O'Quinn Street Apartments [2007] QBCCMCmr 684 (27 September 2007)

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

I hereby order that the application for orders:

Motion 5 and amended Motion 5 be declared invalid.
Motion 10 and amended Motion 10 be declared invalid.
"Lawn maintenance service contractor" approval be given to either Ron's Mowing Service or Bruce's Mowing and Gardening Service to "undertake lawn mowing and edging for the O'Quinn Street Apartments" for a period of twelve months.
Motion 11 be declared invalid.
Dawn Taylor not "be reimbursed from the Sinking Fund for the removal of trees and for repairs to the sewerage pipe".
The engagement of Midwood Body Corporate Management Pty Ltd be declared invalid.
Hartley's Body Corporate Management Pty Ltd be declared Body Corporate Manager for the O'Quinn Street Apartments Community Titles Scheme.
Wendy Colbran the proprietor of Lot 1 is eligible to become an ordinary member of the Committee and declared ordinary member of the committee.
The committee nomination for Melita Cullen for the position of Secretary was at all times invalid.
In the event the committee nomination for Melita Cullen for the position of Secretary was at all times invalid that the proprietor of Lot 1, Wendy Colbran the only valid nominee for the position of Secretary is declared as elected Secretary.
To put the Body Corporate on the correct legal footing that Wendy Colbran the proprietor of Lot appointed administrator.
Any other orders the adjudicator may deem necessary.

is dismissed.

O’Quinn Street Apartments community titles scheme (O’Quinn Street Apartments) consists of seven lots and common property. The community management statement (CMS) for O’Quinn Street Apartments indicates that the Body Corporate and Community Management (Standard Module) Regulation 1997 (Standard Module) applies to the scheme.

Pursuant to the Body Corporate and Community Management Act 1997 (Act), this application was made by Wendy Colbran, Owner of Lot 1 (applicant) on 7 June 2007. The applicant sought the following orders against the Body Corporate for O’Quinn Street Apartments (respondent):

A dispute resolution application[1] seeking substantially the same orders was lodged by the applicant on 12 February 2007. The parties agreed to conciliate that matter on 4 April 2007. I have been provided with the resulting conciliation agreement, in which the Body Corporate agreed to call an Extraordinary General Meeting (EGM) by 1 June 2007 and the applicant agreed to withdraw the application.[2] This application was lodged because no EGM was called.

Under section 243 of the Act, a copy of the current application was provided to the Body Corporate, with an invitation to the Committee and all owners to respond to the matters raised by the application. Submissions were made by the Committee and by the Owners of Lots 2 to 7. The applicant inspected the submissions received and made a written reply.[3]

A dispute resolution recommendation was made referring the dispute to departmental adjudication.

The application raises issues from the Annual General Meeting (AGM) of 9 November 2006.

Although the application includes a detailed history of the scheme and the circumstances leading up to the AGM, the applicant has not sought orders regarding the procedural validity of the meeting as a whole and so I will not summarise that material. The applicant has sought specific orders regarding motions relating to the budget, a lawn maintenance contract, the reimbursement of an owner’s maintenance costs, the engagement of Midwood Body Corporate Management Pty Ltd (Midwood) as Body Corporate Manager (BCM), and committee elections. I will summarise the applicant’s grounds in regard to each specific issue during the course of my determination.

In early July the Committee advised that an EGM would be called for 21 August 2007. I have since been provided with the EGM notice and the minutes. The 21 August meeting was adjourned because of a lack of a quorum and the reconvened meeting on 28 August comprised solely of voting papers from all lots. The EGM material shows that the meeting included the same or substantially similar motions as the AGM with one additional motion. With the exception of the audit motions, the voting was similar and the outcome for each motion was the same.

The Committee’s initial submission said that because most of the application had been dealt with in the conciliation they were limiting their submission to the new issues raised, particularly the reason why the EMG was not called. However, on the basis that I am not privy to the matters addressed at the conciliation, I provided the Committee with a further opportunity to make a submission. This second submission was supported by two Committee members but opposed by the applicant who, following the EGM, is now a member of the Committee.

Further comments regarding the specific orders sought will be addressed in my determination.

The applicant made a lengthy reply to the initial submissions, but said that the submissions did not address or oppose most of the grounds or orders sought. I have found some of the reply difficult to understand. It appears the applicant disputes the Committee’s actions in identifying an administrator for the EGM. She also disputes any inference that she is a serial complainant and other allegations about her and her invitees’ conduct. Much of the reply relates to interpersonal and other issues in the scheme, and I have disregarded this as irrelevant to the orders sought.

