Crown Towers [2008] QBCCMCmr 409 (4 November 2008)

Last Updated: 8 December 2008

REFERENCE: 0686-2008

ORDER OF AN ADJUDICATOR

MADE UNDER PART 9 OF CHAPTER 6

BODY CORPORATE AND COMMUNITY MANAGEMENT ACT 1997

Number of Scheme:	24386
Name of Scheme:	Crown Towers
Address of Scheme:	5 - 19 Palm Avenue SURFERS PARADISE QLD 4217

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

Mr. James Kolovos, a co-owner of lot 130.

I hereby declare that owing to a technical defect in the power of attorney which purported to appoint Mr. Anthony McQuillan as attorney for the owner of lot 212, the appointment of Mr. Anthony McQuillan to the committee as Chairman and Secretary was invalid. I further declare that having regard to subsection 100(4) of the Body Corporate and Community Management Act 1997, decisions made by persons including Mr. Anthony McQuillan, who believed that they were properly appointed to the body corporate committee, are taken to be a decision of the committee notwithstanding the technical defect in the election of Mr. Anthony McQuillan. I hereby order that Mr. Anthony McQuillan is entitled to continue in the role of Chairman and Secretary until such time as an election is held at the next Annual General Meeting for the scheme, which is required to be held by 30 December 2008.

STATEMENT OF ADJUDICATOR’S REASONS FOR DECISION - REF 0686-2008

“Crown Towers” CTS 24386

The Scheme

Crown Towers is a subdivision of 298 lots recorded under a building format plan of subdivision. The regulation module applying to the scheme is the Body Corporate and Community Management (Accommodation Module) Regulation.

The Application

This application is brought by Mr. James Kolovos, a co-owner of lot 130, seeking the following orders:

• The appointment of Anthony McQuillan to the committee as Chairman and Secretary should be declared invalid;
• A General Meeting should immediately be held to fill the position of Chairman and Secretary.
  

Background

The applicant sates that on 24 July 2008 he sent an email to Anthony McQuillan requesting clarification of the authority under which he had been nominated and subsequently appointed to the committee. On 26 July 2008 Mr. McQuillan replied in the following terms: “ I am eligible under section 11(1)(b)(i)(B) of the Accommodation Module acting as a power of attorney. You will find the owner for whom I act in that capacity under the name “Wigan”. My power of attorney was properly given to the body corporate manager in advance of the closing date for nominations last September”.

The applicant further states:

• Houda Wigan is the registered owner of lot 212 according to records held by the Department of Natural Resources and Water;
• Section 11(1)(b)(i)(B) requires that the person nominated for membership of the committee be a person acting under the authority of a power of attorney given by the member of the body corporate;
• As Mr. McQuillan purported act under a power of attorney given by the owner of lot 212, Mr. McQuillan should have been appointed under a power of attorney given by Houda Wigan who is the registered proprietor of lot 212;
• However, the power of attorney initially produced by Mr. McQuillan was not signed by Houda Wigan but was signed by Rita Wigan, her daughter;
• After this was brought to the attention of Mr. McQuillan, another power of attorney was produced showing both Rita and Houda Wigan as principals and signed by Rita and Houda.
  

Submissions

Submissions were sought from the body corporate and also the body corporate manager pursuant to section 243 of the Act. In response, 12 submissions were received.

Mr. McQuillan made the following submissions:

• In September 2007 he was asked to represent the Wigan Family trust at Crown Towers CTS 24386 by Ms Rita Wigan, and to nominate for the body corporate committee;
• He accepted a completed power of attorney signed by a Rita Wigan, which he gave to the body corporate manager;
• The body corporate manager advised that the power of attorney should have been signed by Houda Wigan who is Rita Wigan’s mother. This was completed and a copy was provided to the body corporate manager;
• He initially nominated for the positions of Chairman, Secretary and ordinary committee member but withdrew his nomination for the position of Chairman before the AGM notice was issued;
• On 19 December 2008 he was elected to the position of secretary with 80 votes as compared to a combined total of around 40 votes for the three other candidates;
• Mr Bob Wills who had been appointed chairman resigned in June and Mr McQuillan was appointed Chairman;
• It would appear that the applicant has only obtained a copy of the original power of attorney which was rejected and replaced by the power of attorney form which was later signed by Ms. Houda Wigan.
  

Submissions supporting the application contained the following points:

• The previous body corporate manager (Midwood) did not return records and materials pertaining to the AGM held on 19 December 2007, to the new body corporate manager until 21 May 2008;
• There are two power of attorney documents purporting to give a power of attorney to Mr McQuillan and each document is dated 19 September 2007 and witnessed by the same Justice of the Peace;
• One document is signed by Rita Wigan and the other document is signed by both Rita and Houda Wigan;
• Although the date appearing on the second document is 19/9/07, the document was not received by the body corporate manager until well over a month past the deadline for nominations, 30/09/07;
• The power of attorney document was submitted on 9 November 2007 which is confirmed by the fax stamp on the top of the page along with the body corporate manager’s note recording receipt of the document;
• Houda Wigan may not have decision-making capacity and was therefore unable to grant a power of attorney;
• Members of the body corporate were under the impression that the committee had satisfied itself before the committee meeting that Mr McQuillan had been given a valid power of attorney whereas in fact, no member of the committee had seen the document;
  

One lot owner made the following submissions:

• The attempt to remove Mr McQuillan is a personal vendetta against him by a disgruntled member of the committee and a person who failed to be elected at the last AGM;
• The application does not have committee support;
• Mr McQuillan is an effective member of the committee and his removal would be unjust and against the best interests of the owners.
  

