The Cannery [2008] QBCCMCmr 17 (15 January 2008)

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

Dynaball Pty Ltd as trustee for The Cannery Unit Trust, the caretaking service contractor for the scheme

I hereby order that the application for an order

“1. Direct that the resolution of the Body Corporate Committee at its meeting of 15^th February 2007 confirming the draft minutes of the Body Corporate Committee meeting of 6^th October 2006 be declared invalid and that the minutes be amended to reflect the issues stated in 3 and 4 below.

Direct that the draft minutes of the Body Corporate Committee meeting of 15^th February 2007 be amended to reflect the issue in 3 below.
Direct that the minutes of the Body Corporate Committee meetings referred to in 1 and 2 above be amended to
- - delete the inferences that Dynaball accepted/agreed that it had carried on an outside business within the Cannery
- - include a denial from Dynaball that is(sic) had carried on any business at The Cannery other than in accordance with its agreements.
Direct that the reference to the use of the name “The Cannery” under the heading “Unauthorised Use of The Cannery Name and Logo” be deleted.
Direct that minutes of future meetings of the Body Corporate be recorded in compliance with section 36 of the Regulations
Direct the Body Corporate to amend the minutes of the meeting of 15^th February 2007 to reveal the reason or reasons why the Committee could lawfully require that Mr. James Power should not be present for discussion of particular items (including specifying those items) and further direct the Body Corporate not to exclude Mr. Power from further discussions unless they have the power to do so under the Act.
Direct the Body Corporate to produce the written complaint from a local real estate agent to the effect that a representative of Dynaball was hindering the agent’s ability to make real estate sales at The Cannery
Direct that the Body Corporate make records ( as defined in the legislation) available to unit owners at the offices of the Body Corporate Manager.”

is dismissed.

This is an application dated 11^th May 07 and amended on 4^th June 2007 by Dynaball Pty Ltd as trustee for the Cannery Unit Trust, the caretaking service contractor for the scheme and owner of lot 22 (the Applicant) against the body corporate for The Cannery CTS 26311 (the body corporate) for orders as follows-

“1. Direct that the resolution of the Body Corporate Committee at its meeting of 15^th February

2007 confirming the draft minutes of the Body Corporate Committee meeting of 6^th

October 2006 be declared invalid and that the minutes be amended to reflect the issues

“The Cannery” CTS 26311 is a community title scheme governed by the Body Corporate and Community Management Act 1997 (the Act) and the Body Corporate and Community Management (Accommodation Module) Regulation 1997 (Accommodation Module). There are 207 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)).

A department adjudicator has no jurisdiction in a dispute concerning the performance of, or analysis of terms contained in, the caretaking service contractor’s contract(s). Such matters must be settled by specialist adjudication or by the Commercial and Consumer Tribunal (Section 149B Act.) The term “adjudicator” in section 276 includes a “specialist adjudicator” and the jurisdiction of a department adjudicator with regard to contractual matter might be limited for example, to the manner in which the contract was entered into by the body corporate. Further this Office has no jurisdiction to examine the rights of entities to own or use intellectual property per se, such as a name or logo.

I note that the Applicant at point 5 and point 8 of the “Orders sought” seeks an order that the body corporate complies with the legislation in future in a general way. The law exists by act of parliament and may be enforced if the body corporate does not comply with it. I believe that the Applicant means to refer to section 34 Accommodation Module (Minutes and other records of committee) and not section 36 which may refer to the Body Corporate and Community Management (Standard Module) Regulation 1997 and is not applicable to this matter.

The Applicant company is the resident manager for the scheme. The day to day running of the scheme land is under the control of James Power (Mr Power).

The Applicant complains that the minutes of the committee meeting of 15^th February 2007 do not accurately record the events of the meeting, so that the minutes as recorded unjustly reflect badly on the Applicant. At the meeting on 15^th February 2007, the committee approved the minutes of a committee meeting of 6^th October 2007 to which the Applicant had also objected.

The Applicant says that the minutes of the committee meeting of 6^th October 2006 made it clear that the committee objected to the Applicant’s use of “The Cannery” name and logo in its real estate selling business. The committee minutes of 6^th October 2007 state that the Applicant has agreed to –

“It as agreed that the Resident Manager will not use the premises to sell real estate outside the scheme. Dynaball acknowledged that there had been an issue with their Strathpine property but this would be corrected immediately.”

