Ivory Palms Resort [2008] QBCCMCmr 7 (14 January 2008)

Number of Scheme:	23175
Name of Scheme:	Ivory Palms Resort
Address of Scheme:	73 Hilton Terrace NOOSAVILLE QLD 4566

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

I hereby order that the application for an order that Resolution 9 (Application to Noosa Council for Permanent Occupancy) of the Annual General Meeting held on 15 September 2007 be declared invalid and supplementary orders, is dismissed.

STATEMENT OF ADJUDICATOR’S REASONS FOR DECISION - REF 0772-2007

"Ivory Palms Resort" CTS 23175

Application

This application is by Peter Edward Lamb, the owner of lot 61 (applicant) against the body corporate seeking an order that motion 9 (Application to Noosa Council for Permanent Occupancy) passed at the Annual General Meeting (AGM) on 15 September 2007 be declared invalid and other supplementary orders.

Minutes of the AGM of 15 September 2007 record the following in relation to Motion 9:

Ordinary Resolution – Application to Noosa Council for Permanent Occupancy

Mr Lockwood questioned whether sufficient information had been provided by the owners submitting the motions on the application. He noted that there had been no costs provided or what information the council would require to consider the application. He also questioned whether an impact study needed to be undertaken to properly assess the impact of permanent occupancy on the complex. Mr Staehr advised that he is obligated to present the motions as they are provided and it is up to owners to submit their votes on the information they receive.

It is resolved that the Body Corporate make an application to the Noosa Council to change the zoning of the complex to allow for permanent occupancy to be permitted in the property.

YES: 47 NO: 27 ABSTAIN: Nil INVALID VOTES: 2

The explanatory schedule recorded the following under "Motions Submitted by Committee":

This motion is to authorise the Body Corporate to make an application to the Noosa Council to allow permanent occupancy within the complex.

Note: Due to the large number of motions submitted by Lot Owners the submissions have been summarised into one (1) motion.

The voting paper for the AGM records Motion 9 as having been submitted by the owners of lots 28, 80, 88, 106 and 108.

On 11 October 2007, I made the following interim order in respect of this matter:

I hereby order that, pending a final determination of this application, the body corporate for Ivory Palms Resort community titles scheme 23175 (including its committee) must not proceed with, implement or otherwise act upon Resolution 9 (Application to Noosa Council for Permanent Occupancy), purportedly made at the Annual General Meeting held on 15 September 2007.

This interim order has effect until 12 months have elapsed from the date of this order, a further interim or final order for the application is issued, or until the application is withdrawn, rejected or otherwise ended (whichever is the earlier).

Grounds

The applicant’s grounds are to the following effect:

Jurisdiction

"Ivory Palms Resort" is a community titles scheme under the Body Corporate and Community Management Act 1997 (Act) and the Body Corporate and Community Management (Accommodation Module) Regulation 1997 (Accommodation Module). It comprises 133 lots and common property.

This is a dispute between an owner and the body corporate about an alleged contravention of the Act, or the exercise of rights or powers, or the performance of duties, under the Act and comes within the dispute resolution provisions of the Act (sections 226, 227 and 228).

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-

(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)).

Submissions

Submissions in response to the application for final orders were sought from all owners (excluding the applicant), the committee and the body corporate manager. A total of 39 submissions (representing owners of 47 lots) were received, all from owners. Of the 39 submissions, 27 were against the orders sought being granted, stating that they support the body corporate making application to council to change the current zoning restriction to allow permanent occupancy. 11 submissions were in favour of the application, stating that they did not support the motion. One submission was neither in favour of, nor opposed to, the application, but simply asked to be kept informed in relation to the matter. Neither the committee, nor the body corporate manager made submission in relation to the request for final orders.

Decision

Insufficient Information Presented with the Motion

The applicant states that he has not been given any indication of the processes involved in making the application and has no idea of any costs involved. He also believes that Motion 9 does not follow the clear guidelines as outlined in the "Submitting Motions for a Body Corporate Meeting" Fact Sheet.

