O'Quinn Street Apartments [2008] QBCCMCmr 104 (20 March 2008)

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

I hereby order that the application for an order

“1. THAT Simon Barnard (MCTIQ) of Hartley’s Body Corporate Management Pty Ltd be appointed an interim Administrator to the scheme to carry out the functions of the Committee and to call and hold an Annual General Meeting;

THAT Simon Barnard (MCTIQ) of Hartley’s Body Corporate Management Pty Ltd be appointed an interim Administrator to deliver day to day management, consider property and financial affairs, and take appropriate action; “

is dismissed.

I further order that resolutions passed on Motions 9 – 16 on the agenda of the annual general meeting for 18th December 2007 may be proceeded with, implemented or otherwise acted upon.

APPLICATION

This is an application dated 7th December 2007 by Wendy Colbran (the Applicant) owner of Lot 1 in the scheme against the body corporate of the scheme (the body corporate) for orders as follows –

The Applicant also sought an interim order that an annual general meeting (AGM) to be held on 18th December 2007, not proceed.

On 17th December 2007, an adjudicator made an order that the AGM could proceed but that the body corporate might not proceed with, implement or otherwise act upon any resolution passed on motions numbered 9 – 16 inclusive on the agenda.

“O’Quinn Street Apartments” CTS 30714 is a community title scheme governed by the Body Corporate and Community Management Act 1997 (the Act) and the Body Corporate and Community Management (Standard Module) Regulation Module 1997 (Standard Module). There are 7 lots in the scheme.

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)).

The Applicant submits that the operation of the scheme has broken down, explaining that there have been administrative problems since the 2006 Annual General Meeting. The scheme was established in October 2002, but there were only spasmodic committee meetings held, and the committee uses the procedure of voting outside a committee meeting (“flying minutes”) to pass resolutions. Following the AGM of 2006, the chosen body corporate manager’s (Midwood’s) contract was not executed, the insurance lapsed for a period of three months, and the body corporate manager continued to act but contribution notices were not issued, and the Applicant was not given minutes of committee resolutions, nor advised of a general meeting to be held on 21st August 2007. The meeting was subsequently reconvened but the Applicant was not advised.

The reconvened meeting was a chaired by an administrator C Ann R BCM Pty Ltd. There were two motions on the agenda for the appointment of body corporate managers. One offered a choice between Hartley’s Body Corporate Management Pty Ltd, Midwoods or Strata Care Australia Pty Ltd. The other was a separate motion for the engagement of C Ann R BCM Pty Ltd (C Ann R )as body corporate manager. This motion was passed.

The Applicant says that C Ann R issued incorrect levy notices. Then Strata and Body Corporate Services “sprang up” and there appears to be two separate business entities acting for the scheme as body corporate manager concurrently, each sending notices headed with its own business name. In February 2007, previous body corporate manager Midwood had closed the Heritage Bank Account and opened one at Macquarie Bank; after the general meeting in August 2007, the Macquarie Bank account was closed and an account was opened at Westpac. Strata and Body Corporate Services then again proposed to close the Macquarie Bank account and open one at the ANZ. This changing of bank accounts “is interrupting proper accounting of monies held and disbursed frustrating financial affairs.”

Further the Applicant says that there is no executed engagement between the body corporate and C Ann R.

The committee has ignored the Applicant’s request for “accountability of $1050 paid into the Macquarie Bank account.”

The end of the financial year is 30th September but at the lodging of this application (on 7th December 2007) the body corporate committee had not convened a committee meeting in order to set the date and venue, and to discuss the agenda and budgets for the annual general meeting which must be held by 30th December. The Applicant says that the Committee does not abide by the Standard Module. She is a member of the committee but continues to be ignored by other committee members when she provides helpful advice about the legislation.