The Applicant says that this wording “contains the innuendo that Dynaball was carrying on a business at The Cannery which was in breach of its agreement with the Body Corporate.” It also says that a reader could gain the impression that it had admitted to doing so.

The Applicant wrote to the body corporate on 1^st April 2007 concerning the “unconfirmed minutes” saying that they did not accurately reflect the discussions held, and that the committee had agreed to provide a draft of the minutes before they were sent to all lot owners which was not done. The Applicant pointed out inter alia as follows –

The Applicant noted in the letter that the many inaccuracies in the minutes taken could be overcome if the meetings were electronically recorded. He also noted that minutes of the 6^th October meeting October were confirmed when he had pointed out several inaccuracies in those minutes.

The body corporate replied to this letter on 6^th April 2007 saying that the minutes were prepared by the body corporate manager and the chairperson, the secretary/treasurer and a committee member and they believed them to be accurate. They confirm that Mr Virgil Power stated that he was attending as a director of Dynaball which it transpired he is not. He is not registered as a director or as an alternate. It denies that there was a resolution to distribute draft minutes to the Applicant, although this may have been discussed. It confirmed that a protocol about real estate agents was still under consideration and had not yet been resolved. The letter also referred to events taking place since the meeting and said that the Applicant’s continuous stance about the logo, the name “The Cannery”, and the criticism of the committee was unsupportable. It stated that many points by the Applicant in its letter of 1^st April 2007 were incorrect and irrelevant, and that the committee could decide how its meetings were to be held and who may attend. It pointed out that the minutes only record the decisions made, and not the discussion prior to the decisions.

Mr Power queries why he was the only member of the committee present who was not given the opportunity to review the draft minutes for accuracy. He also believes that he was wrongfully excluded from the meeting, when the committee advised it wanted to discuss “something in private” and that it would be documented in the minutes, telling him “it was nothing to do with Dynaball.” In fact, the committee discussed and resolved to change its solicitors whilst he was out of the meeting. This was apparently nothing to do with the Applicant company and Mr Power feels that he was wrongly excluded. His only other explanation is that the change of solicitors was in some way related to the body corporate’s relationship or dealings with the Applicant company and that Mr Power was being “lied to” and the minutes are incomplete in not recording that fact.

The minutes of the meeting of 6^th October 2007 refer to a “complaint from a local real Estate agent” to the chairperson regarding access to The Cannery. Mr Power asked for a copy of the complaint at that meeting but was told it was not available at the time. The Applicant then asked to search body corporate records in an effort to find this complaint. On 29^th April 2007, the committee wrote to the Applicant stating that access to records had not been notified to the committee, nor agreed to, and that the body corporate manager had been instructed to refuse the Applicant access to body corporate records.

In accordance with section 243(2)(b) Act, submissions were invited from all lot owners.

Robert Risson co-owner of Unit 128 says that the Applicants issues seem to be “commercial legal issues” as to the first three outcomes sought. He finds that the application has little to do with caretaking of the Cannery, and seems to be more about the status of the Applicant’s real estate business. He supports the committee doing what it can, and says that the body corporate should not get too involved in the Applicant’s business agenda.

Colleen Risson, (Mrs Risson) a committee member, submits personally that here have been some issues about performance of the Applicant’s contract since 2006. There is also an ongoing dispute about the legal use and ownership of the logo and name about which the committee is seeking legal advice from a patents lawyer. She attended both meetings and believes the minutes are accurate. The request to leave the room was made prior to discussion of agenda items 3. “Dynaball Pty Ltd” and 4. “Archers Body Corporate”, both of which were on the agenda. The committee were daunted by the attendance of Virgil Power at the meeting as he had been sending the body corporate “lawyer’s letters” and then attended the committee meeting as a director of the Applicant although he turns out not to be a director. The committee were concerned about a conflict of interest. She believes that it is proper that in discussions about a service provider, the service provider should not be present.

