Victoria Square [2007] QBCCMCmr 431 (20 July 2007)

Number of Scheme:	5721
Name of Scheme:	Victoria Square
Address of Scheme:	15 Victoria Avenue BROADBEACH QLD 4218

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

I hereby declare that having regard to section 11 of the Body Corporate and Community Management (Accommodation Module) Regulation 1997, Mr Gerard Cassar of Ray White (Tweed Heads) Pty. Ltd. is not eligible to be a voting member of the Committee for Victoria Square Body Corporate while he conducts a letting agent business for lots in the Victoria Square Community Title Scheme.

STATEMENT OF ADJUDICATOR’S REASONS FOR DECISION - REF 0317-2007

"Victoria Square" CTS 5721

"Victoria Square" is a subdivision of 76 lots registered as a building unit plan (now known as a building format plan) located at Broadbeach and contains a mixture of commercial and residential premises. The regulation module applying to the scheme is the Body Corporate and Community Management (Accommodation Module) Regulation 1997 (Accommodation Module).

Application

By application received by this Office on 16 April 2007, the applicant has sought the following order of an adjudicator:

A ruling on the following question...According to the legislation, are the current corporate nominees for lots owned by the Long and Wu families (I.e. Lauren Tobin and Gerard Cassar or any member of the Ray White Managing Agent’s staff, or any member of Gerard Cassar’s family, eligible to be elected as a member of the Victoria Square Body Corporate Committee".

The applicants state that at the last AGM for this scheme, held on 25 January 2007, Ms Tobin, the nominee for the Long and Wu families (who together own 16 of the commercial lots in the complex), was declared elected to the body corporate. The applicants state that Ms Tobin was appointed to the committee despite suggestions from the body corporate manager that she was not eligible to be nominated for committee membership.

Ms Tobin is employed as property manager at a local Ray White franchise which administers the 16 lots owned by the long and Wu families, including organisation of tenants and leases, collection of rents and paying levies etc. At a subsequent committee meeting Ms Tobin was replaced by Mr Cassar as a member of the committee.

Concern has also been expressed regarding an incident at the last AGM when Mr Cassar sought to oppose two motions by exercising some 16 votes as nominee.

The applicants seek a ruling as to question the current corporate nominees for lots owned by the Long and Wu families (i.e. Lauren Tobin and Gerard Cassar or any member of the Ray White Managing Agent’s staff, or any member of Gerard Cassar’s family, eligible to be elected as a member of the Victoria Square Body Corporate Committee.

The applicants state that they are not against a nominee for the Long and Wu families being on the committee but have concerns that the managing agent may have his own agenda which is not necessarily consistent with the interests of the body corporate as a whole.

Submissions

Pursuant to section 243 of the Act, submissions were sought from all lot owners and the affected persons. Submissions were received from the Body Corporate Manager as well as the owners of two residential lots.

The owners of the two residential lots stated that they supported the application for the same reasons expressed by the applicants.

The body corporate manager made the following submissions:

The body corporate manager has also noted that section 16 of the Act contains definitions of the terms "letting agent" and "letting agent business" in the following terms:
Meaning of letting agent and letting agent business
(1) A person is a letting agent for a community titles scheme if the person is authorised by the body corporate to conduct a letting agent business for the scheme.
(2) A person conducts a letting agent business for a community titles scheme if the person conducts, subject to the Property Agents and Motor Dealers Act 2000, the business of acting as
the agent of owners of lots included in the scheme who choose to use the person’s services for securing, negotiating or enforcing (including collecting rents or tariffs for) leases or other occupancies of lots included in the scheme.

The body corporate manager points out that there is some uncertainty as to whether Mr Cassar of Ray White (Tweed Heads) Pty. Ltd. conducts a letting agent business for the scheme. In particular it is noted that a person conducts a letting agent business for a scheme if they act as the agent of owners of lots included in the scheme who choose to use the person’s services...

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)).

Determination

I believe the difference of opinion as to whether Mr. Cassar is conducting a letting agent business, and is therefore ineligible to be a voting member of the committee, evidences a dispute for the purposes of the Dispute Resolution provisions contained in Chapter 6 of the Act.

The relevant statutory provisions are set out below.

Section 11 of the Body Corporate and Community Management (Accommodation
Module) Regulation 1997 provides as follows:
(1) A person is eligible to be a voting member of the committee if the person is an individual nominated for membership of the committee by a member of the body corporate (the
nominating entity) and is also--
(a) a member of the body corporate; or
(b) a person of a following category--
(i) if the nominating entity is an individual--
(A) a member of the individual’s family; or
(B) a person acting under the authority of a power of attorney given by the individual;
(ii) if the nominating entity is a corporation--a director, secretary or other nominee of the
corporation;
(iii) if the nominating entity is the body corporate for a subsidiary scheme in a layered arrangement of community titles schemes--a representative of the subsidiary scheme.
(2) However, a person who is otherwise eligible under subsection (1) to be a voting member of the committee is not eligible to be a voting member of the committee if the person is--
(a) a body corporate manager, service contractor or letting agent; or
(b) an associate of a body corporate manager, service contractor or letting agent, other than a lot owner who is the associate of a letting agent only because the letting agent, in conducting the agent’s letting agent business, acts for the lot owner; or
(c) a person, other than a letting agent for the scheme, who conducts a letting agent business for the scheme.

Section 16(2) of the Act defines "letting agent business" and "letting agent" as follows:
(1) A person is a letting agent for a community titles scheme if the person is authorised by the body corporate to conduct a letting agent business for the scheme.
(2) A person conducts a letting agent business for a community titles scheme if the person conducts, subject to the Property Agents and Motor Dealers Act 2000, the business of acting as
the agent of owners of lots included in the scheme who choose to use the person’s services for securing, negotiating or enforcing (including collecting rents or tariffs for) leases or other occupancies of lots included in the scheme.

Paragraph 11(2)(c) was inserted by section 10 of the Body Corporate and Community Management Legislation Amendment Regulation (No.1) 2003 (SL No.263 of 2003). To assist with any perceived ambiguity with interpretation of the above provision, it is appropriate to refer to refer to the Explanatory Notes accompanying the Regulation which state "In some schemes it occurs that there is a person who is a member of the body corporate and, having a full real estate licence, conducts a letting business for a number of lots in the scheme without the need for a letting authorisation from the body corporate. Such persons are also not eligible to be elected to the committee"

Clearly, the intention behind section 11(2) of the Accommodation Module Regulation is to ensure that a body corporate manager, service contractor, letting agent or person who lets lots in the scheme are not voting members of the committee, as impartiality would be difficult to maintain if there was any sort of business interest at stake. While it is clear that the respondent is not a "letting agent" as defined, it is equally clear that he carries on a "letting agent business" for which he is licensed pursuant to the Property Agents and Motor Dealers Act 2000.

Accordingly, I believe that Mr Cassar is precluded from being a voting member of the body corporate committee.

As a matter of interest it is noted that Paragraph 11(2)(c) does not go as far as Paragraph 11(2)(b)
which specifically precludes an "associate" as defined, from being a voting member of the body corporate committee.

Queensland Body Corporate and Community Management Commissioner - Adjudicators Orders

Victoria Square [2007] QBCCMCmr 431 (20 July 2007)