Bonapartes Serviced Apartments [2007] QBCCMCmr 58 (6 February 2007)

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

I hereby order and declare as follows -

1. that the vote on motions 10 and 11 of the annual general meeting held on 19^th December

2006 was 8 – 8 respectively and that these two motions were therefore lost;

2. that the minutes of the said annual general meeting and the records of the body corporate

be amended to show the corrected vote within 7 days of this order;

3. that the body corporate inform all lot owners within 14 days of the date of this order, that this

order has been made and that motions 10 and 11 of the said annual general meeting were

not passed;

4. that motions 10 and 11 of the annual general meeting are not to be acted upon as if such

motions were passed at such annual general meeting of the body corporate, until such time

as the content of the two motions, or either or them, may be passed by resolution at a

general meeting of the body corporate;

5. that the application for an interim order and a final order are hereby combined as a final

order, the effect of which is to correct an error.

STATEMENT OF ADJUDICATOR’S REASONS FOR DECISION - REF 0041-2007

"Bonapartes Serviced Apartments" CTS 16833

APPLICATION

This is an application dated 10^th January 2007 by Eliada Pty Ltd (the Applicant) which company is the owner of Lot 24 in the scheme, against the body corporate for Bonaparte Serviced Apartments (the body corporate) for an order that ordinary resolutions numbered 10 and 11 of the body corporate annual general meeting held on 19^th December 2006 (the AGM), be "counted as lost" because of a miscount of votes.

The director and nominee for the Applicant, Aufridus (Fred) Kempers (Mr Kempers) also seeks an interim order that the body corporate place on hold and not implement ordinary resolutions numbered 10 and 11, pending a final determination of the application, because of the miscount of the votes at the AGM. The Applicant is also the letting agent for the scheme.

JURISDICTION

"Bonaparte Serviced Apartments" Community Title Scheme 16833 is a community titles scheme governed by the Body Corporate and Community Management Act 1997 (the Act) and the Body Corporate and Community Management (Accommodation Module) Regulation 1997 (Accommodation Module). There are 42 lots in the scheme created under a Building Unit Plan of subdivision.

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)).

Section 247(3) of the Act allows the Commissioner to refer an application to an adjudicator for consideration for an interim order even though proper notice of the application has not been given to the body corporate or other affected persons, and despite the fact that parties to the application have not been given an opportunity to make a submission about the matters in dispute. It seems to me that the Act allows this process because applications for interim orders often relate to emergency or otherwise urgent circumstances, where it is simply impractical or impossible to allow a period for submissions prior to the consideration of the application for interim orders. It is also relevant that generally the purpose of an interim order is simply to maintain the "status quo" of a situation, and not finally to resolve the matters in dispute.

Section 279(1) of the Act allows an adjudicator to issue an interim order in response to an application "if satisfied, on reasonable grounds, that an interim order is necessary because of the nature or urgency of the circumstances to which the application relates". Read together with section 247(3), section 279(1) appears to allow an adjudicator to issue an interim order without any reference to other parties to the dispute.

Notwithstanding that the Act allows for interim orders to be issued without reference to other parties, I am of the view that when possible, it is far preferable and more consistent with the principles of natural justice, to allow affected persons to make a submission about an application (even if the time allowed for submissions is necessarily brief) prior to the determination of an application for an interim order. I therefore sought submissions from the committee and the body corporate manager in this matter.

SUBMISSIONS

The Applicant, through Mr Kempers provides a copy of the minutes of the AGM. Motions 10 and 11, described as "ordinary resolutions" sought as follows –

"10 . "That the body corporate directs the caretaker to cease and desist from the date of this approved motion, the leasing of car parks either daily, short term or long term without the express written permission of the committee of the body corporate for each car park. A breach of this direction shall be considered a breach of contract."

"11. That the committee of the body corporate is empowered by the body corporate to approve the leasing of an owners (sic) exclusive use car park only after the receipt of the prescribed application form containing the clause to indemnify the body corporate against any and all claims for damages arising from such approval ( ie the body corporate is not financially liable.)"

The voting on each motion was 8 – 7 in favour.

On 20^th December 2006, the day after the AGM, Jenny Greig for Archers Body Corporate (the body corporate manager), sent an email to the committee advising them that she had not realised that one of the owners present, Mrs L Evans (Mrs Evans), owned two lots, and therefore had two votes to be counted and not just one. This change the votes on both motions 10 and 11 to 8 - 8 on each. Neither motion was therefore carried.

When the minutes were received by the Applicant, they showed that Motion 10 was voted on 8 – 7 in favour, and was therefore declared as carried. Motion 11 was also shown as voted on 8 – 7 in favour but was declared in the minutes to have been lost.

