Raffles on Capri [2008] QBCCMCmr 59 (21 February 2008)

Last Updated: 17 April 2008

REFERENCE: 0802-2007

ORDER OF AN ADJUDICATOR

MADE UNDER PART 9 OF CHAPTER 6

BODY CORPORATE AND COMMUNITY MANAGEMENT ACT 1997

Number of Scheme:	28124
Name of Scheme:	Raffles on Capri
Address of Scheme:	103 Salerno Street, ISLE OF CAPRI QLD 4217

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

Messrs Beake, Van Roy, Lucas, Barlow and Moore, ordinary members of the Body Corporate Committee

I hereby order that the application for the following order: That the EGM called for 25 October 2007 be declared invalid as the elected committee of the body corporate had no (in)put into the matters placed on the agenda and at no time authorised the Chairman/ Secretary/ Treasurer, Mr. Don Robertson to complete the Notice and Agenda of the meeting. Is dismissed.

STATEMENT OF ADJUDICATOR’S REASONS FOR DECISION - REF 0802-2007

“Raffles on Capri” CTS 28124

The scheme

Raffles on Capri is a subdivision of 51 lots registered as a Building Format Plan. The Regulation Module applying to the scheme is the Accommodation Module.

Application

By application received by this Office on 12 October 2007 and subsequently amended on 15 October 2007, the owners of lots 4, 22, 32, 41 and 43 have sought the following final outcomes:

That the EGM called for 25 October 2007 be declared invalid as the elected committee of the body corporate had no (in)put into the matters placed on the agenda and at no time authorised the Chairman/ Secretary/ Treasurer, Mr. Don Robertson to complete the Notice and Agenda of the meeting.

The applicant also sought an interim order to stop the EGM called for 25 October 2007 as per the outcome sought. However, on 24 October 2007 I declined to make an interim order as the evidence at hand indicated that the EGM was properly authorised and I believed that there would be ample opportunity to review the Sinking Fund Analysis and other financial matters at a future meeting of the committee or if necessary, a future general meeting.

Background

This application concerns an EGM which was called for the purposes of dealing with a number of items of unfinished business arising from an AGM held on 30 August 2007 including the following:

• Motion 4 which proposed to set the administration levy for the financial year ending 31 May 2008 at the rate of $157 (including GST) per lot entitlement per annum, being defeated;
• Motion 10 regarding appointment of Complete Body Corporate Services Pty. Ltd. as body corporate manager for a term of 2 years at $6,550 per annum, being ruled out of order, as the proposed expenditure exceeded $250 per lot and therefore 2 quotes were required;
• Motion 11 to reimburse travelling costs to committee members travelling from interstate being withdrawn after it was pointed out that the motion was discriminatory because persons travelling from within the State e.g. from Cairns, would not be so compensated;
• A number of queries regarding the accounts.
  

The Secretary subsequently called an EGM for 25 October 2007 for the purposes of dealing with items of unfinished business including those items mentioned above. However, the applicants contend that the EGM called for 25 October 2007 was not properly authorised by the committee;

Submissions

In considering the request for an interim order, submissions were sought from the Body Corporate Manager and from Mr. Don Robertson regarding the application for Interim Orders. Originally submissions were required by Monday 22 October but an extension until 5 pm, 23 October, was subsequently granted to the body corporate manager.

Submissions from the body corporate manager and Mr. Robertson included the following:

• At the AGM held on 30 August 2007 Mr. Don Robertson was elected Chairman, Secretary and Treasurer as he was the only nominee for those positions;
• A number of owners also agreed to become ordinary members of the committee;
• Motion 3 relating to adoption of the Administration Fund Budget was resolved in the affirmative by the owners although motion 4 – setting of administration fund levies, was defeated by one vote.
• Motion 10 relating to engagement of Complete Body Corporate Services was ruled out of order because although a second quotation had been obtained by the Chairman, it had not been considered by the meeting;
• The position of a body corporate being unable to strike a levy or engage a body corporate manager was considered at a subsequent body corporate committee meeting. It was pointed out that the body corporate would be unable to pay its bills and that the current body corporate manager had a good knowledge of the scheme;
• Apart from Mr. Moore, the other applicants are recent arrivals, having purchased their properties in 2007 and are unaware of the history of the scheme;
• Mr Moore, the spokesperson for the applicants, has had a run-in with the resident manager regarding enforcement of the scheme by-laws and is disaffected by the support given to the resident manager by the committee;
• There is no prohibition on persons such as Mr. Robertson canvassing support by way of a newsletter circulated to members;
• The minutes of the committee meeting held on 30 August 2007 record the following :

It was acknowledged that an EGM is required for the following issues to be finalised:

- Setting of Administration Fund levies. The Chairman advised that although the administration fund budget was approved, no levies were approved, resulting in the body corporate not having any income stream which will result in the body corporate struggling to meet its financial obligations until such time as the matter is resolved;
- The Chairman advised that he had previously sought various tenders for body corporate management and considered Kim Elliot and Complete Body Corporate services to be invaluable, noting that their fee was in accord with the other tenders. However, he undertook to obtain additional tenders for consideration.
- Travelling costs – The Chairman advised a revised motion for reimbursement of travelling costs for committee members will be proposed to the EGM for consideration.
- EGM to be called when all motions have been finalised.