As stated in my Reasons for Decision in respect of the Interim Order, I agree with the applicant that Motion 9 did not strictly comply with the "CLEAR" format for the submission of motions recommended by this office in that no expenses involved are specified, nor is any time-frame specified. Further, the information supplied with the motion was scant. However, I do not believe that these deficiencies render Motion 9 invalid. Failing to cost a motion or specify time frames does not necessarily make it inconsistent with the legislation or unenforceable such that it should be ruled invalid. Such a motion can serve as a useful tool to determine whether there is sufficient interest amongst owners to warrant further investigation that may include costing the proposal. I am of the view, however, that there are limitations on the implementation of such a motion. For example, as no costs have been specified, I consider that the body corporate’s expenditure on implementing the resolution is limited to the relevant limit for committee spending ($16,625, unless the body corporate has, by special resolution, decided a greater amount). As no time frame is specified, I consider that the motion should be implemented within a reasonable time. Further, as owners were not provided with a copy of an application, it is likely that a further motion (including a copy of the completed application to Council) would be required to be passed before the application could be lodged with Council.

In conclusion, I do not believe that the failure to strictly comply with the "CLEAR" format for the submission of motions recommended by this office, renders Motion 9 invalid.

Type of Resolution Required

The applicant alleges that Motion 9 was incorrectly submitted as requiring an ordinary resolution and should have been designated as requiring a special resolution, suggesting that the importance of the subject matter of the motion warrants this.

I do not find any support for the applicant’s argument in this respect in the legislation. The legislation specifies that certain subjects require particular resolutions. For example, a resolution without dissent is required to consent to record a new community management statement to include an exclusive use by-law and a special resolution is required to authorise an improvement to common property. However, where the legislation does not specify that a particular resolution is required for a certain subject matter, one can assume that an ordinary resolution is sufficient, or even a committee resolution, unless the matter is a restricted issue for the committee. In the case of Motion 9, I believe the subject matter is a restricted issue for the committee (section 24(1)(b), Accommodation Module) as it has the potential to change rights, privileges or obligations of owners of lots within the scheme, and, as such, the matter was correctly put to owners in general meeting as requiring an ordinary resolution. The voting results indicate that the motion was passed by ordinary resolution.

Owners Misunderstood Motion 9

Submissions made in response to the request for the interim order suggest that owners may have misunderstood Motion 9 and incorrectly assumed that the committee supported it. In response to this, submissions were sought from all owners.

The submissions made in response to the request for final orders simply to do substantiate the suggestion that owners misunderstood Motion 9. Of the 11 submissions made supporting the applicant, an examination of the Attendance and Voting Register for the AGM of 15 September 2007 (which I requested as part of my investigation of this dispute) reveals that 9 of those owners voted against Motion 9. Two owners who claim to have been misled didn’t exercise a vote in relation to Motion 9. Even if these owners (representing four lots) had voted against Motion 9, the voting results would not alter sufficiently for Motion 9 not to have been passed by ordinary resolution.

Of the 39 submissions made in response to the application for final orders, 27 were against the orders sought being made and only 11 were in favour of the application. This appears to me to be consistent with the voting results in relation to Motion 9.

Conclusion

While I concede that Motion 9 of the AGM of 15 September 2007 could have been better drafted, I do not consider that the deficiencies in this regard are sufficient to warrant me declaring Motion 9 invalid. Further, I consider that Motion 9 was correctly designated as an ordinary resolution and was validly passed as such, based on the voting results. The submissions made in response to the application do not support the suggestion that owners were misled by the way Motion 9 was presented.

Owners voted such that Motion 9 was passed by ordinary resolution and the body corporate is now bound to implement that decision, subject to my comments above in relation to not expending body corporate funds in excess of the relevant limit for committee spending, without further authorisation. In addition, before lodgement with Council, I believe the completed application should be put to owners in general meeting for their consideration.

In the circumstances, I do not consider it just and equitable to grant the orders sought by the applicant. I have dismissed the application.

•	States that Ivory Palms Resort was built to cater for leisure and conference guests and is zoned for holiday letting. Since the building of stage three, some parties have sort to have the resort be allowed permanent letting.
•	Alleges that, at the time of receipt of the voting papers for the AGM, he did not note the type of resolution Motion 9 was presented as, or that the explanatory note simply paraphrased the wording of the motion.
•	States that he has not been given any indication of the processes involved in making the application and has no idea of any costs involved.
•	Believes that Motion 9 does not follow the clear guidelines as outlined in the "Submitting Motions for a Body Corporate Meeting" Fact Sheet.
•	Believes that Motion 9 should have been presented as a special resolution.

Queensland Body Corporate and Community Management Commissioner - Adjudicators Orders

Ivory Palms Resort [2008] QBCCMCmr 7 (14 January 2008)