Oceanside cove [2007] QBCCMCmr 473 (7 August 2007)

Last Updated: 16 August 2007

REFERENCE: 0652-2007

ORDER OF AN ADJUDICATOR

MADE UNDER PART 9 OF CHAPTER 6

BODY CORPORATE AND COMMUNITY MANAGEMENT ACT 1997

Number of Scheme:	2188
Name of Scheme:	Oceanside Cove
Address of Scheme:	1869 Gold Coast Highway BURLEIGH HEADS QLD 4218

TAKE NOTICE that pursuant to an application made under the abovementioned Act by the Body Corporate for Oceanside Cove

I hereby declare that the Committee for the Body Corporate for Oceanside Cove is authorised to call and conduct the annual general meeting for 2007, notwithstanding that legislative timeframe for the meeting has expired. I further declare that an annual general meeting of the Body Corporate for Oceanside Cove held by 30 September 2007 will not be invalid simply because it is held more than three months after the end of the financial year of the Body Corporate. I further order that the Body Corporate for Oceanside Cove shall include a copy of this order and the statement of reasons in the notice of meeting for the 2007 annual general meeting.

STATEMENT OF ADJUDICATOR’S REASONS FOR DECISION - REF 0652-2007

"Oceanside Cove" CTS 2188

Oceanside Cove community titles scheme (Oceanside Cove) consists of 30 lots and common property. The community management statement (CMS) for Oceanside Cove indicates that the Body Corporate and Community Management (Standard Module) Regulation 1997 (Standard Module) applies to the scheme.

APPLICATION

Under the Body Corporate and Community Management Act 1997 (Act), this application was made by the Body Corporate Committee for Oceanside Cove (applicant) on 6 August 2007, pursuant to a Committee resolution passed on outside a committee meeting on 24 July 2007. The applicant sought a declaratory order in the following terms:

The Committee are applying for the Commissioners Office to provide a Declaratory Order to validate the up-coming Annual General Meeting as it will be held three Months outside the required Three Month period.

JURISDICTION

I am satisfied that this is a matter which falls within the legislative dispute resolution provisions.^[1]

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

Section 60 of the Standard Module provides that an annual general meeting (AGM) must be called and held within 3 months after the end of each of the scheme’s financial year. Time limits are placed on the period within which an AGM is required to be held for a number of reasons, including accountability and accessibility to information regarding the operation of the scheme. In this scheme the financial year end is 31 March and so the AGM must be held by 30 June each year.

The Committee say that the AGM was delayed to enable them to seek legal advice on a proposed Deed of Variation of the scheme’s Management and Letting Agreement. They say that they have now obtained legal advice and are waiting for a new Management and Letting Agreement to be drafted. Accordingly, they expect the AGM can be held no later than 30 September 2007.

Obviously it is preferable that an AGM be held within the prescribed timeframe, and a body corporate should make every effort to ensure that this timeframe is complied with. However, the courts have recognised that the very detailed provisions of the regulations make it almost inevitable that from time to time there will be non-compliance with the legislation. In particular the courts have commented that non-compliance of an insubstantial nature should not be allowed to imperil the actions of bodies corporate or their committees, particularly in the instance of committees where actions are taken in good faith.^[2]

In the circumstances I consider that it is appropriate for an order to be made that the AGM will not be invalid if it is held by 30 September 2007. As the timeframe for the AGM to be held has already expired, the convening and conduct of the AGM would arguably not be valid in the absence of the authorisation of an adjudicator. This would leave the legal status of the Body Corporate in doubt, as well as the validity of any decisions purportedly passed by the AGM if it were not otherwise authorised. This would clearly not be in the interests of owners. Moreover I do not consider that any owner will be disadvantaged by the making of the orders sought.

I have no reason to believe that the Committee has not acted in good faith in this matter. However in future I would caution the Committee to make greater effort to ensure that the legislative requirements are complied with. While it is certainly appropriate for the Committee to ensure that it obtained adequate legal advice before entering into a significant contractual relationship, or a variation of that relationship, the Committee arguably should have acted in a timelier manner.

Accordingly, I am prepared to make a declaration that the annual general meeting will not be invalid merely because it is late. I will make this subject to the annual general meeting being held by 30 September 2007. Given the current date it seems unlikely that the AGM could now be held much sooner than the eight week limit suggested in the application, but I would urge the Committee to act as soon as possible. For the avoidance of doubt I would also formally authorise the Committee to convene the AGM. In addition I have required that a copy of this order and statement of reasons be provided to all owners so they are fully aware of the issue.

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^[1] See sections 227, 228, 276 and Schedule 5 of the Act

^[2] Wei-Xin Chen v Body Corporate for Wishart Village CTS 19482, Appeal 4080 of 2000, District Court Brisbane, 29 May 2001 (Unreported).