The committee has received written and verbal complaints about gaining access through the electronic entrance, from local real estate agents and from lot owners. The committee has withheld this correspondence from the records in order to keep complainants confidential. The committee conducted an investigation about a complaint about the Applicant and canvassed other local estate agents who made similar complaints. She believes that when legal proceedings have been threatened that a person can be denied access to records. Virgil Power “began a series of legal letters of demand” on 25th January 2007 so “it could be assumed” that the Applicant is threatening legal proceedings. The committee therefore withheld the complaints from the Applicant. She says that the application is an attempt by the Applicant to hinder the proper supervision of the service provider’s contract and to gain a commercial advantage at the expense of lot owners.

Hemming and Hart lawyers made a submission on behalf of the body corporate on 24^th October 2007. The submission concerns itself with the Applicant’s performance under the caretaking agreement and the relationship between the body corporate committee and the Applicant . Relevantly, it notes that the committee minutes of the meeting of 15^th February 2007 were adopted as being a true and correct record at a committee meeting on 12th September 2007, since the lodging of this application.

It points out that section 30A Accommodation Module enables a committee to discuss a caretaker and matters relating to caretaker’s contract in the in the absence of the caretaker, and says it is inappropriate that “legal rights and remedies and advice obtained in relation to those matters should be fully recorded in the Minutes and available for perusal by [the caretaker]” because to do that would be to waive legal professional privilege. The body corporate may record minutes as it sees fit if in accordance with the legislation.

The body corporate says that the Applicant has brought this application in order to put pressure on the committee to resign, and that it should be refused as it lacks substance, and is frivolous, and vexatious. Since the lodging of the application, the body corporate has sent the Applicant a remedial action notice in respect of the terms of its contract, and this application is a reflection of the poor relationship between the parties and not a genuine grievance. As an example of the acrimonious background, the submission includes a statutory declaration by Mrs Risson saying that she was threatened by directors of the Applicant company that if she did not vote against a flying minute in January 2007 she would be personally included in a lawsuit about ‘The Cannery” name and logo; and an email to the chairperson from directors of the Applicant company requesting that the chairperson should resign or her actions would be brought to the attention of the “appropriate authorities.”

The submission also provides a copy of an email dated 19^th September 2006 from real estate agent Jackie Bayard referring to Mr Power’s behaviour in May/June 2006, which is tendered as the letter of complaint from a real estate agent, referred to at the meeting of 6^th October 2006.

The Applicant exercised its right of Reply on 4th November 2007. It refers to on-going bad feeling between the committee and the Applicant despite an attempt to address respective issues. It says that the body corporate submission completely ignores the point in issue which is whether or not representatives of the Applicant stated at the meeting of 15^th February 2007 that it had carried on “an outside business” or whether it had denied it. Similarly, the issue was whether or not the Applicant agreed that it could or could not use the name and logo, and not the fact that the name and logo were used. In addition, the use of the name was never queried, only the logo. “The committee response focuses on whether or not Dynaball should have title to that name. That is not the issue.”

The Applicant says that owners are entitled to a full copy of the minutes and also hand-written notes if they form part of the meeting. He is aware that the application makes “motherhood statements” in its outcomes sought, but asks that this Office directs that what was actually said is distributed, and that the committee can not hide behind “ legal professional privilege” to stop full minutes from being recorded. Whilst full details need not be recorded, owners are entitled to know for instance, that legal advice about the Applicant’s performance has been sought, if that is the case.

The Applicant acknowledges that it now has a copy of the written complaint which it was seeking. The Applicant notes that the fact that the committee decided to interview other real estate agents is not recorded as a resolution of the committee in any set of minutes. Dynaball was advised only of one single complaint, and it is wrong that it was not made aware that there were more complaints or that the committee was “interviewing real estate agents” without giving the Applicant an opportunity to respond.

Further, the Applicant denies that it “arrived unannounced” to inspect records at the office of the body corporate manager. The inspection was agreed at a mutually convenient time. He fails to see how a letter of complaint can be a document protected by legal professional privilege.

The Applicant has provided material about what occurred at, and subsequent to, a conciliation conducted by this Office. Such material is inadmissible as the proceedings of a conciliation are entirely confidential. I have therefore not considered any matter referring to the conciliation process, the outcome of the conciliation or subsequent correspondence about the conciliation. I would note merely that conciliation was not in this instance successful. I note that the parties continue to be in dispute about the performance of the Applicant’s contract.