C Ann R sent a “memorandum to committee members” (the memorandum) asking the committee to approve the accounts for the financial year ending 30th September 2007, and attaching the proposed budgets for the sinking and administrative funds. C Ann R also suggested a “tentative date for the Annual General Meeting.” C Ann R said if there were no replies by 21st November 2007, it would be assumed that the committee members had accepted what C Ann R had proposed, and that C Ann R would send out notice of the AGM. On 20th November 2007, the Applicant wrote to C Ann R saying that that the committee must convene a meeting in order to approve the date, venue and approves the agenda and budgets of the annual general meeting and that the body corporate manager should not be sending out the notice of the AGM to members without the committee’s express approval. There was no reply to her letter.

On 26th November 2007, the Applicant received a notice for the AGM from Strata Body Corporate Services (Strata). The Applicant emailed Strata that there had been no committee meeting to set down date, venue etc. She found Strata unhelpful and the annual general meeting was set for 18th December 2007. The agenda indicated that Strata had been in touch with committee members, of which the Applicant is one, but she was ignored. The motions listed as “proposed by the committee” are not validly proposed by the committee. Strata has proposed a budget which is a 100% increase on the budgets adopted by the body corporate in August 2007, and the voting papers had the wrong financial year on them which the Applicant says “adversely affects contribution levies and levies already paid” .

Her concern is that that neither of the body corporate managers apparently now acting is properly engaged and there has been no committee meeting to adopt the proposed budgets. She suggests that it if a copy of a contract is requested, it will be signed retrospectively.

She fears that she will continue to be ignored by any committee and requests that an administrator be appointed to carry out the functions of the committee, and to call and hold the AGM. She has contacted Simon Barnard of Huntley’s who is willing to perform this task. The Applicant provides a letter dated 6th December 2007 from Simon Barnard, director of Hartley’s Body Corporate Management stating that it can call, hold and chair meetings if requested at a fee of $107. She has no relationship or personal interest in his appointment.

The Applicant’s objections to the motions put forward to the AGM of 2007 were outlined thus by the Adjudicator making the interim order-

The body corporate was invited to make submissions at the interim stage of this application. Mary Robinson (Ms Robinson) chairperson of the scheme said that background issues raised by the Applicant had been covered in a dispute resolution application lodged by the Applicant, and determined by an adjudicator in 2007. She explained that the committee has resolved to hold meetings only by flying minute for “a couple of years” to avoid contact with each other. There is continual confrontation with the Applicant, and many of the committee members live interstate. There was poor service from a previous body corporate manager but they are all doing their best to straighten things out as the Applicant knows. The Applicant has received all correspondence sent to committee members. She points out that the body corporate has been given the opportunity to appoint Hartley’s on two occasions and on both occasions the vote has been against appointing them.

Melita Cullen, (Ms Cullen) secretary of the scheme, said that the 100% increase in levies was because no levies were issued by the previous body corporate manager and the body corporate manager still had to be paid from the 2007-2008 budget. She also says that the body corporate has to make submissions to the Applicant’s allegations “3 or 4 times in a year” and that the Applicant is continually disruptive. She advised that the current body corporate manager was approved 6 – 1 at the “most recent EGM” and is the desired provider. The scheme has had three body corporate managers in less than 12 months mostly due to the Applicant’s behaviour.

The adjudicator sought copies of minutes of meetings of the extraordinary general meeting held on 28th August 2007, the AGM of 9th November 2006 and other documents from C Ann R which were provided on 13th December 2007. C Ann R also provided an email stating that replies to the memorandum sent on 13th November 2007, were received from all committee members who were in favour of proceeding as suggested by C Ann R except the Applicant. C Ann R confirmed that it was in contact with the treasurer before drawing up and presenting the budgets shown in the memorandum.

Final submissions were invited from all lot owners in accordance with Section 243(2)(b) Act.

Ms Cullen says it is no longer funny that the Applicant criticises on technical grounds everything which the committee does. The Applicant generates an excessive amount of work for the committee and the body corporate manager and she puts a financial burden on the scheme by seeking re-confirmation of votes. Generally the vote is 6 – 1 against the Applicant. The remainder of lot owners are at a loss to know how to live peacefully with her. She has made applications to the Commissioner’s Office for 5 years now.

