GC3 [2008] QBCCMCmr 453 (2 December 2008)

Last Updated: 7 January 2009

REFERENCE: 0999-2008

INTERIM ORDER OF AN ADJUDICATOR

MADE UNDER PART 9 OF CHAPTER 6

BODY CORPORATE AND COMMUNITY MANAGEMENT ACT 1997

Number of Scheme:	38396
Name of Scheme:	GC3
Address of Scheme:	803 Stanley Street WOOLLOONGABBA QLD 4102

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

Rick Ng, a co-owner of lot 458

I hereby order that owing to the possibility that a resolution on motion 2, on the agenda for the EGM to be held on 4 November 2008 could be invalid, the Body Corporate is to refrain from carrying out any resolution upon that motion, including entry into a Shared Facilities Agreement until a final order is made in respect of this dispute resolution application.

STATEMENT OF ADJUDICATOR’S REASONS FOR DECISION - REF 0999-2008

“GC3” CTS 38396

Scheme

GC3 CTS 38396 was registered as a building format plan of subdivision in April 2008 and consists of 154 lots. It is regulated by the Body Corporate and Community Management (Accommodation Module) Regulation 1997 (the Accommodation Module).

Application

This application was lodged on 20 November 2008 by a co-owner of lot 458 who is seeking the following Interim Order:

An order directing the proposed Extraordinary General Meeting on 4/12/08 to be cancelled or postponed (or alternatively, directing resolutions of the EGM to be suspended from being carried until a determination on this Adjudication Application and a determination on the related adjudication application reference no. 860-2008 are made.

The applicant is also seeking the following Final Outcomes:

An adjudicator’s order declaring that the body corporate committee’s calling of the extraordinary general meeting (EGM) to be held on 4 December 2008 has not followed the requirements of the Act and the applicable Regulation.

Background

The applicant states that there is currently an adjudication application in this office (860/2008) in relation to a dispute between Mr. Ng and the body corporate of GC3 which involves an allegation by Mr. Ng that a shared facilities agreement by the body corporate has not been made in accordance with the provisions of the Act and Accommodation Module Regulation.

On 12 November 2008, the body corporate manager distributed the following papers to all lot owners:

• “Final version” of the minutes of the first committee meeting held on Friday 10 October 2008;
• “Flying Minute” of vote outside committee meeting on Wednesday 19 November 2008; and
• Notice of EGM to be held on Thursday 4 December 2008.
  

He does not believe the meeting was properly called because:

• The “flying minute” resolution does not specify any motions and/ or matters authorised by the committee to be included on the agenda of the proposed EGM;
• The resolution allowing the Secretary to call an EGM at any time on any date is not in the best interests of all owners;
• The flying minute was dated 19 November but distributed on 12 November;
• The flying minute has not been ratified by a formal committee meeting;
• Only 5 of the 7 committee members voted on the motion;
• A 7 day period has not been allowed for any Notice of Opposition against a committee resolution to be raised by lot owners in accordance with the Act and Regulation prior to the Notice of EGM being distributed to lot owners.
  

The applicant also believes it is inappropriate for the body corporate to hold an EGM including “Motion 2 – Shared Facilities Agreement” prior to a determination of adjudication application.

Although the body corporate committee was invited to make submissions by 1 December 2008, no submissions had been received by me as at 4 pm on Tuesday 2 November.

JURISDICTION

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 authorization 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

At this point in time I am considering the application for the following interim order:

An order directing the proposed Extraordinary General Meeting on 4/12/08 to be cancelled or postponed (or alternatively, directing resolutions of the EGM to be suspended from being carried until a determination on this Adjudication Application and a determination on the related adjudication application reference no. 860-2008 are made.

While I am permitted to make orders on an ex parte basis, I am reluctant to make orders without considering the views of the other party to the dispute. I must therefore decide whether the circumstances indicate that interim orders are warranted. An interim order will not be granted unless is it necessary due to the nature or urgency of the circumstances to which the application relates[1] and any order granted must be just and equitable in the circumstances.[2] The examples in section 279 of the Act indicate the usual circumstances where an interim order might be made and are in the nature of injunctive relief.

While it is not possible to exhaustively define what matters might be the subject of an interim order, an applicant does needs to establish that the circumstances warrant an interim order. An interim order will not be made if the only urgency relates to an applicant’s desire to resolve or expedite the matters in dispute, or where the nature of the circumstances are such that the matter is not capable of being dealt with in the context of an interim order.

Sub-sections 279(1) & (2) provide that -
(1) The adjudicator may make an interim order if satisfied, on reasonable grounds, that an interim order is necessary because of the nature or urgency of the circumstances to which the application relates.
Examples
1. The adjudicator may stop the body corporate from carrying out work on common property until a dispute about the irregularity of proceedings has been investigated and resolved.
2. The adjudicator may stop a general meeting deciding or acting on a particular issue until it has been investigated and resolved.
(2) An interim order
(a) has effect for a period (not longer than 1 year) stated in the order; and
(b) may be extended, varied, renewed or cancelled by the adjudicator until a final order is made; (c) may be cancelled by a later order made by the adjudicator; and
(d) if it does not lapse or is not cancelled earlier, lapses when
(i) the application is withdrawn; or
(ii) the commissioner gives the person who made the application a written notice under section 241 rejecting the application; or
(iii) a final order is made by an adjudicator to whom the application is referred. ...