The body corporate made a response to the Applicant’s Reply on 18^th December 2007. I have not considered any documents in this submission, which was uninvited and filed after the close of the period for making submissions. The adjudication process for a final order allows only for the application, submission and reply, unless further information is sought by the adjudicator.

This is a dispute about the recording of minutes of committee meetings. I understand from the submissions that there are several issues between the Applicant and the body corporate and that even in the weeks before Christmas, there were further complaints and counter arguments about each other’s behaviour and duties. However, this application deals only with the application as made by the Applicant in May 2007 and subsequently amended in June 2007. Many of the issues raised are not within the jurisdiction of a department adjudicator, for example, defamation, use of intellectual property, the terms and performance of a contract, and the regulation of real estate agents.

It appears to me that the application and the submissions are heavily coloured by these other issues since both parties make frequent reference to the veracity of statements made or alleged to have been made at committee meetings, particularly at two committee meetings held respectively on 6^th October 2006 and 15^th February 2007.

As the Applicant points out in its Reply, the truth of what was said is not the issue, so much as what was actually said. Mr Power’s argument is that the minutes were wrongly recorded and that untruths appear in the minutes because if those untruths were in fact stated at the meetings, being present, he would have been able to correct them; alternatively, where he had in fact corrected a factual mistake or misunderstanding, that has not been shown in the minutes. The result is that he is left shown in a bad light with lot owners who read the minutes, and he feels that this is unjustified.

Outcome sought 1 - resolution to confirm minutes of the meeting of 6^th October 2006 to be held invalid and those minutes amended

The Applicant seeks to invalidate the resolution taken at the committee meeting of 15^th February 2007 to confirm the minutes of the meeting of 6^th October 2006, and asks that the minutes be amended in specific particulars. The Applicant provides no evidence that following the meeting of 6^th October 2006, a meeting at which he is recorded as being present, that he challenged the minutes. A document provided in the body corporate’s submissions (Document at appendix 9) shows that on 15^th February 2007, the day of the second committee meeting, the Applicant’s lawyers wrote by email to the body corporate care of the secretary, disputing the minutes of the meeting of 6^th October 2006 and requesting that they be amended. There is no reference in this letter to prior correspondence about this matter.

The notice and agenda for the meeting of 15^th February 2007 is dated 7^th February 2007 and its receipt is not disputed by the Applicant. The first item on the agenda was the confirmation of the minutes of the meeting of 6^th October 2006.

The meeting on 15^th February 2007 started at 5.45 pm. The email received from the Applicant’s solicitors on that day is noted and the contents discussed with the Applicant and the writer of the letter, although there is some dispute about the status of Mr Virgil Power at that meeting. The committee resolved to adopt the minutes of 6^th October 2006, and there was no motion to amend them put to the committee for resolution.

The Applicant as a member of the committee had the power to put a motion to the meeting. The agenda at a committee meeting is not fixed (Section 28(2) Accommodation Module). This would have been the only course of action by which the minutes of the meeting of 6^th October 2006 could have been amended. It appears that the Applicant did not do this. Further, even if it had done so, it has not demonstrated that it would have persuaded voting members to vote in favour of the amendments which were in writing before the committee. The committee clearly did not agree with amendments proposed by the Applicant, as it has stated in this application.

The challenge also came more than four months after the event, which considerably weakens any thrust that the Applicant’s arguments might have had. The motion to confirm the unamended minutes of 6^th October 2006 must therefore stand as a resolution of the committee.

Outcomes sought - 2, 3 and 4 – Amendment of the minutes of the meeting of 15^th February 2007

The Applicant seeks to amend the minutes of the meeting of 15^th February 2007 which he attended. He states that material particulars were wrongly recorded, and statements made not recorded at all. He challenged the minutes by letter dated 1^st April 2007 written to the body corporate, and specifically noted that at the meeting, it had been agreed that draft minutes would be circulated to the committee for comment prior to being sent to lot owners.