Ms Robinson and Brian Cronan (Mr Cronan),co-owners of Lot 2, say that the Applicant does what she likes in the scheme. The body corporate has approved retrospectively all sorts of things that she has done and improvements which she has made, without authorisation. She just pushes the body corporate to go to court, the Commissioner’s Office or the police. Other lot owners admit to ignoring her as it is the only way they can deal with such a personality. They believe that C Ann R purchased another management company called Strata and Body Corporate Management, but they do not have the details of ownership. All lot owners, and presumably the Applicant, received from C Ann R a notice saying that C Ann R was moving offices and was to be known by the new trading name of ‘Strata and Body Corporate Services’ as from 1st September 2007. The notice contained new contact details, phone and fax numbers. The Applicant sent a fax to Strata on 29th September 2007, quoting the phone and fax numbers so she must have known of the new details. They provide a copy of the notice from C Ann R which was received prior to 1st September 2007, and a copy of the Applicant’s fax.

Dawn Taylor, owner of Unit 3. She says “anything that all other owners like, Ms Colbran doesn’t.” She agrees that the Applicant is ignored because “she turns everything into a fight.” It has been difficult because of this to get another body corporate manager to work for them. Her main concern is that the insurance is paid, the gardens are neat and tidy, the units maintained and that people treat each other with respect. She says :...”once that happens, if we haven’t had quite enough notice for a meeting or something like that I know everything that is done is done in good faith......” The committee has her full support.

Craig Stower, owner of Lot 4 says that the Applicant’s many applications (to this Office) impact directly on the daily management and business and harmonious environment of scheme. He is concerned that the number of applications on record will put buyers off so that she affecting the value of units.

The body corporate made a submission signed by Ms Cullen, Ms Robinson and Warwick Johnston, the committee (save for the Applicant) existing at the time the application was lodged. There is a new committee since the AGM of 18th December 2007 elected after the interim order was made. The body corporate says that it is exhausting trying to respond to the Applicant’s applications to this Office. If there were any errors in procedure, they are regretted and unintentional. There is no support in the scheme for the Applicant’s outcomes sought. It says: “We have already voted against having Hartley’s as administrator at the AGM of 2006 and EGM of August 2007. It would be our fourth manager in 14 months. “ Further it says that the paperwork for the 2007 AGM was produced with input by multiple committee members. Unfortunately it was not recorded in writing but the voting papers do represent the wishes of the committee with regard to insertion of motions on behalf of the committee.

Warwick and Jenny Johnston, owners of Lot 7 say that they object to the outcomes sought strongly. The outcomes sought are contrary to the wishes of all the others. “The issue of Hartley’s has been decided on two previous occasions.” They have full trust in the committee and management, and even if there was an unintentional technical error, the desired results are abundantly clear.

The Applicant exercised her write of Reply. She commences with her observations in inspecting body corporate records on 23rd January 2008. She brings up many matters which are not relevant to the outcomes sought in her Application and which post-date the application.

She attaches a letter from Strata dated 3rd December 2007 apologising for the error made in the financial year in motions to be put to the AGM on 18th December 2007. The financial year should have stated “September” and not “June”. The letter also apologised for leaving Michael Cullen off the list of nominees for committee.

She says that the AGM of 18th December 2007 was actually held on Christmas Day, having been adjourned from 18th December 2007 as there was no-one present, according to the minutes of the meeting. She says that at that time the offices of Strata were closed.

She again gives her concerns recited in the application as well as providing a letter from Suncorp saying that the body corporate insurance was cancelled on 3rd December 2006 due to non payment of premium. She has conducted internet searches into the relationship between C Ann R and Strata and found that there is “a debt collection arm not previously disclosed to the body corporate.” She provides a copy of Strata Data Report’s website and highlights that this company whose principal is the same as C Ann R’s principal, Carol Robinson, offers body corporate searches and are licensed process servers. She is concerned that the body corporate appears to have an Australian Business Number on the letterhead used by the body corporate manager, and that that it has never had one before, and no-one has been authorised to obtain one.