In addition to her reply to submissions, the applicant sent 15 items of unsolicited correspondence (totalling over 100 pages) following the referral of the application to adjudication. This correspondence purports to be part of the applicant’s reply to submissions. The applicant was advised in writing on 16 July 2007 that her reply should be limited to matters canvassed or issues raised in the submissions. It indicated that if new material or issues was raised in the reply then the adjudicator has the discretion to disregard the new material in the interests of natural justice.[4]

The need to review this voluminous correspondence has delayed the determination of this dispute. The additional material raises issues relating to the payment of levies, insurance coverage, the role of Midwood, the calling of the EGM, and various Committee decisions. The material substantially relates to events since the AGM and the lodging of the application, and so it has little direct relevance to the outcomes sought here. In that context I do not consider it appropriate to further delay the determination of this application by forwarding the applicant’s new material to the other parties for comment. Accordingly I have largely disregarded the additional correspondence.

I then invited the applicant to comment on the second submission invited from the Committee. In this request the applicant was specifically advised that her reply must be limited to the submission made and that I would only be considering the issues in the original application and not matters arising since that time. Unfortunately it seems that applicant disregarded this information. The substance of the submission (as opposed to other information requested by me) comprised some 10 pages. The applicant’s reply is some two inches thick. She claims that because the Committee’s submission was not confined to the outcomes sought in the application and relates to her character, and so she had to “address the allegations at length”.

The documents discuss issues relating to the original choice of Midwood and the recent vote regarding the BCM at the EGM, missing funds, the preparation and circulation of the Committee submission, communications between herself and the Committee, other legal and police action, the history of the scheme, issues with the EGM. A large volume of unreferenced attachments are included with little or no explanation as to their relevance, along with a full copy (annotated in parts) of the submission and information requested from the Committee. Again I have had difficulty understanding many of the applicant’s points. Of most relevance to the orders sought, the applicant comments that most owners do not live on-site and cannot know how prompt Oris Romeo is, and the minutes of the 2006 AGM note that Peter Taylor said tree roots in Lot 3 damaged the building and sewerage pipes. To the extent that the reply to submissions addresses matters beyond the orders sought by her, I have disregarded the material.

If the applicant has concerns that the legislative requirements have not been met in regard to any of the issues she has raised she should pursue those issues separately. She should first take all reasonable steps to resolve her concerns directly with the parties concerned. If that does not resolve matters, and the issue is sufficiently serious to pursue, she can lodge a conciliation application with the Commissioner. It is certainly beyond the scope of this application for me to determine matters not raised in the orders sought by the application.

Section 242 of the Act places a time limit of three months on applications seeking to invalidate a committee or general meeting, a meeting resolution, or a committee election. When an application is lodged out of time, the Act requires the Commissioner to proceed as if the application had been in time and the adjudicator may waive non-compliance with the time limit for good reason.

This application was lodged almost seven months after the AGM. The delay since February was because the applicant was pursuing the original application and waiting the compliance with the conciliation agreement. It is certainly appropriate that the time limit only apply until the original application was lodged, and recent amendments entrench that. However the original application was lodged just over three months after the AGM. At that time the applicant said the delay was caused by the festive season, the amount of work involved in preparing the application and some ill health. Given the importance for all owners in having the matters in this application resolved, I consider that there is good reason to waive the few days’ non-compliance with the time limit.

Accordingly, I am satisfied that this matters covered by the orders sought in this application fall within the legislative dispute resolution provisions.[5]

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 CMS; 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)).

The application raises issues in regard to several matters considered at the AGM. I have considered each in turn. I note that all lots were represented at the AGM.

Motion 5 sought approval of the proposed budget. The applicant said there was no explanatory note. The meeting agreed to amend the motion by separating it into two motions adopting the administrative and sinking funds. The minutes say both were unanimously approved.

The applicant seeks an order that the original motion and the amendment be invalidated. But she gives no reasons for her objection to the resolutions. Nor does she explain why she voted in favour of the motions at the AGM and now objects to them. The applicant voted against the revised budget motions at the recent EGM. The Committee notes that the reason for the orders sought are unclear and that they do not support them as they are contrary to the majority vote.