It is relevant that between 6^th October 2006 and 15^th February 2007 relations between the body corporate and the Applicant had deteriorated. The Applicant lodged an application to the Trademark Office on 8^th October 2006 as owner of “The Cannery Teneriffe” logo and on 25^th January 2007 the Applicant’s lawyers wrote to the following members of the committee – Carmel Serratore, chairperson, Patrick Hay, treasurer, Colleen Risson, ordinary member and Tony Turner, ordinary member, disputing that a motion about the logo application, to be voted on outside a committee meeting ( a flying minute) was properly convened, requiring that the motion not be tabled, and threatening to “institute proceedings for orders... ” if the motion proceeded. The committee had also written a letter dated 9^th February 2007 to lot owners, a letter which the Applicant claimed on 15^th February 2007 though his lawyers was unauthorised by the committee and defamatory of the Applicant. The circular referred to a written complaint from a local real-estate agent. A copy of this letter is not provided in the application nor in submissions, although the Applicant provides an extract from it.

The Applicant wants specific references in the minutes to be changed and has suggested the wording to be used. He was not given the opportunity to correct draft minutes whereas the body corporate acknowledges that the body corporate manager, the chairperson, secretary/treasurer and a committee member checked them for accuracy prior to them being sent out to lot owners. The body corporate says there was no resolution to distribute draft minutes to the Applicant, although “there was discussion about this possibility.” ( see letter 6^th April 2007 from the treasurer to the Applicant.)

The meeting of 15^th February was attended by only the chairperson, secretary/treasurer and one ordinary member apart from the resident manager and the body corporate manager. The Applicant was therefore the only member of the committee who was not given the opportunity to review the draft minutes. Whilst there is no duty on the committee to circulate draft minutes, it appears inequitable that all other members of the committee attending the meeting were able to have sight of a draft, especially as this had been raised at the meeting. There was equally no resolution that the draft minutes be circulated to all members except the resident manager, so the argument of the committee is not supportable. The statement that the resident manager was excluded because “unit owners... have priority over a non-voting Services Contractor” is inexplicable nonsense since the body corporate manager also has no vote at a meeting. Further, it is unjust and inequitable. There is no weight given to the status of any member of the committee in the legislation, or the preferred status of a committee member over a lot-owner or vice versa. The committee is divided into elected voting members and non-elected non-voting members. All their views are equal, the power to vote enabling the elected members only to make decisions.

The legislation allows bodies corporate freedom to manage their own affairs in any way that is just and equitable. The legislation does not dictate, for example, which member of the committee is to liaise with the body corporate manager, or how minutes are to be prepared, or by whom. Section 94(2) Act requires that the body corporate acts reasonably in anything it does, and this has been held by the District Court to apply principally to the performance of functions of the committee.^[1] The Code of conduct for committee voting members also requires the committee to act honestly and fairly. (Clause 2 Schedule 1 A Act).

It was ill-advised of the committee, at the least, not to allow the resident manager to have an opportunity to view the draft minutes prior to circulating them, if it was the case that all other committee members attending had that opportunity. Wording suitable to the recollection of both parties might have been achieved and this particular part of the dispute avoided.

The requirement in the legislation to confirm the minutes of the previous meeting at the next meeting means that there is room to vary or correct the minutes, even after they have been circulated. It is not an opportunity to review a decision made at the previous meeting, but intended to correct factual or typographical errors.

Section 34 (5) Accommodation Module says that “full and accurate” minutes must be taken.

Full and accurate minutes, of a meeting, means minutes including each of the following—

(b) the names of persons present and details of the capacity in which they attended the meeting;

This is a minimum requirement, and more detailed minutes may be taken. A minute must record a decision made by the Committee. General discussion and who said what need not be recorded at all. The minutes are not a transcript of what was said. The committee is free to discuss what it likes. However, where discussion is recorded it should be recorded fairly and accurately, which would suffice the requirement that the body corporate acts reasonably.

However, it is in the recording of “discussions” that the Applicant has an uphill struggle to convince me that his recollection is preferable to the recollection of four other members of the committee. He asked on 1^st April 2007 for the minutes to be amended, and there is no support for this from the members who would vote on that amendment if it was put as a motion. Whilst he says that it is unbelievable that had a certain thing been said at a meeting, he would not have challenged it, that alone is not evidence that the recollection of four other people is in error.

Whilst the truth is not in issue, in fact, I find that the minutes themselves do not state that the Applicant has agreed or not agreed that he carried on “an outside business.” The minutes say that the “Resident Manager will not use the premises to sell real estate outside the scheme..” and that “ Dynaball acknowledged there had been an issue with their Strathpine Property but this would be corrected immediately...” The Applicant points out that there is no accusation but he is of the view that readers could “imply by innuendo” that “Dynaball... was in breach of its agreement with the Body Corporate,” and “gain the impression that Dynaball admitted it had done so.”