She casts doubt on the validity of Brian Cronin’s signature on the submission sent to this Office.

She says that C Ann R was appointed at the EGM in August and “nothing has been presented indicating the relationship between the body corporate and SBCS (Strata).”

She says that she was left out of any committee discussion about the budget, and provides copies of emails dated 17th November and 21st November 2007 from Michael Cullen (who was not a committee member) to Strata telling Carol Robinson to go ahead with the mail out, and that “Meg and Melita have conferred”... but there had been no reply “from Wendy or Warwick.” She also provided copies of emails saying that her motions put to the AGM would be voted against by the others. She is concerned about “malicious gossip, and facts being obscured.” The committee has its own agenda, it acts unprofessionally and generates ill will.

An example of this ill will is provided by copies of emails in March 2007 between Ms Cullen and the then body corporate manager Midwoods. The Applicant highlights Midwoods as saying “...one good way to fix Ms Colburn” and “the majority of (sic) view of Owners will prevail.”

She says that only she and Ms Robinson are resident in the scheme, and that her only contact with the secretary is by mail. She disputes that there is any record of the committee decision to hold meetings always by the “flying minute” procedure.

She says that the body corporate manager was not appointed fairly at the EGM in August 2007 and that Strata and C Ann R are two separate business entities.

She disputes that the committee commenced the AGM proceedings months in advance, since she is a member of the committee and was excluded. She says that C Ann R are still getting it wrong after 5 months in the role.

In the interim order made on 17th December 2007, the adjudicator recited the applicable law.
He found that there was no legislative basis for allowing anyone other than the secretary of a scheme, or another committee member authorised by the committee to call an annual general meeting, and that the body corporate needed a majority vote of the committee to enable it to call the AGM. Furthermore, the committee had to prepare the budgets for the AGM (Section 94(5) Standard module.) The committee could not be “assumed” to accept the budgets as drafted by C. Ann R in its “Memorandum to all committee members” dated 13th September 2007.

He said that the “Memorandum” could be taken to be notice of a decision to be made outside a committee meeting (section 35 Standard Module) but that there was still no resolution of the committee documented that the motions proposed had been passed.

However, despite the failure to comply technically with the requirements for calling an annual general meeting, he allowed the AGM to proceed in the interests of convenience to the body corporate and so that the “statutory motions” could be considered within the financial year as required by law.

He considered that the Applicant had demonstrated prima facie, that a ‘serious question’ could exist about Motions 9 to 15 “given the absence of proper committee authorisation.” He was also concerned that the AGM of 2006 had approved the engagement of C Ann R as body corporate manager and that no link had been demonstrated with that company and Strata, apparently acting as body corporate manager and referred to in Motions 9, 10, 14 and 15 . He also found that there was some mystery about Motion 16 that needed further investigation. He ordered that if passed by resolution of the body corporate at the AGM, no action should be taken on Motions 9 – 16 on the agenda, until the finalisation of this dispute.

An interim order is in the nature of an injunction, or “holding order” so that where a prima facie case has been made out by an applicant, the status quo is preserved until further consideration can be given to the issues and further investigations made in respect of them. The adjudicator therefore decided to put on hold any action flowing from the AGM which he considered might be detrimental in the event for example, that the motions were not what had been proposed or approved by the committee, and about which further investigation or evidence was needed.

In this final determination, more information has been received and submissions have been made on the final outcomes sought, ie. the request for an administrator to be appointed.

In addition Motion 13 had no proposer and there is the fate of Motion 16 to be determined.

The first point has been partly dealt with by the Adjudicator in the interim order. Whilst there was a failure of process, the AGM proceeded, since the technical failure was less disruptive to the scheme than the cancellation of a general meeting of which all lot owners were aware and had had correct notice. He said that Motions 1 – 8 should not be stayed. The body corporate says that the failure of the correct procedure was a technical error, and that replies to the memorandum “were received in favour from all except Wendy” following the sending of the memorandum. No further evidence has been supplied that the committee has retrospectively approved the calling of the AGM and Motions 1 – 8, the “statutory motions.”