In reply the applicant made the following submissions:

• If Houda signed the power of attorney document after it was already signed by Rita and witnessed by the JP, the power of attorney is invalid as it would not have been independently witnessed as required by section 112 of the Power of Attorney Act (Qld);
• Alternatively, if it is a new instrument executed by Rita and Houda at the same time, the power of attorney is deficient and should be declared invalid and void because:-
  • (a) section 11 of the Power of Attorney Act (Qld) requires the power of attorney to be made in the approved form which is a singular instrument to be executed by a sole principal;
  • (b) sections 8 & 13 of the Power of Attorney Act (Qld) provide for the principal to appoint one or more attorneys but by contrast there is no provision for one or more principals to appoint an attorney;
  • (c) section 14 of the Power of Attorney Act (Qld) establishes the requirements for proof and certification of a general Power of Attorney. These requirements have not been met;
    
• the cut-off date for nominations was 30 September 2007 (i.e. The end of the financial year) but the power of attorney was only received by the body corporate on November 2007 and therefore the nomination does not comply with 14(5) of the Accommodation Module which was then applicable, and his appointment should be declared invalid;
• There is evidence to suggest that Mrs. Houda Wigan has impaired capacity and therefore the power of attorney is automatically revoked pursuant to section 18 of the Power of Attorney Act (Qld)
  

Jurisdiction

This is a matter which falls within the dispute resolution provisions of the Act (see sections 227, 228, 276 and Schedule 5).

Section 276(1) of the Act provides that an adjudicator may make an order that is just and equitable in the circumstances (including a declaratory order) to resolve a dispute, in the context of a community titles scheme, about-

(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

(c) a claimed or anticipated contractual matter about-

(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)).

Determination

The Body Corporate and Community Management Act 1997 requires an adjudicator to make an order that is "just and equitable" to resolve a dispute and in this instance I have been asked to make the following final orders:

• The appointment of Anthony McQuillan to the committee as Chairman and Secretary should be declared invalid;
• A General Meeting should immediately be held to fill the position of Chairman and Secretary.
  

It has been argued that the appointment of Anthony McQuillan to the committee as Chairman and Secretary should be declared invalid for the following reasons:

• the cut-off date for nominations was 30 September 2007 (i.e. The end of the financial year) but the power of attorney was only received by the body corporate on November 2007 and therefore the nomination does not comply with section 14(5) of the Accommodation Module which was then applicable, and his appointment should be declared invalid;
• The power of attorney document is defective;
• There is evidence to suggest that Mrs. Houda Wigan has impaired capacity and therefore the power of attorney is automatically revoked pursuant to section 18 of the Power of Attorney Act (Qld)
  

I have examined two copies of power of attorney documents dated 19/9/07 and having to regard to certain subtle differences in those documents believe that two powers of attorney were executed on that day although, for reasons which will be outlined below, I believe the power of attorney is defective.

However I will deal firstly with the argument that Mr. McQuillan has failed to comply with section Section 14(5) of the Accommodation Module which provides as follows:

14 Nomination procedures for election of committee other than at first annual general meeting
(1) This section states how individuals are nominated for election (other than an election held at the first annual general meeting for the scheme) as chairperson, secretary, treasurer or ordinary
member of the committee.
(2) The secretary must serve a notice on each lot owner shown on the body corporate’s roll, inviting each lot owner—
(a) if the lot owner is an individual—to nominate—
(i) the lot owner; or
(ii) another individual who is a lot owner or who may be nominated by the lot owner in accordance with section 11(1)(b)(i); or
(b) if the lot owner is not an individual—to nominate an individual who is a lot owner or who may be nominated by the lot owner in accordance with section 11(1)(b)(ii)or (iii).
(3) The notice must state that—
(a) the lot owner is not eligible to be a member of the committee if the lot owner owes a body corporate debt when the members of the committee are chosen; and
(b) the lot owner may not nominate a person for membership of the committee if the lot owner owes a body corporate debt when the nomination is received by the secretary.
(4) The notice must be given at least 3 weeks before, but not earlier than 6 weeks before, the end of the body corporate’s financial year.
(5) Nominations must comply with section 14A and must be given to the secretary by the end of the body corporate’s financial year.
(6) As soon as practicable after receiving a nomination under this section, the secretary must forward written notice to the candidate acknowledging that the nomination has been
received.

It is evident that the nomination form was completed, at least substantially, in compliance with section 14A of the Accommodation Module, was executed on 19 September 2007 and the evidence suggests that this document was submitted prior to the end of the financial year (30 September 2007).

