2) of the Standard Module prescribe further requirements.

The illegally elected committee to be replaced

Given the existence of section 242 of the Act, I do not consider that any detailed consideration is necessary regarding the basis of this dispute, namely the election of the committee at the EGM of 27 April 2007. Section 242(c) of the Act provides that an application to void the election of a member of the committee must be brought within 3 months of the meeting. However, section 242(3)(b) allows the time limit to be waived by an adjudicator where the applicant can show "good reason".

Any examination of whether the time limit should be waived involves consideration of the following statement made by Judge Dodds in the appeal of Weeks v. Commissioner for Body Corporate (Maroochydore District Court Appeal 13/99), at pages 4 and 5 of the judgment, "... the objects of the Act, for instance section 5(a) and (h) militate against too strict or legalistic a view about good reason for waiving non-compliance with the time limit. What will be required is a balancing of the length of the delay; the reason for the non-compliance; the effect of delay on others who are affected by the matter in dispute and importantly, whether apart from the question of non-compliance with the time requirement, an applicant will be entitled to the relief sought. The applicant, being the person seeking a waiver, will have the task overall of satisfying the
adjudicator that the time limit should be waived in all the circumstances."

The meeting at which the committee the applicant alleges was "illegally elected" occurred on 27 April 2006. This application was lodged on 23 October 2006 and later amended on 12 November 2006, over six months after the relevant meeting.

The applicant explains the delay in lodging the application at page 2 of her grounds, as follows:

"It is acknowledged that the application concerning the AGM and EGM has taken over 3 months, because it has taken this period of time to seek responses to requests for copies of the relevant minutes from both the Body Corporate Committee and Body Corporate Manager."

With regard to the first two factors mentioned by Judge Dodds, in my view, the period of delay in the applicant lodging her application is substantial for an application of this nature; more than double the 3 month time limit. Further, I regard the reason given by the applicant for the non-compliance with the time limit as insufficient. The applicant was present at both meetings. The results of voting on each of the motions and the committee elections were declared at the meetings. There is no reason why the applicant could not have lodged the application immediately after the meetings. A copy of the relevant minutes was not necessary. That is something this office could have pursued once the application had been lodged.

Considering the final two factors Judge Dodds mentions, namely, the effect of delay on others who are affected by the matter in dispute and importantly, whether apart from the question of non-compliance with the time requirement, an applicant will be entitled to the relief sought, I remain unconvinced that the time limit should be waived. In particular, I note that none of the decisions of the committee which the applicant believes was "illegally elected" have been challenged. Further, the AGM is due to be held on 27 April 2007. Owners have been asked to submit motions for consideration at the AGM and nominations for committee membership. These motions and nominations were due by 31 January 2007. A new committee will be elected at the AGM on 27 April 2007. In these circumstances, I see no point in granting the order sought, regardless of whether or not the applicant’s grounds have any merit.

In my view, the time that lapsed before this application was made; the fact that decisions made by the existing committee have not been disputed; and the fact that the body corporate will soon be convening its next annual general meeting where a new committee will be elected, are significant in the determination of this dispute. I consider that, given these factors, the likely inconvenience to the body corporate should the order be granted outweighs any inconvenience to the body corporate likely to result from the order not being made. Consequently, I have dismissed the application.

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^[1] See s.227(1)
^[2] See s.87 Standard Module