In the absence of any evidence or argument from the applicant I do not propose to search out or investigate any potential defects with the motions and will simply dismiss the order sought. Moreover, the passing of the revised Motions 5 and 6 at the EGM have the effect amending or revoking[6] AGM Motion 5.1 and 5.2 and so it is not apparent whether there is any continuing issue.

I refer owners to section 94 of the Standard Module regarding the setting of budgets, section 42C on explanatory material (particularly section 42C(3) regarding budget motions), and section 57 regarding the amendment of motions at a general meeting. But I also note that the courts have commented[7] that non-compliance of an insubstantial nature should not be allowed to imperil the actions of bodies corporate or committees, particularly where actions are taken in good faith. I have received no evidence that any non-compliance in this instance was substantial or that it has disadvantaged owners such that it would have altered the outcome of the AGM.

This motion relates to gardening and lawn mowing services. Oris Romeo has apparently mown common property lawns for some two years but the applicant says there was no resolution approving this work and queries the invoicing. The Body Corporate resolved to obtain quotes for the work in February 2004, and from two particular contractors in April 2006. Quotes obtained in May were not put to the AGM. An owner submitted a motion to award the contract to Romeo, with a quote emailed four days after the meeting notice. The wording on the voting paper motion differed from that submitted, but the owner sought to amend it in accordance with that listed.

The applicant seeks to invalidate the original and amended Motion 10 and to award the lawn maintenance contract to one of the contractors that had previously quoted. But again the applicant does not really explain what her objection with Motion 10 is or why an alternative gardener should be appointed. The Committee says the Body Corporate has enjoyed prompt and professional service from Romeo for nearly two years, and so oppose the order sought. The applicant says other owners would not know if Romeo was prompt but does not comment further on the service provided by Romeo or the reasonableness of continuing to engage that contractor.

The Body Corporate may have previously resolved to seek other quotes, and did so, but it did not resolve to submit those quotes to a further meeting (although that might have been expected). So the Body Corporate did not fail to act on a previous resolution. It was for the Committee to decide whether to submit the quotes to a general meeting, and it was within the power of owners to vote against the contractor submitted to the AGM. Owners would have known that other quotes had been sought and could have queried those if they did not like Romeo’s service or quote.

The applicant comments that the amended motion passed with four votes in favour, one against and two abstentions. The minutes record six votes in favour and one against. Although it does not affect the outcome, no owner has indicated that their vote was incorrectly recorded. A similar motion, albeit with different wording, was again passed by six to one at the EGM.

The applicant has not claimed that the amendment did not comply with section 57 of the Standard Module. While the motion should have been listed exactly as submitted, in light of the amendment, the lack of objection from the submitter, and the voting result, I cannot see that non-compliance was substantial or disadvantaged any owner such that the outcome would have been affected.

In regard to the quote, there is nothing in the legislation that requires quotes to be provided with a meeting notice unless the expenditure is above the major spending limit (in this scheme $1,750), in which case two quotes would normally be required. It is certainly good practice to include quotes or at least specify the cost of the service, but a quote was circulated so all owners were informed.

The applicant also says the budget did not include expenditure for lawn mowing. However the applicant did not substantiate this claim and the AGM notice papers show the administrative fund budget for 2006-07 in fact included $500 for lawn mowing and gardening. Moreover, if there were insufficient allocation for this expenditure the Body Corporate should simply seek to pass a special levy to cover the shortfall[8]. For these reasons, I can find no basis to invalidate AGM Motion 10.
AGM Motion 11 – Owner reimbursement

Motion 11 sought to reimburse the Owner of Lot 3 for the cost of removing trees and repairing sewerage pipes. The Body Corporate had engaged an engineer to investigate movement in Lot 3 and the resulting report in May 2006 indicated that three trees on the western side of Lot 3 were causing localised movement near a toilet in Lot 3. The report recommended the removal of the trees and plumbing checks. At some later time the Owner of Lot 3 independently organised the removal of the trees and repairs to the sewerage pipe at a cost of some $400-500.

Apparently there was lengthy discussion on the issue at the AGM, with the applicant saying the work was not the Body Corporate’s responsibility. The applicant claims the meeting agreed but were ‘sympathetic towards Lot 3’s situation’ and decided to contribute to the repairs. The AGM motion passed with five votes in favour and two against, and by six to one at the EGM.