The committee should in due course provide proper minutes in accordance with the legislation and for the body corporate record of the fact that the committee approved at a committee meeting or outside a meeting (by the section 35 Standard Module procedure) the date and venue of the AGM, as well as the budgets proposed and that matters relating to Motions 1 – 8 should be put on the agenda. There is no reason why such an error cannot be corrected retrospectively.

His Honour Judge Boulton DCJ in Chen v Body Corporate for Wishart Village CTS194822 said in considering the provisions of the Act’s Body Corporate and Community Management (Standard Module) Regulation 1997 :

“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.”[1]

I note from the minutes of the AGM provided by the Applicant with her Reply that the budgets were adopted.

I now turn to the second point. The submission from the committee says that the papers for the 2007 AGM “were produced with input by multiple committee members. Unfortunately it was not recorded in writing but the voting papers do represent the wishes of the committee with regard to insertion of motions on behalf of the committee.”

There are no submissions from the body corporate or other lot owners that the Applicant was in fact aware of motions 9 – 15 to be placed on the agenda as “committee motions.” (I am including Motion 13 as a “committee motion” although this was not stated on the agenda, it appears in the body of the “committee motions.”) Whilst the Applicant was in receipt of the memorandum, there were no draft motions 9 – 15 with that document. Nor is it argued by the body corporate that the Applicant could not be contacted or that she was difficult to locate, or that for some reason the approval of the “committee motions” had to be made in her absence.

The procedure undertaken demonstrates a failure on three counts: firstly to include the Applicant, a committee member, in the “input” referred to in the body corporate submission; secondly, to take a committee vote on the decision; and thirdly to record the outcome of that vote. I have no doubt that what the former committee is saying is true, that had the committee made a decision, either by voting outside a committee meeting, or at a committee meeting, then it would have decided (probably by a majority rather than a unanimous vote) to put forward those motions to a general meeting as motions of the committee. However, the Applicant was not invited to a forum whereby she could cast her vote, and this is clearly contrary to the process described in the legislation. The fact that it is obvious to all, even the Applicant, that the majority of members of the committee are in favour of a certain action, does not excuse the committee from making a decision in a way in which all committee members have the chance to cast a vote, however this chance may be offered.

Many small schemes, or schemes where owners are interstate, in fact conduct committee meetings by telephone conference or linking up without being physically present. This Office has never ruled that this practice is unlawful since it is the object of the Act to allow lot owners to manage a scheme in the best way for them, albeit within the framework of the legislation (Section 4 Act). Voting members for the committee need to be “present” (Section 32(2) Standard Module) but that does not necessarily mean “present in person.” In my view, there was therefore no need for a committee meeting to be convened whereby committee members assembled in the same room to cast their votes. The committee might have made a decision by telephone link up or in some other way which gave an opportunity for each committee member who wished to take part, to be heard, and to vote; or the committee might have decided to vote on each motion outside a committee meeting by using section 35 Standard Module, which although created so that committees might vote on specific motions in an emergency, for example, by contacting as many committee members as possible, is often used by committees where owners are not resident in the scheme. In either case, the Applicant should have been contacted and been given the opportunity to vote on whether the “committee motions” should be put on the agenda.

However, despite these failings by the body corporate, the Applicant has not demonstrated in any way that she or any other lot owners have suffered from being excluded from the preliminary process.

The copy of the minutes of the AGM provided by the Applicant in her Reply shows “Pending Adjudicator Outcome” as the result of the vote on Motions 9 – 16 inclusive. However, I understand that these motions were voted on and that the vote was 5 – 1 in favour on each of those motions. The action to be taken upon these motions depends on this final order.