It is not so clear as to whether the Power of Attorney document was provided to the Secretary before the end of the financial year, but Mr. McQuillan states that the Power of Attorney was provided to the secretary prior to the date of the meeting, in accordance with section 47 of the Accommodation Module Regulation which provides as follows:

47 Meaning of voter for general meeting
(1) A voter for a general meeting of the body corporate is an individual—
(a) whose name is entered on the body corporate’s roll as
(i) the owner of a lot; or
(ii) the representative of the owner of a lot; or
(b) who is the nominee of a corporation the name of which is entered on the body corporate’s roll as the representative of the owner of a lot; or
(c) who is a corporate owner nominee; or
(d) who is a subsidiary scheme representative.
(2) For subsection (1)(a)(ii) and (b), a person is the representative of the owner of a lot if—
(a) the person is a guardian, trustee, receiver or other representative of the owner of the lot, and is authorised to act on the owner’s behalf; or
(b) the person—
(i) is acting under the authority of a power of attorney given to the person by the owner of the lot; and
(ii) is not the original owner, except if the power of attorney is given under section 211 or 21921 of the Act; and
(iii) is not the body corporate manager, a service contractor or a letting agent.

(3) However, a person may be treated as the owner’s representative only if the person—
(a) gives the secretary a copy of the instrument under which the person derives the representative capacity or otherwise satisfies the secretary of the person’s representative capacity; and
(b) advises the secretary of the person’s residential or business address, and address for service (if it is different from the residential or business address).
(4) The owner of a lot may revoke the authorisation of a person acting as the lot owner’s representative by written notice of revocation given to the secretary.
(5) For subsection (1)(b) or (c), a person is taken to be the nominee of a corporation or corporate owner (the nominating entity) only if the nominating entity gives the secretary written notice of nomination, stating—
(a) the name of the nominee; or
(b) the names of 2 nominees, 1 of whom is to act in the absence of the other.
(6) The notice of nomination must—
(a) be given—
(i) under the seal of the nominating entity or in another way permitted under the Corporations Act,
(ii) by a person acting under the authority of a power of attorney from the nominating entity, a copy of which power of attorney is also given to the secretary; and
(b) advise the residential or business address, and address for service (if it is different from the residential or business address), of each nominee.
(7) A nominating entity may change a nomination mentioned in subsection (5) by giving the secretary written notice of a new nomination, in a way mentioned in subsection (6), stating the
name and address of the new nominee or the new alternative nominees.

I would point out that although Mrs. Houda Wigan may be elderly and frail, it does not necessarily follow that she does not have decision making capacity. In the absence of expert medical evidence, or an order from the Guardianship and Administration Tribunal, it would not be appropriate for me to find that Houda Wigan has impaired capacity for the purposes of section 18 of the Power of Attorney Act (Qld).

However, I believe that the power of attorney document is technically defective. Initially, a Power of Attorney was signed by Ms. Rita Wigan but this document was rejected as the registered owner of lot 212 is Mrs. Houda Wigan. A second Power of Attorney document was prepared but referred to both Houda and Rita Wigan as principals. In my opinion the second power of attorney document was also defective as it did not comply with section 11 of the Power of Attorney Act which requires the power of attorney to be made in the approved form i.e. as a singular instrument executed by a sole principal. In my opinion there is no provision under the Power of Attorney Act for more than one principal to appoint an attorney.

Accordingly, I believe that the appointment of Anthony McQuillan to the committee as Chairman and Secretary was technically invalid, although in the circumstances, my findings will have limited practical effect.

Subsection 100(4) of the Body Corporate and Community Management Act provides as follows:
If persons, honestly and reasonably believing that they are the committee for the body corporate, make a decision while purportedly acting as the committee, the decision is taken to be a decision of the committee despite a defect in the election of 1 or more of the persons.

Secondly, as the financial year for this scheme ended on 30 September, the body corporate is required to hold an annual general meeting by the end of December and a new committee is to be elected at that meeting.

Consequently there is no need for me to order that a general meeting be held for the purposes to appointing new committee members. I would however suggest care be taken to ensure that all nominations are made in compliance with sections 11, 17 and 19 of the Body Corporate and Community Management (Accommodation Module) Regulation 2008. If it is proposed that an individual be nominated for membership of the committee in accordance with a power of attorney, care should be taken to ensure that the power of attorney complies with the requirements of the Power of Attorney Act.

I therefore propose to make the following two declaratory orders:

Owing to a technical defect in the power of attorney which purported to appoint Mr. Anthony McQuillan as attorney for the owner of lot 212, the appointment of Mr. Anthony McQuillan to the committee as Chairman and Secretary was invalid.

Decisions made by persons including Mr. Anthony McQuillan, who believed that they were properly appointed to the body corporate committee, are taken to be a decision of the committee notwithstanding the technical defect in the election of Mr. Anthony McQuillan.

I also believe that it is just and equitable for me to order that:
Mr. Anthony McQuillan is entitled to continue in the role of Chairman and Secretary until such time as an election is held at the next Annual General Meeting for the scheme which is required to be held by 30 December 2008.