It is my belief that the balance of convenience does not favour an order to prevent the Extraordinary General Meeting from proceeding. This is because a good deal of preparation and expense is involved in organising a general meeting for a scheme of this size. In addition, I have perused the agenda for the meeting and note that motion 2 regarding the Shared Facilities Agreement is only one of numerous motions to be considered at the EGM.

While I do not propose to prevent the meeting from going ahead, I do propose to make an interim order to prevent the body corporate from implementing any resolution upon motion 2 above, including entry into the Shared Facilities Agreement.

In relation to the applicant’s allegations regarding the validity of the vote outside of a committee meeting, I simply do not have sufficient information at this point in time to make a decision as to the validity of the committee vote. I therefore propose to deal with this issue in the course of making my final orders, which will obviously necessitate seeking submissions from lot owners and from the body corporate.

This Interim Order will be of a temporary nature to remain in effect until such time as all lot owners are afforded an opportunity to make submissions and a final order is made regarding this dispute. I realise that the applicant and body corporate would be eager to resolve this matter and will seek to expedite the dispute resolution process.

REFERENCE: 0999-2008A

INTERIM ORDER OF AN ADJUDICATOR

MADE UNDER PART 9 OF CHAPTER 6

BODY CORPORATE AND COMMUNITY MANAGEMENT ACT 1997

Number of Scheme:	38396
Name of Scheme:	GC3
Address of Scheme:	803 Stanley Street WOOLLOONGABBA QLD 4102

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

Rick Ng, a co-owner of lot 458

I hereby order that the application for An order directing the proposed Extraordinary General Meeting on 4/12/08 to be cancelled or postponed (or alternatively, directing resolutions of the EGM to be suspended from being carried until a determination on this Adjudication Application and a determination on the related adjudication application reference no. 860-2008 are made. is dismissed. I further order that the Interim Order dated 2 December 2008 ceases to have effect as from the date of this order.

STATEMENT OF ADJUDICATOR’S REASONS FOR DECISION - REF 0999-2008A

“GC3” CTS 38396

The purpose of this Order and Statement of Reasons is to replace an earlier Interim Order dated 2 December 2008.

In that order I commented that although the body corporate committee was invited to make submissions by 1 December 2008, no submissions had been received from the body corporate. However, it has subsequently come to my attention that although a submission was made by the body corporate, it had been misfiled within this office, possibly due to the presence of two dispute resolution applications regarding the same scheme. I have also become aware that the original interim order contains a typographical error in that it refers to the month of November instead of December.

Scheme

GC3 CTS 38396 was registered as a building format plan of subdivision in April 2008 and consists of 154 lots. It is regulated by the Body Corporate and Community Management (Accommodation Module) Regulation (the Accommodation Module).

Application

This application was lodged on 20 November 2008 by a co-owner of lot 458 who is seeking the following Interim Order:

An order directing the proposed Extraordinary General Meeting on 4/12/08 to be cancelled or postponed (or alternatively, directing resolutions of the EGM to be suspended from being carried until a determination on this Adjudication Application and a determination on the related adjudication application reference no. 860-2008 are made.

The applicant is also seeking the following Final Outcomes:

An adjudicator’s order declaring that the body corporate committee’s calling of the extraordinary general meeting (EGM) to be held on 4 December 2008 has not followed the requirements of the Act and the applicable Regulation.

Background

The applicant states that there is currently an adjudication application in this office (860/2008) in relation to a dispute between Mr. Ng and the body corporate of GC3 which involves an allegation by Mr. Ng that a shared facilities agreement by the body corporate has not been made in accordance with the provisions of the Act and Accommodation Module Regulation.

The applicant states that on 12 November 2008, the body corporate manager distributed the following papers to all lot owners:

• “Final version” of the minutes of the first committee meeting held on Friday 10 October 2008;
• “Flying Minute” of vote outside committee meeting on Wednesday 19 November 2008; and
• Notice of EGM to be held on Thursday 4 December 2008.
  

However, the applicant does not believe that the meeting was properly called because:

• The “flying minute” resolution does not specify any motions and/ or matters authorised by the committee to be included on the agenda of the proposed EGM;
• The resolution allowing the Secretary to call an EGM at any time on any date is not in the best interests of all owners;
• The flying minute was dated 19 November but distributed on 12 November;
• The flying minute has not been ratified by a formal committee meeting;
• Only 5 of the 7 committee members voted on the motion;
• A 7 day period has not been allowed for any Notice of Opposition against a committee resolution to be raised by lot owners in accordance with the Act and Regulation prior to the Notice of EGM being distributed to lot owners.
  

