O'Quinn Street Apartments [2007] QBCCMCmr 690 (17 December 2007)

Last Updated: 21 February 2008

REFERENCE: 0970-2007

INTERIM ORDER OF AN ADJUDICATOR

MADE UNDER PART 9 OF CHAPTER 6

BODY CORPORATE AND COMMUNITY MANAGEMENT ACT 1997

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

TAKE NOTICE that pursuant to an application made under the abovementioned Act by Wendy Colbran, the owner of Lot 1

I hereby order that the application for an interim order by Wendy Colbran, the owner of Lot 1 against the body corporate for O’Quinn Street Apartments community titles scheme 30714 (Body Corporate) that the Annual General Meeting to be held on 18 December 2007 not be proceeded with, is dismissed. I further order that pending final determination of this application, the Body Corporate shall not proceed with, implement or otherwise act upon any resolution passed on the Motions numbered 9 to 16 (inclusive) included on the agenda and stated in the voting paper of the Annual General Meeting dated 18 December 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the date of this order, a further interim or final order for the application is issued, or until the application is withdrawn, rejected or otherwise ended (whichever is the earlier).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 0970-2007

"O’Quinn Street Apartments" CTS 30714

Application
Wendy Colbran, the owner of Lot 1 (Applicant) has sought an interim order against the Body Corporate that the Annual General Meeting to be held on 18 December 2007 (2007 AGM) not be proceeded with. The Applicant seeks a final outcome that Simon Hartley of Hartleys Body Corporate Management Pty Ltd be appointed interim administrator to carry out the functions of the committee and to call and hold an annual general meeting.

Jurisdiction
"O’Quinn Street Apartments" community titles scheme 30714 is scheme under the Body Corporate and Community Management Act 1997 (Act) and the Body Corporate and Community Management (Standard Module) Regulation 1997 (Standard Module).

In accordance with section 247 of the Act, the Commissioner for Body Corporate and Community Management has referred the application to me even though affected persons have not been given notice of the application, or afforded an opportunity to make submissions about the application. Section 279(1) provides that an adjudicator may make an interim order if satisfied, on reasonable grounds, than an interim order is necessary because of the nature or urgency of the circumstances to which the application relates.

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). An adjudicator's order may contain ancillary and consequential provisions the adjudicator considers necessary or appropriate (s284(1), Act).

Investigation
In accordance with the investigative powers of an adjudicator stated in section 271 of the Act:

• On 7 December 2007 I invited submissions from the committee regarding the interim order application, and a copy of the application was provided to Meg Robinson (chairperson and treasurer), Melita Cullen (secretary) and Warwick Johnston (ordinary member).

• On 13 December 2007, I requested C Ann R BCM Pty Ltd (C Ann R) provide a copy of the minutes of the annual general meeting held in 2006; the minutes of the Extraordinary General Meeting held on 28 August 2007 (August EGM) and a copy of any committee resolutions made about the 2007 AGM. C Ann R provided the documentation on the 13^th and 14^th December 2007.

Submissions
The Applicant

• The interim order application is about the substantial break down in the operation of the scheme. Administrative problems commencing since the 2006 annual general meeting include: the absence of insurance for 3 months; the Body Corporate account was opened at a financial institution without authorisation; and owners not receiving notice of contributions payable and copies of resolutions made by the committee.

• There were discrepancies with the convening of the August EGM and subsequent to this meeting C Ann R carried out functions without written authorisation.

• The end of the financial year is 30 September and with 3 weeks until 31 December 2007, the committee has not been held or organised a meeting to prepare an agenda, budgets etc for the annual general meeting.

• The committee is aware of its obligations given the terms of the adjudication made on 28 September 2007. Two months on unilateral decision maker/s are still impeding the property and financial administration of the scheme.

• The other committee members Meg Robinson, Melita Cullen and Warwick Johnston are in avoidance of the committee performing functions set in the Standard Module.

• On 20 November 2007, she wrote to C Ann R reminding the manager the committee must convene a meeting to decide on a date, venue, agenda etc for an annual general meeting.

• Strata and Body Corporate Services (SBCS) were not engaged as body corporate manager by the Body Corporate. The C Ann R instrument of appointment has not been executed.

• On 26 November 2007, she received notice of the annual general meeting from SBCS. She emailed the manager reminding them that the notice was given without committee authorisation. Motions have been incorrectly included on the agenda as being proposed by the committee. The motions on the agenda have the following discrepancies:

−	Motion 1 does not confirm the minutes of the 2006 annual general meeting.
−	Motions 2 to 7 incorrectly state the financial year. Budgets proposing an almost 100% increase have been presented without committee authority. The end of the financial year stated on the voting paper is incorrect adversely affecting the levies.
−	Motion 9 relating to the appointment of a tax agent is unnecessary as income is below the tax free threshold.
−	Motion 10 relates to SBCS having custody of the seal and there is no agreement with SBCS.
−	Motion 11 relating to address for service does not specify the body corporate manager.
−	Motions 12 and 13 about a sinking fund forecast and an insurance valuation were not proposed by the committee.
−	Motions 14 and 15 propose authorising SBCS to do things and there is no agreement.
−	Motion 16 relates to fire escapes and there are no fire escape stairwell entrances.
−	Motions 17 to 21 are included on the voting paper as proposed.