The Applicant does not refer me to any clause(s) in its contract with the body corporate which a lot-owner might “imply by innuendo” have been breached in the light of this record. The contract states that the Applicant may offer ancillary services to lot owners which services include “an agency for the sale of lots in the Scheme.” (Clause 1.) Clause 5.5 “Usage”, says that the Applicant must use the manager’s unit for residential purposes and for the conduct of the business authorised by the agreement. It is not argued that Clause 5 is being interpreted as allowing the Applicant such use, exclusive to any other uses, and from the response to the seeking of submissions, I find it unlikely that any lot-owners have applied their minds to this clause in the light of the minutes. Whilst the denial which the Applicant says he made at the meeting is not recorded, there is nothing in the record made which refers to, or implies, a breach of contract. I am not referred to any other documents such as the scheme by-laws or the Applicant’s own real estate agent licence which may or may not have some bearing on this point.

Under the sub-heading “Use of Name and Logo”, the minute records: “In the interim Dynaball Pty Ltd agreed to refrain from conducting an outside business within the scheme.” Again, there is nothing in this statement which could lead a lot-owner to the view that the Applicant was in breach of its caretaking agreement. There is nothing which I can see in the contract, nor is any part of the contract referred to me by the Applicant (or the body corporate), about the use of the name or the logo. What is implied is that there is a dispute between the Applicant and the body corporate about the use which may be made of, or the ownership of, the name and logo which is stated in the minutes to be an issue subject to further legal advice. The Applicant says the issue is only about the logo and not the name, but the committee does not agree that there is no dispute about the name, which confirms to a reader of the minutes simply that the matter is in dispute.

Neither matter appears to be a ‘hot issue’ for the 202 lot-owners. Only two out of 202 lot-owners made a submission in this application, one who is related to a committee member and no doubt closely involved in the dispute, and one who had no arguments attached to her submission but offered general support to the Applicant.

The Applicant has not provided sufficient evidence that the words recorded in the minutes of the committee meeting of 15^th February 2007 do not represent the discussion of the members present and the decisions made by the committee at that meeting. It is regrettable, however, that the Applicant was not given the opportunity to review the draft minutes and make his observations on them, when this was a benefit accorded to others who attended the meeting.. The committee could have voted on whether the amendments should be made, and the Applicant would have had the chance of being heard.

Outcome sought 5 – Future minutes to be taken in compliance with legislation

There is no point in making an order that a person complies with the legislation. The legislation must be observed by all.

Outcome sought 6a) - Amend minutes to show the reason why the Committee could lawfully require that Mr. James Power not be present for discussion of particular items, specifying those items.

The agenda for the committee meeting for the two items for which Mr Power was asked to leave the meeting were entitled “3. Dynaball Pty Ltd” and “4. Archers Body Corporate Management.”

Mr Power accepted that the committee wanted to discuss “something private” and temporarily left the meeting. Why Mr Power accepted the “something private” explanation without more, or that it “was nothing to do with Dynaball” when the agenda item was entitled “ Dynaball Pty Ltd” is not explained by him, but it seems likely that the Applicant was aware of the provisions of section 30 Accommodation Module-

(1) A person who is a non-voting member of the committee must not be present for an item of business about a following matter considered at a meeting of the committee if the committee decides the person must not be present for the item—

(b) the person’s engagement as body corporate manager or service contractor;

(c) if the person is a caretaking service contractor who is a letting agent for the scheme—the person’s authorisation as a letting agent.

(a) a discussion of, or vote taken by, the committee about whether the person may be present for an item of business mentioned in subsection (1); or

(3) This section does not prevent the committee lawfully excluding the person from the meeting for an item of business not mentioned in subsection (1).

“A dispute” generally includes a complaint (Schedule 6, Act). It was clear at that time that the Applicant had some disputes with the body corporate and it is conceivable that the committee, thought Mr Power should not be present for any discussion. The committee may also have wanted to discuss the Applicant’s contract as a service contractor and/or as a letting agent. There is nothing wrong in this. However, the Applicant says that even though he was excluded, the body corporate has a right to know if the committee discussed certain issues about the Applicant’s dispute (eg. about the logo) or the Applicant’s contract(s) and that this should have been minuted. The body corporate says that any such record could breach legal professional privilege.