In respect of the “committee motions” 9 – 15 inclusive, I note as follows –

Motions 9 and 15 concern services to be offered by the body corporate manager. Motion 9 is for the body corporate manager to engage a tax agent; Motion 15 is to authorise the body corporate manager to take appropriate legal action in the event of the need to recover a body corporate debt from a lot-owner. It includes a statement that the lot-owner pay “on demand the whole of the Body Corporate’s cost and expenses (including solicitor and own client costs) incurred in recovering the amount outstanding.”

I have some concern with both these motions in that there is not normally any reason for a body corporate to file a tax return (although some certainly do); and part of Motion 15 may be unenforceable since this Office has often ruled that the costs of chasing a body corporate debt may not be recovered from a debtor lot-owner unless a court makes a ruling as to costs. There is no legislative or common law basis for persons to reclaim their legal fees when someone owes them a debt.

Motion 10 is for the body corporate manager to keep the seal in its custody and use it as directed by the body corporate in accordance with section 139 Standard Module. Motion 11 is for the registered address of the body corporate to be changed in the Land Titles Registry to the address of the body corporate manager. Both of these motions are usual where a body corporate manager is engaged. There registered address of the body corporate is the place at which documents may be served on the body corporate, so by changing this address to the address of the body corporate manager it may necessitate future change if the body corporate manager changes. However, that is entirely a matter for the body corporate. Particularly in a scheme where most owners are not resident, it is wise to have an address separate from the scheme address for the receipt of documents which might need to be served on a body corporate. The Applicant points out that lodging a change of address costs a fee (which the body corporate has previously had to pay in respect of the change to the last body corporate manager.) She says that the fee is unauthorised, but if the body corporate accepts such a motion, it follows that payment of the necessary fee, which is well within the limit of committee spending, must be paid.

Motion 14 authorises the body corporate manager to sign a by-law contravention notice on behalf of the body corporate. This again, is a proper function for a body corporate manager if authorised by the body corporate, and to be used when acting under the instruction of the committee to issue such a notice.

Motion 12 is for the body corporate to engage expert help to prepare a sinking fund forecast, and Motion 13 is for the body corporate to seek help in preparing an insurance valuation. Whilst there is no legislative requirement for a body corporate to engage experts to prepare sinking fund forecasts or insurance valuations, this is entirely a matter for the body corporate.

Whilst I have concerns about Motions 9 and 15, this application did not seek to invalidate motions. The concern of the Applicant was that the motions proposed as “committee motions” were not in fact proposed by the committee or authorised by the committee in the manner required by law. I have accepted that to be the case. However, the vote by the body corporate at a general meeting in favour of these motions outweighs the technical non-observance by the committee. There would be no purpose in invalidating Motions 9 – 15 because they were not in fact “committee motions” where the body corporate so clearly wishes to proceed with them. The result would be for me to order another general meeting, at which any motions proposed by the committee would be properly authorised, and the vote by owners would then be the same.

It is up to the body corporate if it wishes now at another general meeting to revoke any motions passed at the AGM. The committee or any lot owner may propose motions. A body corporate manager may not propose motions, although a body corporate manager often assists the committee by drafting a motion for the committee.

In respect of Motion 16, which is the only “non-committee” motion put on hold by the interim order, the motion was for “fire escapes and entrances” to be kept clear and that signs to this effect be erected. The Applicant says that there are “no stairwell entrances”, although I do not find the two descriptions necessarily conflict. The idea seems to be that all exits/entrances for use in a fire be kept clear, be they stairs or corridors or roadways. The fact that a motion proposed by a lot owner is not clear, or even impossible to achieve, is not in my view a reason for it to be excluded from a meeting. The committee or body corporate manager is required to accept a motion in the words in which it is submitted, although it can suggest that the submitter re-frames the motion in a clearer way if there is time to do so.

In any event, if the signs will be within the limit of committee expenditure, that is, a sum equivalent to $125 x the number of lots, this may be something which the committee could have decided without putting it to a general meeting.

I make no order to invalidate any of Motions 9 -16 as voted on by the body corporate, and will order that the body corporate may act upon any resolution passed.