Meg Robinson

• Opposes the interim order application.

• The committee makes decisions by ‘flying minute’ to avoid confrontation and because many owners live interstate.

• Every attempt is made to adhere to the rules.

• The Applicant has replied to the ‘flying minutes’ indicating that there have been decisions to set the date etc for the 2007 AGM.

• Discussions have been held with the body corporate manager and the treasurer in relation to the budgets.

• There have been problems associated with the previous body corporate manager and C Ann R (appointed in August) has performed well to date.

Melita Cullen

• If the Applicant can present any other owner with similar concerns, then she will take steps to put the 2007 AGM on hold.

• The committee and the body corporate manager have sought to ensure the 2007 AGM complies with the Act and is fair to all owners.

• The committee opposes the outcomes sought.

• The increase in the budget is due to no levies being issued by the previous manager and the unusual requirement to still pay this previous management in the 2007-2008 budget.

Determination
The interim order application
Given section 279(1) of the Act, 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 examples included in the Act are suggestive of the usual circumstances where an interim order might be made. Both examples are in the nature of injunctive relief. Whilst the range of matters which might be the subject of an interim order is not capable of definition, the Applicant does need to establish the circumstances of the application warrant the making of an interim order.

The Applicant is a member of the committee and disputes the procedures adopted in relation to the convening the 2007 AGM. She states the meeting has been called and motions have been included on the meeting agenda without proper committee authorisation. Two of the three other committee members oppose the application. Given the meeting is to be held on 18 December 2007, urgent circumstances exist to warrant consideration of the interim order application.

Applicable law
To assist me in determining whether it is just and equitable to grant relief at this stage, before full and final consideration of all the issues raised, I consider it relevant to briefly consider whether the application raises any serious legal question that will need to be determined. If the application raises a serious legal question then it may be appropriate to make an interim order to attempt to preserve the integrity of the matters in dispute pending final determination.

With respect to the administrative arrangements for general meetings, including an annual general meeting, the Standard Module relevantly provides:

• The meeting may be called by the secretary or another member of the committee who has been authorised by the committee (s40(1)).

• A motion may be submitted for consideration by an owner or the committee (s41(1)).

• At least 21 days notice of the meeting must be given to lot owners (s43).

• The notice must contain an agenda, a voting paper and other required documents (s42). The agenda is prepared by the committee (s45). The voting paper must for each motion: state the resolution required; enable a person to cast a written vote; state the motion in the form submitted; and state the name of the person submitting the motion (s42A).

• The annual general meeting must be held within 3 months after the end of each financial year (s60). The agenda for an annual general meeting must include the substance of each statutory motion (s45(3)). Statutory motion is defined in the Dictionary to mean a motion: about presenting the financial accounts; about deciding on an audit for the financial year; about adopting administrative fund and sinking fund budgets for the financial year; about fixing contributions on the basis of the adopted budgets; and about reviewing each insurance policy held by the body corporate. The committee must be chosen at each annual general meeting (s11(1)). The committee must prepare proposed budgets for consideration at each annual general meeting (s94(5)).

The Standard Module provides the procedures and powers of the committee, including provisions relating to decision making by the committee. Relevantly, the committee may make a decision at either a properly convened committee meeting (ss27 to 32B) or by voting outside a committee meeting (s35).

A body corporate may authorise a body corporate manager to exercise some or all of the powers of an executive member of the committee (s119, Act). If there is no committee, the body corporate may authorise a body corporate manager to exercise the powers of the committee and of an executive member of the committee (s120, Act).

Decision
Calling the 2007 AGM
The calling of the meeting could only occur with the authorisation of the committee. C Ann R would seem to have given a memorandum to committee members dated 13 November 2007 seeking approval for the proposed budget, the venue and the date and time of the annual general meeting. The memorandum states "If there are no replies by 21 November 2007 it will be assumed that you have accepted the budget, and the meeting notice will be sent to all owners". C Ann R did not provide a copy of any resolution of the committee in response to this request. While the memorandum may be viewed as a section 35 notice, any motion stated in the memorandum required support from a majority of all voting members before the motion had effect (s35(1)(b)). In the circumstances where this support is not demonstrated, there was no legislative basis for the body corporate manager to call the 2007 AGM.

Notice of the 2007 AGM
Integral to the conduct of any general meeting is the information and documents given to lot owners in the notice of the meeting. A basic requirement for a notice of a general meeting is that it includes that material which is necessary to enable voters to make an informed decision on each motion on the agenda.