In general terms sections 109 and 120 of the Standard Module provide that bodies corporate are responsible for the maintenance of common property and owners are responsible for their lots. However determining maintenance responsibilities it is not always straightforward. Utility infrastructure, including sewage pipes, are deemed to be part of common property unless they only supply utility services to one lot, and are within the boundaries of the lot, and are not located within a boundary structure.[9] An owner must maintain utility infrastructure that is within their lot and not part of common property, along with utility infrastructure (such as an air conditioning unit or hot water system), even if it is part of common property, if it only supplies services to their lot.[10] If an owner’s actions (including maintenance failures) causes or contributes to damage to common property or utility infrastructure a body corporate may be could recover the costs which it is otherwise responsible for from the owner responsible, pursuant to section 109(4).

To determine whether the Body Corporate should have been responsible for any or all of the work at issue here, I would need to review information regarding the specific location of the pipes and trees, whether the pipes serviced any other lot, and any expert evidence regarding the reason why the trees needed to be removed and the cause of the damage to the pipes.

The applicant claims that an explanatory note from the Owners of Lot 2 confirms that the trees and sewerage pipe were located within the boundaries of Lot 3. However the applicant has not provided any documentation to support her claims and no explanatory note on the issue was included in the AGM or EGM meeting notices provided to me by the applicant or the Committee. The onus of demonstrating a defect in a motion rests with the applicant. While I have the power to request information, I do not consider that this is warranted where an applicant has made no attempt to substantiate her claims. Ultimately the applicant has provided insufficient evidence for me to determine that the Body Corporate was not responsible for the repairs and so not entitled to resolve to pay for the work on Lot 3. Accordingly I have no basis to invalidate AGM Motion 11.

I do note that if, having considered the information above, the majority of owners are of the view that the Body Corporate was not responsible for the work it is within their capacity to pass an ordinary resolution to revoke or amend AGM Motion 11 (and the subsequent EGM resolution). If owners reasonably believe the work is not the Body Corporate’s responsibility, any compassionate contributions to Lot 3’s costs should be made on by individuals rather than the Body Corporate.

Motion 12 sought to appoint a BCM for a period of three years from 16 November 2006. The motion included three alternative companies – Midwood a rate of $195 per lot per annum, Strata Care Australia Pty Ltd at $180, and Hartley’s Body Corporate Management Pty Ltd at $99 (with each rate not including GST and disbursements).

It was pointed out at the meeting that while a copy of the service agreement for Strata Care and Hartley’s accompanied the meeting notice, no agreement was provided for Midwood. The meeting held over discussion on this item while a copy of a service agreement for Midwood was faxed to the meeting. The resolution then unanimously passed, with five votes for Midwood, none for Strata Care and one (the applicant) for Hartley’s.

The applicant seeks to invalidate the appointment of Midwood and to appoint Hartley’s instead. The basis for the applicant’s objection to the motion and to Midwood is again not explicit, but seems to be the failure to include the service agreement in the notice of meeting.

Section 78 of the Standard Module sets out the form of engagement of a BCM, including that contract of engagement must be in writing, set out the term of the contract, state the functions the BCM is to carry out, state the basis upon which payment is to be worked out, and state any powers of an executive member of the committee that the BCM is authorised to exercise. Section 87 sets out the authority for a body corporate to engage a BCM. A body corporate must pass an ordinary resolution with no votes exercised by proxy.[11] Most relevantly, section 87(2)(c)(i) provides that:

(c) the material forwarded to members of the body corporate for the general meeting that considers the motion approving the engagement, authorisation or amendment includes—

(i) for an engagement or authorisation—the terms of the engagement or authorisation, including—

(B) the term of any right or option of extension or renewal of the engagement or authorisation; and

This subsection does not explicitly say that the terms of the agreement must be included in the notice of meeting, unlike, for example the requirement in section 104(5) of the Standard Module that quotes for major spending must accompany the notice of meeting. It is also not mentioned in the list of examples of those items that the legislation requires to accompany the notice of general meeting.[12] However a plain reading of the subsection is that the “...material forwarded ... for the general meeting...” is intended to mean the notice of meeting.

Section 87(2)(c)(i) does not require the entire written agreement that the Body Corporate must enter into under section 78 to be provided to owners. A summary of the terms would be sufficient. Motion 12 sets out when the engagement begins and ends, and the remuneration, but does not specifically state the functions the BCM is to carry out, or any powers of an executive member of the committee that the BCM is authorised to exercise.