It is submitted that:

• The committee therefore gave its authorisation to the Secretary to call the EGM.
  • The Administration fund budget was approved by a majority at the AGM;
  • The sinking fund budget and quantum of sinking fund levies were also carried at the AGM with very strong support;
  • Mr. Moore is acting in a divisive manner in order to further his own agenda.
    

On 26 October 2007, all owners were invited to make submissions by 16 November 2007 regarding the application for final orders.

A number of lot owners believed they had been unfairly deprived of their right to vote at the EGM as it was not stated in the Agenda or elsewhere, that proxy holders could not submit proxies on the motion to appoint a body corporate manager, and they were only informed of this restriction just before the motion was to be voted upon.

The body corporate manager made a further submission dated 15 November 2007 in which she referred to her earlier submission dated 23 October 2007, which set out the history of the scheme and the reasons why the EGM should be allowed to proceed. She also made the following additional submissions:

• The EGM was held on 25 October 2007 and a copy of the minutes was attached;
• As a consequence of the applicants becoming aware of the functions of the body corporate and history of the scheme, their views and opinions may have changed;
• The minutes of the EGM reflect that 3 of the 5 applicants voted for appointment of Complete Body Corporate Services to have a continued role in the scheme;
• Lines of communication between lot owners have greatly improved in recent times;
• The body corporate is now functioning in a harmonious manner and recent events have rendered it unnecessary for final orders to be made.
  

One of the applicants, Mr Moore, advised as follows:

• While he is aware that a Secretary can call a General Meeting, section 43(1) of the Accommodation Module Regulation states that the committee must prepare an agenda for each general meeting and he does not believe that Mr. Robertson, who occupies the positions of Chairman, Secretary and Treasurer was ever instructed or authorised by the other members of the committee to prepare the agenda;.
  • At this point in time the applicants are not pursuing the matter of reimbursement of fares or issuing of the administration levy as the first matter is not important and the latter is necessary to allow the body corporate to function;
  • The level of administration levies will be pursued at a later date and already progress has been made on reducing costs with the new resident manager;
  • It is disputed that the applicants were aware that the motion to appoint the body corporate manager was to be resubmitted, as the minutes of the committee meeting state “the Chairman undertook to obtain additional tenders for consideration”
  • They believe that the above matters are relevant to the request to have the EGM invalidated and the appointment of the BCM set aside;
  • Five owners had given their proxies to vote at the EGM on 25/10/07 but because they were not advised in the Notice and Agenda of the EGM that proxies could not be exercised in the appointment of a body corporate manager, they were disenfranchised .
    

Jurisdiction

Section 227(1)(b) of the Body Corporate and Community Management Act 1997 provides that a dispute between an owner or occupier of a lot and the body corporate, is a dispute which may be resolved under the dispute resolution provisions of the Act.

Further Section 227(1)(g)of the Body Corporate and Community Management Act 1997 provides that a dispute between a committee member and the body corporate, is a dispute which may be resolved under the dispute resolution provisions of the Act.

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

As stated above, by application received by this Office on 12 October 2007 and subsequently amended on 15 October 2007 the applicants sought an interim order to stop the EGM called for 25 October 2007. However, on 24 October 2007 I declined to make an interim order as the evidence at hand indicated that the EGM was properly authorised and I believed that there would be ample opportunity to review the Sinking Fund Analysis and other financial matters at a future meeting of the committee or if necessary, a future general meeting.

The principal matter for my consideration at this point in time is the applicants’ argument that the EGM called for 25 October 2007 be declared invalid owing to a lack of input into the agenda for the meeting.

I have again reviewed the minutes of the committee meeting held on 30 August 2007 and note that the following appears under the heading “General Business”:

It was acknowledged that an EGM is required for the following issues to be finalised:

- Setting of Administration Fund levies. The Chairman advised that although the administration fund budget was approved, no levies were approved, resulting in the body corporate not having any income stream which will result in the body corporate struggling to meet its financial obligations until such time as the matter is resolved;
- The Chairman advised that he had previously sought various tenders for body corporate management and considered Kim Elliot and Complete Body Corporate services to be invaluable, noting that their fee was in accord with the other tenders. However, he undertook to obtain additional tenders for consideration.
- Travelling costs – The Chairman advised a revised motion for reimbursement of travelling costs for committee members will be proposed to the EGM for consideration.
- EGM to be called when all motions have been finalised.

The accuracy of the above passage has not been disputed by the applicants and I believe it is reasonable to conclude that the committee therefore gave its authorisation to the Secretary to call the EGM for the purposes of dealing with the above topics.

In his reply to submissions, Mr Moore states that while he is aware that a Secretary can call a General Meeting, section 43(1) of the Accommodation Module Regulation states that the committee must prepare an agenda for each general meeting. In my view the minutes of the committee meeting reflect an acknowledgement by the committee as to the substance of the motions that were considered at the EGM on 25 October 2007, as per the minutes of that meeting.

While it may be arguable that section 43(1) of the Accommodation Module Regulation contemplates that a written agenda be prepared for consideration by the committee, I would point out that the courts have commented that non-compliance of an insubstantial nature should not
be allowed to imperil the actions of bodies corporate or their committees, particularly in the instance of committees where actions are taken in good faith[1].

For the above reasons, I believe that the application should be dismissed.

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[1] See for example Wei-Xin Chen v Body Corporate for Wishart Village CTS 19482, Appeal 4080
of 2000, District Court Brisbane, 29 May 2001