The Applicant provided a copy of the notice of the 2007 AGM dated 22 November 2007. This notice lists 21 motions and the election of the committee on its agenda. The notice includes: a voting paper; the committee’s explanatory schedule; a Statement of Financial Performance for the year 1 October 2006 to 30 September 2007 for the administrative fund and for the sinking fund; a Statement of Financial Position as at 30 September 2007; and proposed budgets for the administrative fund and the sinking fund for the year 1 October 2007 to 30 September 2008.

Motions on agenda
The Applicant raises a question about Motion 1 to confirm the minutes of the previous general meeting stating it should relate to the 2006 AGM. Section 45(2)(a)(v) of the Standard Module requires consideration of the minutes of the minutes of the last meeting. It would seem the August EGM is the last meeting. Motion 1 relates to this meeting.

Motions 2 to 8 are statutory motions and the notice contains supporting documentation as required by the Standard Module. While some of the motions may incorrectly state the financial year, the correct year would seem to be stated in the abovementioned supporting documents.

Motions 9 to 15 are stated as being proposed by the committee. As a committee member, the Applicant claims the committee did not authorise the submission of these Motions. No material has been presented to the contrary. The committee can only authorise the submission of a motion for consideration at a general meeting by decision at either a proper committee meeting or by voting in writing. It would seem that there is an absence of proper authorisation for the inclusion of these Motions on the agenda of the 2007 AGM.

Motions 16 to 21 have been submitted by lot owners. The Applicant has a concern about the subject of Motion 16 which has not been disputed in the submissions from 2 committee members. No concerns have been raised about Motion 17 to 21 which are stated as being submitted by the Applicant.

Interim order
The Applicant’s concerns relate mainly to the absence of proper procedure in the convening of the 2007 AGM. The Applicant has correctly pointed to defects in the calling of the meeting and with the inclusion of some motions on the meeting’s agenda. The Applicant also suggests past improper administrative practices are relevant to the interim order application.

There may be a history of disputation within the scheme and the committee may seek to have decisions made by voting in writing because of this issue and because of where owners live. However, these circumstances are not a basis for shortcutting legislative procedures. The body corporate manager could not proceed with the calling of the 2007 AGM without proper authority of the committee. Further, motions could not be submitted by the committee without its authority. Nothing has been provided demonstrating committee authority has been given in a way prescribed by the Standard Module. In this regard, I am of the view the Applicant has raised a serious question to be determined. However, in the circumstances I am not persuaded it is appropriate or necessary to make the interim order sought. In my view, the likely inconvenience should the interim order sought be granted outweighs any inconvenience likely to result from this interim order not being made.

The annual general meeting is fundamental to the administration of a body corporate given that one of its primary purposes is to deal with the body corporate’s financial management arrangements. This meeting and especially any consideration of the statutory motions should not be disrupted unless there is a compelling reason. In this case, it is apparent the meeting is being called within the 3 month window prescribed by the Standard Module; owners have been given at least 21 days notice of the meeting; the notice includes statutory motions and motions submitted by owners in a form required by the Standard Module; and the notice includes the financial documentation required by the Standard Module. While the Applicant is concerned about some of the proposed statutory motions, it is apparent these motions have the support of at least 2 of the 4 committee members. The extent of non-compliance highlighted by the Applicant is not likely to impact on the ability of members to participate in the decision making process as they have been given adequate opportunity to vote on the Motions as presented. While the Applicant has expressed concern about the general administration of the Body Corporate, this issue does not warrant making the interim order sought. For these reasons, I do not consider the 2007 AGM should be stopped.

Given the question raised by the Applicant, I have also briefly considered the motions included in the agenda of the 2007 AGM.

I do not consider an interim order is warranted about Motion 1.

The statutory motions deal with matters integral to the management of the Body Corporate. The Body Corporate requires contributions from owners to fulfil its legislative obligations. While the Applicant has expressed concern about the proposed increase in the contributions payable should a budget be adopted, she has not raised a serious question about this issue. I am not satisfied an interim order is warranted about these Motions.

I consider a serious question exists about Motions 9 to 15 given the absence of proper committee authorisation. Motions 9, 10, 14 and 15 refer to SBCS when it would seem (from the minutes of the August 2007 EGM) that C Ann R was engaged as body corporate manager. Nothing has been presented indicating the relationship between the Body Corporate and SBCS. I am not aware of any urgency in implementing any of the Motions. For these reasons, I have ordered that any resolutions passed on these Motions not been proceeded with or implemented pending final determination of the application.

Motions 16 to 21 would seem to be submitted by lot owners. While the Applicant questions the subject matter of Motion 16, she has not disputed the inclusion of these Motions on the agenda of the meeting. The issues raised with respect to Motion 16 have not been disputed and if the Motion is passed, it could be implemented before final determination. For these reasons, I have ordered that any resolution passed on this Motion not be proceeded with or implemented. Motions 17 to 21 are noted in the voting paper as being submitted by the Applicant. The Applicant has not raised an issue about the inclusion of these Motions on the agenda. In the circumstances, I do not consider the questions to be determined to which I mentioned above warrant interference with determination of these Motions.

This application will now be administered in accordance with the Act and the normal processes of this Office. The application will be finally determined in due course.