Ivory Palms Resort [2007] QBCCMCmr 589 (11 October 2007)

Last Updated: 18 October 2007

REFERENCE: 0772-2007

INTERIM ORDER OF AN ADJUDICATOR

MADE UNDER PART 9 OF CHAPTER 6

BODY CORPORATE AND COMMUNITY MANAGEMENT ACT 1997

Number of Scheme:	23175
Name of Scheme:	Ivory Palms Resort
Address of Scheme:	73 Hilton Terrace NOOSAVILLE QLD 4566

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

Peter Edward Lamb, the owner of lot 61

I hereby order that, pending a final determination of this application, the body corporate for Ivory Palms Resort community titles scheme 23175 (including its committee) must not proceed with, implement or otherwise act upon Resolution 9 (Application to Noosa Council for Permanent Occupancy), purportedly made at the Annual General Meeting held on 15 September 2007. This interim order has effect until 12 months have elapsed from the date of this order, a further interim or final order for the application is issued, or until the application is withdrawn, rejected or otherwise ended (whichever is the earlier).

STATEMENT OF ADJUDICATOR’S REASONS FOR DECISION - REF 0772-2007

"Ivory Palms Resort" CTS 23175

Application

This application is by Peter Edward Lamb, the owner of lot 61 (applicant) against the body corporate seeking an interim order, the effect of which would be to prevent motion 9 purportedly passed at the Annual General Meeting (AGM) on 15 September 2007 from being implemented until the validity of that motion is determined.

Minutes of the AGM of 15 September 2007 record the following in relation to Motion 9:

Ordinary Resolution – Application to Noosa Council for Permanent Occupancy

Discussion

Mr Lockwood questioned whether sufficient information had been provided by the owners submitting the motions on the application. He noted that there had been no costs provided or what information the council would require to consider the application. He also questioned whether an impact study needed to be undertaken to properly assess the impact of permanent occupancy on the complex. Mr Staehr advised that he is obligated to present the motions as they are provided and it is up to owners to submit their votes on the information they receive.

The following motion was read to the meeting:

It is resolved that the Body Corporate make an application to the Noosa Council to change the zoning of the complex to allow for permanent occupancy to be permitted in the property.

This motion was declared carried with votes received as follows:

YES: 47 NO: 27 ABSTAIN: Nil INVALID VOTES: 2

The explanatory schedule recorded the following under "Motions Submitted by Committee":

Application to Noosa Council for Permanent Occupancy

This motion is to authorise the Body Corporate to make an application to the Noosa Council to allow permanent occupancy within the complex.

Note: Due to the large number of motions submitted by Lot Owners the submissions have been summarised into one (1) motion.

The voting paper for the AGM records Motion 9 as having been submitted by the owners of lots 28, 80, 88, 106 and 108.

Jurisdiction

"Ivory Palms Resort" is a community titles scheme under the Body Corporate and Community Management Act 1997 (Act) and the Body Corporate and Community Management (Accommodation Module) Regulation 1997 (Accommodation Module). It comprises 133 lots and common property.

In accordance with section 247 of the Act, the Commissioner for Body Corporate and Community Management has referred the application to me to decide whether the nature or urgency of the circumstances of the application warrant an interim order being issued. Section 276(1) of the Act provides that an adjudicator may make an order that is just and equitable in the circumstances to resolve a dispute, in the context of a community titles scheme, about a claimed or anticipated contravention of the Act; or the exercise of rights or powers, or the performance of duties, under the Act. An order may require a person to act, or prohibit a person from acting, in a way stated in the order (s276(2), Act).

Procedural matters

In accordance with the Act, submissions were called and a copy of the application was provided to the owners of lots 28, 80, 88, 106 and 108, the resident unit manager, body corporate manager and the committee with an invitation to make submissions regarding the interim order application.

Submissions

The applicant

•	States that Ivory Palms Resort was built to cater for leisure and conference guests and is zoned for holiday letting. Since the building of stage three, some parties have sort to have the resort be allowed permanent letting.
•	Alleges that, at the time of receipt of the voting papers for the AGM, he did not note the type of resolution Motion 9 was presented as, or that the explanatory note simply paraphrased the wording of the motion.
•	States that he has not been given any indication of the processes involved in making the application and has no idea of any costs involved.
•	Believes that Motion 9 does not follow the clear guidelines as outlined in the "Submitting Motions for a Body Corporate Meeting" Fact Sheet.
•	Believes that Motion 9 should have been presented as a special resolution.