Submissions were sought only from the committee and the body corporate manager in respect of the interim application. The body corporate manager says that she made an error and that only one vote was counted from Mrs Evans on motions 10 and 11. She then sought assistance from the information service of this Office and was advised to circulate the minutes as declared at the meeting. She also then made a typographical error in respect of Motion 11 which should have said "carried" as to the original count, and not "lost."

Peter Dunnet (committee member) and Mrs Evans (secretary) also made submissions saying that this was a simple error and they supported the Applicant.

Chairperson and treasurer, Peter Dollman made a submission on 2^nd February 2007 on behalf of the committee and following a committee meeting held on 1^st February 2007. The committee asks that the application for an interim order be denied since the voting was carried out correctly, the person chairing the meeting declared a "for" result for both motions, and the voting tally was overseen by a professional body corporate manager.

Also, the voting tally was available for inspection at the meeting and the Applicant was present at the meeting. The purpose of the meeting is to ensure full transparency and trust by all members, and the members of the body corporate were only informed privately afterwards that there had been an error and the votes were "now" lost. The committee has found no procedure in the legislation which would "erode this vital principle by allowing recounts of votes in private" after the meeting.

Further, no disadvantage will be suffered in the interim by the Applicant nor the body corporate members since the issue is "purely a management issue in relation to car parking," and there are no issues of safety or public health.

DETERMINATION

Perhaps not surprisingly in the face of the ambiguity in this matter, the Applicant seeks an order which is a declaration that the two motions were lost. His interim order seeks that until the motions may be declared as lost, or otherwise the matter is finalised, that the body corporate does not act as if the motions had been carried, such as is stated in the minutes ( in any event in respect of Motion 10.)

The committee is correct in that there is nothing in the legislation to provide the answer to what to do if the vote is recorded wrongly, typed wrongly in the minutes, or a cast vote is overlooked. Nor are there any remedies given in the legislation for any error. The Act and related Modules would be vast documents if they also contained sections on how to rectify mistakes.

The legislation does however, provide a dispute resolution service where some event has occurred following which the body corporate cannot resolve a problem, and owners or the committee seek a determination as to how to proceed. Human fallibility being understood, the type of disputes which may be dealt with by this Office are only defined by the parties who can bring them. (Section 227 Act.)

In Chen v Body Corporate for Wishart Village CTS194822, His Honour Judge Boulton DCJ considered provisions of the Act’s Standard Module Regulation 1997 and made the following comments:

"The very detailed provisions of the standard module regulation to which I have referred above make it almost inevitable that from time to time there will be non-compliance. Equally though the provisions of the Act make it clear that non-compliance of an insubstantial nature will not be allowed to imperil the actions of bodies corporate or their committees, particularly in the instance of committees where actions are taken bona fide."

To the extent that the Chen decision applies to this matter, I do not find that this error can be considered non-compliance of "an insubstantial nature." The power of members of the body corporate to drive the management of their own schemes is given in the voting process. Lot owners with more than one lot are specifically given more power by having two votes. Voting rights are determined by lot entitlements.

Mrs Evans cast the vote that was not counted, and she has taken steps to support the Applicant. I do not accept that she should have inspected the tally or checked that the votes were recorded correctly. She was entitled to expect that the professional body corporate manager was correctly recording votes, and on hearing the vote, it may not have occurred to her that there was a discrepancy of one vote, or she may have thought that another voter simply had not voted. There are no abstentions recorded but those who do not vote do not have to be recorded as abstaining.

If the body corporate manager had not made the mistake the vote would have been 8 – 8. This fact is not disputed by any of the submitters. It would be inequitable to allow such an error to stand. For this reason, I grant the Applicant his interim order.

Further, since I am simply correcting a mistake, little can be gained from seeking further submissions from body corporate members or the committee. I find that the committee’s submissions have been made following a committee meeting when views have been canvassed, and that the committee has been able to put its case eloquently and well.

However, this matter should be corrected swiftly, and I shall make this interim order, a final order. To that end, I order that the minutes of the AGM and the records of the body corporate are amended within 7 days of this order, and that the body corporate inform all lot owners within 14 days of the date of this order, that this order has been made and that motions 10 and 11 of the AGM were not passed. Whilst I cannot so order, I would expect that the body corporate manager who made the error and then compounded it with a typographical error in the minutes, meets the expense of amending the records, and informing owners. A copy of the reasons for decision does not have to be circulated unless the body corporate wishes to do so.

Number of Scheme:	16833
Name of Scheme:	Bonapartes Serviced Apartments
Address of Scheme:	QUEENSLAND

Queensland Body Corporate and Community Management Commissioner - Adjudicators Orders

Bonapartes Serviced Apartments [2007] QBCCMCmr 58 (6 February 2007)