The status of Strata and Body Corporate Services
The Applicant says that there is no signed contract with C Ann R, and nothing to show the relationship between C Ann R and Strata who has suddenly “sprung up” and is acting as body corporate manager.

I have been provided by C Ann R with an agreement, signed by a director of C Ann R and a committee member and bearing the seal of the body corporate, that C Ann R will act as body corporate manager for a term of one year commencing on 21st August 2007 (but curiously ending on 1st August 2008.) with a two – year option to renew. The body corporate voted 6 – 1 in favour of the appointment of C Ann R on 28th August 2007, that a three year contract would be entered into as from 21st August 2007. I would not now consider any allegations, if any remain, that the motion to engage C Ann R was not properly put. The meeting was over 4 months prior to this application being made and C Ann R has now acted in the role for nearly 7 months. The Applicant says that C Ann R was chosen unfairly and that C Ann R was not acting in the body corporate’s best interests at the time of the meeting on 21st August 2007 since C Ann R was chairing the meeting as a voluntary administrator. This information is part of the Applicant’s submission that such actions by the body corporate or its manager demonstrate the need for an administrator to be appointed to the scheme.

Evidence has been produced by Ms Robinson and Mr Cronan that prior to 1st September 2007, they received a flyer from C Ann R saying that as of 1st September 2007, C Ann R was moving to bigger premises and changing fax and phone contact details. The company also advised :
“Our new trading name will be Strata and Body Corporate Services.”

On 29th September 2007, the Applicant contacted Strata by name citing the phone number and fax given in the flyer, and asking for two motions to be put on the agenda for the AGM. These motions subsequently appeared on the agenda as motions 17 and 18. The Applicant does not confirm or deny that she ever received the notice about the change of name, and may have been contacting Strata after she received notice of the AGM on 26th September 2007. She does not address Ms Robinson’s and Mr Cronan’s inference in her very detailed Reply. Her only remark about the submission of Ms Robinson and Mr Cronan is that Mr Cronan’s signature appears not to match another copy of his signature in her possession, although she does not invite me to draw any conclusions from that other than that the submission might not have been from two co-owners but only from one. I am at a loss to know how that would affect the weight of the submission even if the allegation was true, and there is no evidence whatsoever, eg from an expert in handwriting, that this might be true.

The Applicant provides copies of the searches she has made about C Ann R and Strata (since the lodging of this application) but nothing provided suggests to me anything other than that C Ann R and Strata are related companies, Strata being the business name of C Ann R. If the body corporate engages contractors and those contractors make arrangements with other entities for the way in which their business interests are to be held, the contract with the body corporate remains valid, whatever the name of the contracting entity becomes.

In her Reply, she says that “nothing has been presented indicating the relationship between the body corporate and SBCS”. These are the words of the adjudicator in the interim order and no longer remain relevant. The Applicant has been shown and invited to comment on a document indicating the relationship between the two entities, but has not done so.

Section 297 Act makes it an offence punishable with a fine in the Magistrates Court for a person to state anything to the Commissioner or an adjudicator which the person knows is false or misleading in a material particular. The current maximum fine for this offence is $4,500. Further, an adjudicator may dismiss with costs of up to $2,000 an application which is found to be frivolous, vexatious, misconceived or without substance. (Section 270 Act.)

If the Applicant was aware of the notice from C Ann R about the change of trading name prior to her application for an interim order, then there would be room for the argument that statements in the application were false or misleading to this Office and/or to the adjudicator. I do not propose to pursue this avenue of inquiry.