I am of the view that the failure to provide a copy of the service agreement for Midwood, or a summary of the terms of engagement, with the notice of meeting was contrary to the strict requirements of the legislation. I have considered whether it would be just and equitable in the circumstances to invalidate the resolution on the basis of this non-compliance. A copy of the service agreement was distributed to all at the AGM and all lots were represented at the AGM. Therefore owners had the opportunity to consider the terms of the agreement and to change their vote if appropriate. In that context it is arguable that the non-compliance in this instance was insubstantial and that it did not disadvantage owners in that it does not appear that it would have altered the outcome of voting.

The applicant wants Hartley’s to be appointed automatically. If I were to invalidate Motion 12, the appropriate course of action would be to require the motion to be reconsidered. It would not be just and equitable to appoint a BCM who did not have the support of most owners when there was no dispute over the eligibility of the preferred BCM but rather a technical procedural deficiency.
Ultimately I do not consider it is necessary to make an order in respect to AGM Motion 12. This motion was reconsidered at the EGM and the failure to pass the resubmitted motion has had the effect of revoking AGM Motion 12.

I note that the Committee, in light of this dispute, determined that the scheme was ‘effectively without a manager’. However the mere lodging of a dispute resolution application does not prevent motions passed at a meeting being acted on. If an applicant wants a resolution to be put on hold or not acted on while a dispute is resolved, the onus is on the applicant to seek an interim order to that effect. While I do not doubt the Committee acted in good faith in this regard, they were entitled to proceed with the engagement of Midwood as purportedly passed by the AGM unless and until an order was made invalidating the appointment. But it does not seem that the Committee did in fact enter into the three year contract with Midwood. Moreover, as a result of apparent service issues it also seems that owners no longer wish to work with Midwood. There is no indication that Midwood has disputed this.

The Committee is concerned about the impact of any order invalidating the engagement of Midwood. I have not made such an order but I will clarify the situation for owners. All relevant decisions must be decisions of the Committee. A BCM makes no decisions in their own right and acts only under the direction of the Committee. As such the invalidation of a BCM’s appointment would not adversely affect the legitimacy of any actions taken by a BCM on behalf of the Committee or Body Corporate. The only issue that could arise is the authority to reimburse a BCM whose engagement is invalidated. Adjudicators would normally consider that a body corporate should pay a service contractor for work done in good faith under a purported contract of engagement even if there were defects in the terms or authorisation of that contract.[13]

The applicant says that up to and including the AGM held on 11 November 2004 there was no limit on the size of the Committee. However the AGM on 3 November 2005 passed a resolution, by five votes in favour and one against, to limit the Committee to three members until that restriction was changed by the Body Corporate. At the 2006 AGM the applicant objected to this restriction.

Section 9(3) of the Standard Module provides that the Committee must consist of the required number of members for the Committee. Pursuant to the definition of ‘required number’ in the Dictionary in the Standard Module, the required number in this scheme is at least three but not more than seven voting members. This means the Body Corporate can have up to seven members but the Committee can be valid with any number of members between three and seven.

Section 18 provides that a person nominated as an ordinary member of the committee becomes an ordinary member unless it is necessary to have a ballot. It goes on to say that it is only necessary to have a ballot if the number of persons nominated for ordinary member positions (other than those elected to executive positions), plus the number of executive members, is more than the required number. As there are seven lots in this scheme, in the normal course of events all persons who nominate as ordinary members would automatically become an ordinary member if they are not elected as an executive member.

Section 22(3) of the Standard Module would similarly normally have the effect in this scheme that if the number of candidates for ordinary member, plus the number of executive members, is not more than seven, then the person chairing the meeting must declare the candidates elected as ordinary members. Section 22(4) goes on to provide that if the number of candidates nominated for ordinary members, plus the number of executive members, is less than seven, the person chairing the meeting must invite nominations at the meeting to bring the total number of committee members to not more than seven.

However, I also note that section 12(1) of the Standard Module provides that the Committee must be chosen by an election conducted in accordance with sections 13 to 22 “...unless the body corporate decides by special resolution that the members are to be elected in another way.” Therefore, it is arguably feasible for a body corporate to change the committee election procedures in section 18 and 22 so that it is not necessary to fill committee positions beyond the minimum requirement of three members.

The resolution passed on 3 November 2005 clearly satisfied the requirements of a special resolution. But it is less certain whether the wording of the resolution was sufficiently explicit to change the election procedures as allowed for under section 12(1). However, for the following reasons I do not consider it necessary to make a determination on that issue.