The Owners of Lots 28, 88 & 108

•	Strongly oppose the application.
•	Their reasons for submitting motion 9 include to help offset expenses during quieter times (holiday rentals do not cover all investment expenses), to increase resale value of lots within the scheme (owners have had difficulty selling lots because they’re restricted to holiday letting), for owners to have the option of residing in their lots and that there is a shortage of permanent rentals in the Noosa/Tewantin area.
•	Owner of lot 28 comments additionally as follows:

• Neither the Act nor the Accommodation Module specifies what type of resolution is required in order to pass a motion for body corporate consent to the lodgement of an application to change the zoning of the complex.

• Lot owners are divided between those who wish to have long term accommodation type use and those who wish to have short term accommodation type use.

• Lodgement of the application may not lead to approval.

• Lodgement of the application (even if approved) does not change the use of the complex; it merely provides lot owners and the body corporate with additional choices in the use of the complex. Further resolutions will be required including whether to accept any approval and conditions attaching thereto, whether to approve any funding required to comply with any conditions, whether to consent to a change in the regulation module, by laws etc, whether to lodge an appeal in the event that the application is refused.

• The monetary amount required to prepare and lodge the application would be below the maximum relevant limit for committee spending.

• Owners will have sufficient opportunity to oppose any such change of use through either the development application process and/or in relation to future decisions of the body corporate that will require special resolutions.

• Lodgement of the application will provide owners with further information.

• There are insufficient grounds to invalidate motion 9.

Committee Members Peter Kiernan and Edward Lockwood; Resident Unit Managers Thomas and Collette Hynes

•	Support the application.
•	Edward Lockwood comments additionally as follows:

• Motion 9 was circulated as an ordinary motion without any explanation or impact statement annexed.

• Many owners have indicated that they thought the committee had discussed the motion prior to the AGM and had carried out an examination of consequences to all owners. This was not so; the motion was not supported by the committee.

• Motion 9 has serious owner implications, possible legal ramifications to the owners regarding changes to letting agreements and an impact change to owners who bought knowing the complex allowed holiday letting only.

• Motion 9, as presented to the AGM was unclear, without consideration to impact and was carried on a vote count with one multi-owner (the submitter of the motion) being an investor speculator and a local real estate agent (non-owner) carrying maximum solicitor and proxy votes. This was where a commercial motive was without fairness or true explanation to all owners.

• In his subsequent discussion with several owners, the motion was unclear and misunderstood.

Determination

Section 279(1) of the Act allows an adjudicator to make an interim order if satisfied, on reasonable grounds, that an interim order is necessary because of the nature or urgency of the circumstances of the application. In any consideration of an application which seeks the making of an interim order, it is necessary to determine at the outset whether, because of the nature or urgency of the circumstances relating to the application, an interim order is in fact necessary or appropriate.

The applicant seeks, in effect, to prevent Motion 9 of the AGM of 15 September 2007 from being implemented, until the validity of the resolution is determined. He alleges that the motion was incorrectly submitted as requiring an "ordinary resolution" and should have been designated as requiring a "special resolution". He further alleges that insufficient explanation was provided with the motion. Submissions supporting the applicant suggest that owners may have misunderstood Motion 9 and incorrectly assumed that the committee supported it. In these circumstances, it is appropriate to briefly consider whether the applicant raises any serious legal questions that will need to be determined. If the application raises such a question then it may be appropriate to make an interim order to attempt to preserve the integrity of the matters in dispute until the application is dealt with.

While I am not necessarily persuaded at this stage that Motion 9 required anything other than an ordinary resolution in order to be passed, I note that, had the motion been required to be passed by special resolution, it would have failed. Further, while I am not, at least at this stage, satisfied that Motion 9 is invalid, I agree with the applicant that it does not strictly comply with the "CLEAR" format for the submission of motions recommended by this office in that no expenses involved are specified, nor is any time-frame specified. Further, the information supplied with the motion was scant and it is arguable that a further motion (including a copy of the completed application to Council) would be required to be passed before the application could be lodged in any event. Finally, I am concerned, based on the submission by the treasurer, that owners may have voted for Motion 9 as a result of confusion and incorrectly assuming that the committee supported it, when in fact, the committee did not support Motion 9.

Based on the above, I am satisfied that further investigation is necessary before Motion 9 should be permitted to be implemented. In particular, I am interested in receiving owners’ views as to whether they voted for Motion 9 as a result of any confusion or mistake. In my view, the likely inconvenience should no interim order be granted outweighs any inconvenience likely to result from the interim order.

For these reasons, I have made an order preventing the body corporate (including its committee) from proceeding with, implementing or otherwise acting upon Resolution 9, purportedly passed at the Annual General Meeting held on 15 September 2007 until the application for final orders is determined.

This application will now be administered in accordance with the Act.