The need for administration
As indicated in the order of an adjudicator made on 7th June 2007 (0505-2007), to appoint an administrator to a scheme is a step which is not taken lightly. Broadly speaking, an adjudicator would have to be satisfied that there was no committee, no persons who could be on the committee, and the affairs of the scheme were in such disarray that some professional outside entity should be appointed to perform specific tasks for a limited time. It is akin to “receivership” for a company in that a nominated professional is brought in to wind up the company, although in the case of a body corporate, the body corporate is not wound up, but put on its feet. The Administrator can hold a meeting to collect levies, chase debts of the body corporate and act with all the powers of the committee, such as may be given to him or her by the adjudicator’s order. Administration is not a permanent solution, nor a practice-run for a company hoping to secure a position as a body corporate manager, although a body corporate management company might be appointed as an Administrator.

I note that the body corporate refers to both administrators and body corporate managers almost interchangeably. The body corporate manager has specific duties under the legislation and is engaged by the body corporate at a general meeting. An Administrator is an independent entity appointed by an adjudicator with declared powers. I note that the C Ann R’s body corporate manager’s agreement is called an “administration agreement” but this is merely an industry practice name for a body corporate manager’s contract for administrative services. It is not an agreement to act as an Administrator under the terms of section 301 Act.

The Applicant has not demonstrated to me any reason why such a drastic step as Administration is required. There is a committee for this scheme and there is a body corporate manager. Both might make mistakes. Both might not always perform exactly in accordance with the legislation. This Office has no regulatory powers to “police” bodies corporate nor to penalise bodies corporate who make mistakes. An aggrieved person can make an application to this office for resolution of a dispute, as the Applicant knows. But disputes of a technical nature, where the committee has acted bona fide, will not generally result in the voiding of a committee action, nor raise the requirement for an Administrator to be appointed in its stead.

The Applicant has produced no evidence of the interruption of “proper accounting of monies held and disbursed” or the frustration of “financial affairs” because of the change of the banks. There is no detail about the request for “accountability of $1050 paid into the Macquarie Bank account.” The Applicant’s concern about the insurance lapsing refers to a period in 2006 and was also dealt with in matter 0505-2007.

The Applicant’s Reply contained much material which was not raised in the submissions received and was a result of her search of body corporate records on 23rd January 2008. This information was available to her prior to making the application on 7th December 2007 but was not made part of her application. Whilst I find that no documents now produced in respect of emails between body corporate managers and lot owners/committee members have any relevance to this application, I note the Applicant’s deliberate mis-statement of facts in relation to this material. For example, she quoted a former body corporate manager as writing to a lot owner: “One good way to fix Ms Colburn (sic)-” , as an example of the hostility towards her, when the full text reads : “One good way to fix Ms Colburns (sic) complaint (that the AGM motions were decided invalidly)would be to vote for them all again at a valid meeting.....” The first implies a threat or injury to the person of the Applicant; the true text reveals a desire to correct a body corporate procedure at the Applicant’s request. I find nothing the slightest bit ominous in the phrase also quoted as an example of mismanagement or abuse: “... the majority view of Owners will prevail.” That is the normal end of the voting process.

Conclusion
Much of the Applicant’s case is based on the fact that in a scheme of seven owners, where she might always be also a member of the committee, there is a history of excluding the Applicant from committee meetings, formal, informal or by “flying minute.” The body corporate admits that it “ignores” the Applicant as it cannot deal with her contrary personality. In a small scheme, there will also always be the slightly false division between the committee which has certain duties and powers to manage a scheme through committee meetings; and the lot-owners (who will be the same people) who each have a vote and may drive the body corporate through the vehicle of general meetings.

The body corporate and other lot owners have expressed concern over the numerous applications made by the Applicant, and the Applicant will have read in the submissions the requests for help from this Office. The Applicant has lodged six applications since June 2004, not all closed by adjudicator’s order, two being withdrawn.

Whilst ignoring an awkward committee member cannot be condoned by this Office, I find that this application has very little merit. If it were not for the fact there is no evidence that the motions allegedly proposed by the committee for the forthcoming annual general meeting were ever put to the Applicant, I would be entertaining from the body corporate an application for costs against the Applicant in this matter.

Queensland Body Corporate and Community Management Commissioner - Adjudicators Orders

O'Quinn Street Apartments [2008] QBCCMCmr 104 (20 March 2008)