Firstly, no owner has sought an order overturning the resolution of 3 November 2005, although the applicant was an owner at that time. The time limit for challenging the resolution has expired and it would be hard to establish good reason to challenge a resolution nearly two years after the event. The Body Corporate is entitled to rely on a resolution until an order is made overturning it.

Secondly, the applicant has provided little argument for her assertion that the Body Corporate is not able to restrict the Committee size. The Committee has not commented on the issue other than to seek direction. Neither side has specifically discussed the validity of the resolution on 3 November 2005 or given any consideration to the application of section 12(1).

More fundamentally, the Body Corporate has now elected four members to its Committee at the EGM. Accordingly, the order sought by the applicant seems unnecessary because she has now been elected to the Committee. In addition it is arguable that the EGM election has had the effect of changing the decision taken on 3 November 2005, as contemplated in that resolution. If owners would like to pursue a three member Committee in future they should consider their options in light of the information outlined above and section 12(1) of the Standard Module in particular.

I appreciate that with a scheme of only seven owners, a Committee of as many as seven members may seem unwieldy. It seems likely that owners also wish to restrict Committee membership to avoid having to elect a member who the majority sees as unhelpful to the smooth functioning of the Committee. In this regard I note that all Committee members elected since 1 July 2007 are taken to have agreed to comply with the legislative Code of conduct for committee voting members.[14] Committee members may be removed from office by an ordinary resolution of the Body Corporate pursuant to section 25(2)(f) of the Standard Module, or under the process outlined in section 25AA and 25AB of the Standard Module if there has been a specific breach of the Code. These processes provide a means to deal with a dysfunctional Committee member as an alternative to seeking to prevent their election or re-election in the first place.

The applicant seeks to invalidate the nomination of Melita Cullen for the position of secretary. She claims that she was the only valid nominee for the position and so also seeks to be appointed as secretary. The applicant does not provide any substantive grounds in support of these orders. She provides a copy of the nomination form lodged by Melita Cullen which, under the heading of the position nominated for, states “All positions incl committee”. However, the statement of grounds merely comments that “Apparently Melita Cullen’s “All positions inc committee” nomination for committee member was deemed to be in accordance with the Standard Module.”

Section 13 and 13A of the Standard Module set out the procedures and requirements for committee nominations. Section 13A(2)(b) specifically provides that the nomination must include “...the position or positions the candidate is nominated for...”. It seems clear that Melita Cullen nominated for all Committee positions on the, as did the applicant albeit using different words.

In the absence of any evidence or argument from the applicant as to how Melita Cullen’s nomination form failed to comply with the legislative requirements I do not propose to consider this issue further. I also consider that the issue has been overtaken by the EGM election.

The applicant has sought an order that she be appointed as administrator to put the Body Corporate on a ‘proper legal footing.’ However the applicant has not provided any grounds specifically in support of this order sought. In particular, she has given no reason why an administrator is required, why the Body Corporate is not currently on a ‘proper legal footing’, or why she is an appropriate person to be appointed as an administrator for the scheme.

Adjudicators frequently appoint administrators for a limited time to convene a general meeting, for example because is no validly elected Committee able to convene meetings for the scheme or an AGM has not been held within the legislative time. On occasions an administrator will also be appointed for a longer period, for example where there has been a substantial break down in the operation of the scheme with repeated failure or refusal of a body corporate to comply with its legislative obligations. The decision to appoint an administrator to take over the running of a scheme is a significant step which adjudicators do not take lightly. It would deprive the right of owners to elect their own committee to administer their scheme on a day-to-day basis. Moreover, depending on who was appointed and whether the body corporate had an existing binding contract of engagement with a BCM, such an appointment could be costly to the body corporate.

Fundamentally, the applicant has not presented any grounds to satisfy me that it would be appropriate to appoint an administrator at this time.

The Committee does appear to have been confused about its role and its responsibilities. Firstly, as noted earlier, the resolutions passed at the AGM, including the engagement of a BCM, were able to be acted on regardless of the lodgement of this application, unless an adjudicator ordered otherwise. Secondly, the onus of administering the Body Corporate on a day-to-day basis rests with the Committee and not a BCM. Accordingly it is the Committee who must ensure that, for example, contributions notices are issued, insurance is paid and that required Committee and general meetings (including the EGM agreed at conciliation) are called. If the Body Corporate has engaged a BCM they can direct the BCM to assist them in performing these administrative roles. But if no BCM was appointed or the BCM was not performing as required under their contract of engagement, the Committee must personally undertake these functions.