In my initial Interim Order I commented that although the body corporate committee was invited to make submissions by 1 December 2008, no submissions had been received. However, it has subsequently come to my attention that the body corporate had in fact made the following submissions:

• Section 63(1) of the Body Corporate and Community Management (Accommodation Module) Regulation 2008 states that a resolution of the committee is required to give a member of the committee authority to call a general meeting but there is no requirement for the resolution to contain motions and/ or matters to be tabled at that general meeting;
• The Secretary is entitled to determine the date, time and venue of the meeting;
• Motions voted on outside a committee meeting are not valid until 7 days after notice of that motion is distributed to all lot owners;
• If, as the applicant contends, a motion voted on outside a committee meeting could not be acted on until after it had been ratified at the next committee meeting, it would defeat the purpose of having a vote outside a committee meeting;
• The motion will be tabled at the first committee meeting since it was voted upon as required by subsection 54(6);
• Subsection 54(1) states that a resolution on a motion is valid if the majority of voting members agree to vote on a motion and by the applicant’s own admission 5 of the 7 members voted on the motion with a result of Yes – 5, No – 0, abstain – 0.;
• The matter was not dealt with at a formal committee meeting as the principal body corporate is due to hold its AGM on 11 December 2008 and there was therefore a need for the EGM to be held by 4 December at the latest, to ensure that the SFA could be tabled at the AGM for the PBC for ratification.
• The EGM would overcome the issues presented by the alleged errors in the original SFA;
• The application should be dismissed.
  

On Friday 5 December, 2008 I was further advised that Motion 2 regarding the SFA was voted upon on 4 December with the following results:
51 votes for; 2 votes against; 0 Abstain.

JURISDICTION

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 authorization 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

As stated above, the purpose of this Order and Statement of Reasons is to replace an earlier Interim Order dated 2 December 2008. Following receipt of my Interim Order, the body corporate advised that it had in fact made a submission regarding the application for the following Interim Order:

An order directing the proposed Extraordinary General Meeting on 4/12/08 to be cancelled or postponed (or alternatively, directing resolutions of the EGM to be suspended from being carried until a determination on this Adjudication Application and a determination on the related adjudication application reference no. 860-2008 are made.

The applicant argued that the EGM should not proceed, or alternatively, that resolutions of that meeting should not be given effect to, for the following reasons:

• The “flying minute” resolution does not specify any motions and/ or matters authorised by the committee to be included on the agenda of the proposed EGM;
• The resolution allows the Secretary to call an EGM at any time on any date;
• The flying minute was dated 19 November but distributed on 12 November;
• The flying minute has not been ratified by a formal committee meeting;
• Only 5 of the 7 committee members voted on the motion;
• A 7 day period has not been allowed for any Notice of Opposition against a committee resolution to be raised by lot owners in accordance with the Act and Regulation prior to the Notice of EGM being distributed to lot owners.
  

However I have now had the benefit of reading the submission by the body corporate and believe that each of the above concerns raised by the applicant have been addressed by the following submissions of the body corporate:

• Section 63(1) of the Body Corporate and Community Management (Accommodation Module) Regulation 2008 states that a resolution of the committee is required to give a member of the committee authority to call a general meeting but there is no requirement for the resolution to contain motions and/ or matters to be tabled at that general meeting;
• The Secretary is entitled to determine the date, time and venue of the meeting;
• Motions voted on outside a committee meeting are not valid until 7 days after notice of that motion is distributed to all lot owners;
• If, as the applicant contends, a motion voted on outside a committee meeting could not be acted on until after it had been ratified at the next committee meeting, it would defeat the purpose of having a vote outside a committee meeting;
• The motion will be tabled at the first committee meeting since it was voted upon as required by subsection 54(6);
• Subsection 54(1) states that a resolution on a motion is valid if the majority of voting members agree to vote on a motion and by the applicant’s own admission 5 of the 7 members voted on the motion with a result of Yes – 5, No – 0, abstain – 0.;
  

Further, I note that the EGM was held on 4 December 2008 and lot owners decided to vote in favour of the Shared Facilities Agreement (51 votes for; 2 votes against; 0 Abstentions).

In my original Interim Order, I expressed the view that the balance of convenience does not favour an order to prevent the Extraordinary General Meeting from proceeding. This is because a good deal of preparation and expense is involved in organising a general meeting for a scheme of this size. In addition, I noted that motion 2 regarding the Shared Facilities Agreement was only one of numerous motions to be considered at the EGM.

In relation to the applicant’s allegations regarding the validity of the vote outside of a committee meeting, I originally stated that I did not have sufficient information at that point in time to make a decision as to the validity of the committee vote. However, I have now had the opportunity to read the submission of the body corporate and on the available evidence, am of the view that the resolution upon motion 2 is most probably a valid resolution of the body corporate.

Accordingly, I propose to dismiss the application for the interim orders sought by the applicant and to rescind my interim Order dated 2 December 2008.

However, the application for final orders remains outstanding and I propose to afford the body corporate and all lot owners an opportunity to make submissions before making a decision upon the final orders sought by the applicant.

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[1] Section 279 of the Act
[2] Section 276 of the Act