What the minutes actually record whilst the Applicant was absent was that the committee resolved to change its body corporate solicitor, and that the committee had some discussion about the personnel at Archers Body Corporate. The Applicant says that this was nothing to do with any dispute between the body corporate and the Applicant and that Mr Power was therefore unjustly excluded, or else the minutes are fictitious and that other matters which might affect the Applicant were discussed. It provides absolutely no evidence of this. In fact, the application is in the nature of a fishing expedition to ask what the committee did actually discuss, since what is recorded does not seem to relate to the item described on the agenda.

In my view, there would be no point in the committee writing one thing in the minutes when it in fact had decided another matter. If the other matter is not a matter of record, the body corporate cannot act on it or rely on it, and lot owners do not know about it. It may be that the remaining members of the committee did discuss issues about the Applicant company, as it is entitled to do. However, only the words of a question decided need to be recorded (Section 34(5)(d) Accommodation Module), and not any prior discussion which terminated in the decision to change solicitors.

Further, section 30A(3) Accommodation Module allows the committee lawfully to exclude a non-voting member (body corporate manager or a caretaking service contractor) for any other item of business. The reason for this amendment to the legislation made in 2003 is given in the Explanatory Notes as follows -

“The non-voting member has a right to attend committee meetings, but is not counted in the quorum determination, cannot vote, and cannot hold a proxy. The basis of the non-voting member’s right to attend the meeting is, for example where the person is the caretaker, that the person will be expected to and should have a thorough knowledge of the maintenance requirements of the scheme, and of the events occurring at the scheme. For this reason, it is advantageous for the body corporate if the caretaker were involved in discussions concerning the scheme at committee meetings.

However, there are particular issues and circumstances when the committee should have the power to decide that the person should not be present at the committee discussions or the vote. Section 30A(1) gives the committee this power. Further, the person is automatically excluded while the committee decides whether or not to exercise the power.

Notwithstanding these provisions, a non-voting member should, as a matter of course, advise the committee where there is an issue in which the person has an interest, and leave the meeting before any discussion takes place and a vote is taken.”^[2]

Outcome-sought 6b) - direct the Body Corporate not to exclude Mr. Power from further discussions unless they have the power to do so under the Act.

The Applicant’s second head of this outcome sought falls into the category of quoting the legislation and is therefore a pointless exercise.

The Applicant has now succeeded in its request for the body corporate to produce this document, since it has been produced in the course of this application.

All correspondence to, and from, the body corporate is a body corporate record and must be maintained on the records of the body corporate for any “interested person” to view (section 148(1)(h) Accommodation Module), unless that correspondence contains material which the body corporate reasonably believes to be defamatory, in which case access to that part of the record may be denied (section 149(3) Accommodation Module) or if a “legal proceeding between the body corporate and the person ( attempting to gain access to the record) has started or is threatened and the records are privileged from disclosure.” (Section 149(2) Accommodation Module).

Whilst legal advice should be taken on the matter of what is and what is not a privileged document, it is not necessarily true that because a legal proceeding is threatened or commenced a document suddenly becomes “privileged.” Section 149(2) Accommodation Module requires a two-pronged test, firstly that a proceeding is threatened or started, and secondly, that the document requested is a document privileged from disclosure in the ordinary way.

It appears that the body corporate did not place this complaint on the records of the body corporate because it was respecting the confidence of the writer. Such a guarantee of confidence should not be given where the writer writes to the body corporate. Mrs Risson says that “the committee has received more than one complaint from real estate agents and lot owners... some written and some verbal.” The body corporate has a duty to place any written correspondence on record. The person complained about has a right to know about the complaint and act upon it as he or she sees fit.

In the instance evidenced, a real estate agent, Jackie Bayard, sent an email to the chairperson in September 2006. Such a letter could be construed to be a personal letter to the chairperson and not a letter to the body corporate, and therefore not a “body corporate record.” However, Mrs Risson says that “in order to determine the validity of the complaints the committee conducted an investigation. A number of local real estate agents were interviewed ....”. She does not say who conducted the interviews, or how that decision was made. Jackie Bayard writes apparently out of the blue in September 2006 about incidents in May/June 2006. If this was a response to a body corporate “interview”, it would make that letter a record of the body corporate.

