Oceanside Cove [2007] QBCCMCmr 572 (27 September 2007)

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 14 October 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.

STATEMENT OF ADJUDICATOR’S REASONS FOR DECISION - REF 0752-2007

"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 19 September 2007, pursuant to a Committee resolution passed on outside a committee meeting on 3 September 2007. The applicant sought a declaratory order in the following terms:

That a Final Order be given to declare the Body Corporate’s Annual General Meeting to be held 14th October 2007 a valid meeting.

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:

(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

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.

On 6 August 2007 the Body Corporate lodged an application to authorise the 2007 AGM being held by 30 September 2007. At the time the Committee said 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 (Agreement). They said they were then waiting for a new Agreement to be drafted and expected the AGM could be held no later than 30 September 2007. On 7 August 2007 I made an order^[2] confirming that the AGM, if held by the date, would not be invalid simply because it was not within the legislative time limit.

Unfortunately this was not the end of the matter. It then appeared that the Committee did not wish to hold the AGM on the weekend of 29 and 30 September 2007 (although it is not uncommon for schemes to hold general meetings on weekends) and that the last date under the order that they wished to hold the AGM was Friday 28 September 2007. The new Agreement was not sent to the scheme’s building manager until 3 September 2007, because of various competing commitments of some Committee members and the Body Corporate’s solicitors. This left insufficient time for the building manager to consider and approve the Agreement for the AGM notice to be sent out with the required 21 day notice period. The Committee then learned that the building manager was on leave until mid September.

It is not apparent the negotiations have concluded on the Agreement but the Committee say they do not wish to delay the AGM any longer. Notice of an AGM scheduled for Friday 12 October 2007 was issued on 21 September 2007. This application seeks validation of that meeting date, although the order sought refers to the 14^th of October rather than the 12^th.

As noted in my previous order, it is obviously 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.^[3]

While I have no reason to doubt that the Committee has acted in good faith, I am concerned that they may have paid insufficient attention to their obligations, particularly in light of my previous order. Having been given a clear date by which they could hold the AGM, being a date they requested themselves, the Committee should have ensured that negotiations of the Agreement could reasonably be completed with sufficient time to convene the meeting and proceeded with the meeting regardless. If the Agreement was not finalised by the date necessary for the meeting notice to be issued, they could simply have called an extraordinary general meeting at a later date to consider the Agreement when it was resolved.

In the circumstances, however, I consider that it is appropriate to order that the AGM will not be invalid if it is held on the date scheduled in the notice of meeting. 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.

Accordingly, I am prepared to make a declaration that the AGM will not be invalid merely because it is late. I will make this subject to the AGM being held by 14 October 2007, although it seems that the meeting will actually be on 12 October. For the avoidance of doubt I would also formally authorise the Committee to convene the AGM.

^[1] See sections 227, 228, 276 and Schedule 5 of the Act
^[2] Reference 0752-2007; Oceanside Cove [2007] QBCCMCmr 473 (7 August 2007)

^[3] Wei-Xin Chen v Body Corporate for Wishart Village CTS 19482, Appeal 4080 of 2000, District Court Brisbane, 29 May 2001 (Unreported).

Queensland Body Corporate and Community Management Commissioner - Adjudicators Orders

Oceanside Cove [2007] QBCCMCmr 572 (27 September 2007)