However I have no reason to believe that the Committee did not act in good faith in this regard and I consider that these failings can be addressed by the Committee having regard to the guidance provided in this statement of reasons and better informing itself as to its legislative responsibilities. If any owner does not believe the legislative provisions are being complied with they should raise their concerns internally and, if not addressed, pursue each issue in the Commissioner’s Office.

I would also note that, if the situation in this scheme deteriorated and it became appropriate to appoint an administrator to achieve the smooth running of the Body Corporate, it is highly unlikely that the applicant, as a participant in the disputes, would be suitable for appointment as administrator. In such circumstances it would be more usual for an independent person, such as a professional BCM, to be appointed at the expense of the Body Corporate.

In many respects the applicant seems to have pursued minor procedural defects without giving any evidence of the adverse impact on herself or the Body Corporate. While adjudicators have investigative powers under the Act, the onus rests on an applicant to set out in detail the grounds upon which the outcomes are sought, including demonstrating the legal basis upon which the outcomes sought are warranted. In many respects that applicant failed to do this.

As noted previously, I have no jurisdiction in the context of this application to make a determination on the numerous other issues raised by the parties. These can only be adjudicated on through separate applications to the Commissioner, if appropriate.

I have no reason to believe, from the material provided, that the Committee and the majority of owners have not acted in good faith. Their lack of legislative knowledge, and perhaps some poor advice from BCMs, has led to some technical defects in meeting procedures and some other issues may not have been handled as well as they might have been. However I have been given no evidence that any irregularities in the 2006 AGM have substantially affected the outcome of the meeting or resulted in an outcome that was manifestly unreasonable. I note again that the courts have commented[15] 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.

There are also indications that the applicant is similarly genuine in her endeavours to ensure the scheme is administered in accordance with the legislation. However I would encourage the applicant to make a greater effort to work cooperatively with other owners. If she has legitimate concerns that appropriate procedures are not being followed, I would encourage her to assist her fellow owners and Committee members in addressing the concerns in a manner that benefits all owners. If she is unable to resolve her concerns internally she remains entitled to pursue these matters in the Commissioner’s Office. However this should be seen as the last step in the dispute resolution process rather than the first.

Many owners, including the applicant, may be unclear as to their rights and responsibilities under the body corporate legislation. This is understandable as the legislation is complex. However I would encourage all owners to make the effort to inform themselves about body corporate processes. The Information Service of the Commissioner’s Office, provides a variety of education services including the free call 1800 060 119 information line and a range of fact sheets and on-line training available at www.bccm.qld.gov.au . The current Committee in particular should take heed of its responsibility to inform itself about their legislative obligations. They should also bear in mind that they may not take action that has not been authorised by a minuted decision at formal Committee or general meeting. Moreover they should remember that the responsibility for the day-to-day management of the scheme rests with the Committee, and not any BCM who is engaged by the Body Corporate and who must only act under the direction of the Committee.

[1] Dispute resolution application reference 0128-2007
[2] I note that I have not been provided with any other details regarding the matters discussed at conciliation.
[3] See sections 246 and 244 of the Act respectively
[4] See section 244(3) and 269(3) of the Act
[5] See sections 227, 228, 276 and Schedule 5 of the Act
[6] Section 58 of the Standard Module

[7] Wei-Xin Chen v Body Corporate for Wishart Village CTS 19482, Appeal 4080 of 2000, District Court Brisbane, 29 May 2001 (Unreported)
[8] Section 95(2) of the Standard Module
[9] Section 20 of the Act
[10] Section 120(4) and section 109(3)(b) of the Standard Module

[11] The applicant has not indicated that any votes were exercised by proxy on this issue and I note that the lots that were represented by proxy were also represented either personally or by voting paper.
[12] Section 42(3)(f) of the Standard Module

[13] Section 310 of the Act also provides protection for persons who reasonably believe they have entered into a transaction with someone who has the authority to bind the body corporate
[14] See section 101B and Schedule 1A of the Act and

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

Number of Scheme:	30714
Name of Scheme:	O’Quinn Street Apartments
Address of Scheme:	4 O’Quinn Street TOOWOOMBA QLD 4350

Queensland Body Corporate and Community Management Commissioner - Adjudicators Orders

O'Quinn Street Apartments [2007] QBCCMCmr 684 (27 September 2007)