There are no minutes provided that the committee made a decision to “interview” local real estate agents. If that was not a resolution of the committee, does that make the interviews, and the response to them, not an action of the body corporate, and therefore not subject to be held on the body corporate records? I am of the view that it would be inequitable if a body corporate deciding without proper process to obtain documents could then say those documents were not body corporate records, and therefore not available to all interested persons.

Mrs Risson says that “these issues”, that is the results of the interviews, were taken up with the Applicant at the committee meetings of 6^th October 2006 and 15^th February 2007. In fact, the matter received scant attention in the minutes of the meeting of 15^th February 2007, and in the minutes of 6^th October 2006, there was no decision about a specific complaint made, although the committee agreed that estate agents acting legitimately for lot owners should have unfettered access into the scheme.

However, I make no order in this regard, since the outcome sought by the Applicant has been achieved, but the body corporate should note that any correspondence or documents obtained on behalf of the body corporate should be placed on the body corporate records.

Again, the Applicant asks for what he terms a “motherhood statement” which is something of a pointless exercise.

The committee’s view as written to the Applicant on 29th April 2007, complaining that the Applicant had not notified the committee of his desire to see records is completely erroneous. No-one need request permission from the committee to see body corporate records. Section 149 Accommodation Module states that the body corporate (that is, the holder of the records on behalf of the body corporate) must allow committee members reasonable access to all body corporate records without payment of fee. Section 205 Act requires that all “interested persons” which includes for example, agents, representatives and prospective purchasers and their solicitors, must be given access to body corporate records and section 150 Accommodation Module provides that for such interested persons, a small fee is payable.

The Act requires that records are made available and as such, they are not subject to the privacy legislation. To instruct the body corporate manager to refuse access to records to any committee member or “interested person” is contrary to the legislation and carries a penalty in the Magistrates Court of 20 penalty points. (Section 205 Act). That is, it is a quasi-criminal offence punishable with a maximum fine of $1500 to prevent a committee member or interested person from having access to the body corporate records. A body corporate record may only be withheld in the instances where “a legal proceeding between the body corporate and the person has started or is threatened and the records are privileged from disclosure.” (Section 149(2) Accommodation Module) or where certain sections of a document are believed to be defamatory. Both these exceptions would need to be aired within a court of competent jurisdiction if necessary, and proved by the body corporate as the entity withholding the record.

Since the threat of legal proceedings by the Applicant did not commence until 25^th January 2007 according to Mrs Risson, the body corporate may like to take legal advice about withholding any documents written by third parties before that time. Correspondence between a solicitor and a client are likely to be privileged documents. Complaints by members of the public about the behaviour of a caretaking service contractor are not likely to be. These letters appear to have been kept out of the records for reasons not connected with a claimed right of privilege, but on the guarantee of confidentiality by the committee to the writers.

In conclusion, none of the Applicant’s outcomes sought can be made as an order. However, it is clear, no doubt because of the current background of disharmony between the body corporate and the Applicant, that the body corporate is being less than transparent (to the Applicant) in its management of the scheme.

It is also recommended that the recording of the minutes is less wordy and more formulaic. Since minutes of meetings do not need to record any discussion at all, it would be preferable for the committee merely to list the motions tabled and the decisions made. Members may ask that an objection or a contrary view be minuted, but lengthy explanations or a précis of who said what should be avoided. To state “there was a discussion about....” is not helpful to any reader. Further, if committee members have input into the draft minutes after the meeting and prior to them being sent to lot-owners, all committee members should have the same opportunity to review the draft.

^[1] Dindas and Anor – v Body Corporate for One Park Road [2006] QDC 302 para 35
^[2] Explanatory Notes for SL 2003 No. 263 Body Corporate and Community Management Legislation Amendment Regulation (No. 1) 2003No. 263, 2003

Number of Scheme:	26311
Name of Scheme:	The Cannery
Address of Scheme:	139 Commercial Road TENERIFFE QLD 4005

Queensland Body Corporate and Community Management Commissioner - Adjudicators Orders

The Cannery [2008] QBCCMCmr 17 (15 January 2008)