Coronaton Gardens [2008] QBCCMCmr 75 (4 March 2008)

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

I hereby order that the application for an order

“that Motion 2 of an extraordinary general meeting held on 14th December 2007 be declared out of order; and
that the remaining motions be similarly declared void; and
an administrator be appointed to restore order into the business affairs of the body corporate and its manager.”

is dismissed.

I further order that voting papers delivered to the body corporate via the body corporate manager Strata-Jem Pty Ltd or otherwise, prior to or at the extraordinary general meeting on 14th December 2007 be counted in the vote on motions 2, 3, 4, 5, and 6 as set on the agenda for that extraordinary general meeting so that a correct record of the voting tally for those motions may be made.

This is an application dated 20th December 2007 and amended on 24th December 2007 by Rosemary Smith (the Applicant) owner of Lot 25 (Unit 20) in the scheme, against the body corporate (the body corporate) for an order as follows:

The Applicant sought an interim order for identical outcomes. The interim application was not referred by the Commissioner to an adjudicator under section 247 Act, but submissions on the final outcomes sought were invited straight away on 2nd January 2008. An application for an interim order is not generally applicable where the intention is simply to expedite the final order. An interim order is in the nature of an injunction, eg. to prevent some irreversible event from taking place, such as cutting down a tree; or to deal with an emergency such as an escape of water, and provides a “holding” pattern whilst the final outcomes are determined.

On 7th January 2008, another application from this scheme was received by this Office relating to the validity of the same meeting. It was lodged by a new committee acting on behalf of the body corporate, against the body corporate manager for the scheme, requesting that the body corporate manager takes instruction from the new committee, and that it reimburses some fees to the body corporate. This committee is not recognised as the validly appointed committee by the Applicant, since it was chosen following Motion 2 of the general meeting, which she seeks to be declared out of order. This matter carries file reference 0007-2008.

On 18th January 2008, I made an interim order in matter 0007-2008, so that the body corporate manager could pay certain bills outstanding and becoming due for payment prior to any final order being made.

In that interim order I advised that I would make cross-reference to this matter.

“Coronation Gardens” community titles scheme 24610 is a community titles scheme governed by the Body Corporate and Community Management Act 1997 (the Act) and the Body Corporate and Community Management (Standard Module) Regulation 1997 (Standard Module). There are 49 lots in the scheme created under three Group Title Plans of subdivision and re-subdivision.

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)).

The Applicant says that the notice of an extraordinary general meeting (the EGM) was given on 14th November 2007 for the EGM to be held on 14th December 2007. The five motions for the meeting were all put forward by one committee member George Borg Olivier (Mr Borg Olivier). Motion 2 was to remove the committee of the body corporate from office and elect a new committee. Motions 3 – 5 concerned closing the existing bank account and opening a new one, and setting up a system for approving payments. Motion 6 was about retaining certain trees on the common property.

At a committee meeting on 15th November 2007, Mr Borg Olivier was asked if he felt it necessary to proceed with the EGM since he agreed with the committee’s resolution at that meeting for dealing with financial procedures, but he “refused to withdraw from those proceedings.” He was then asked to leave the committee meeting whilst the remainder of the committee discussed the legality of the proposed five motions and decided to seek legal advice about them. The remainder of the committee sought legal advice from Steindl’s Lawyers (Steindl’s), which was obtained in writing on 22nd November 2007. Steindl’s confirmed “the Committee’s opinion as to the legality of Borg Olivier’s proposed motions.”

The Applicant provides a copy of the 4-page advice from Steindls. Steindls concluded that if Motion 2 was passed and the entire committee removed from office, the body corporate would be operating contrary to the Body Corporate and Community Management Act 1997. It suggested that the chairman should rule Motion 2 out of order; or take no action which might mean a lot owner would make an application to this Office for an administrator to be appointed and meanwhile the body corporate would have no committee. It also stated that Motion 3 about closing and transferring the bank account, as drafted, was contrary to the Act and should be ruled out of order by the chairman. It suggested that the committee could substitute alternative motions to achieve the same ends.

The chairman of the committee then sent an undated circular to all lot owners advising them of the legal position and the consequences of proceeding with the motions as drafted. Mr Borg Olivier also wrote a letter to all lot-owners “rejecting the advices of our legal advisers.” The Applicant provides a copy of the chairman’s letter which states that it is in response to Mr Borg Olivier’s letter of 20th November 2007. She also provides a copy of a letter dated 30th November from Mr Borg Olivier to all owners replying to the chairman’s circular, that there is no certainty that anything proposed is in breach of the legislation, that it would not be necessary to appoint an administrator, and recommending that the body corporate proceed with the EGM.

At the EGM the chairman ruled Motion 2 out of order “after receiving details of the vote.” The meeting descended into chaos with owners arguing and shouting from the floor. The body corporate manager tried to restore order and asked if everyone had read Steindl’s advice and if there were any questions. The Applicant says - “There was no response from the floor and she was shouted down and treated in a very rude manner.” The body corporate manager advised the chairman to adjourn the meeting “pending resumption when things calmed down.” The Applicant says that the meeting was not “closed” and “as such could have been resumed.” No minutes have yet been prepared for this EGM. The Applicant left the meeting with other members of the executive committee and the representatives of the body corporate manager.

The Applicant says that Mr Borg Olivier took it upon himself to continue the meeting and to appoint a new committee with himself as chairman. Later that day he put a statement on the community notice board. The statement advised the owners of what had happened at the meeting and the names of the newly elected committee members, and saying that the chairman of the meeting had not allowed any discussion. He said: “The votes were significantly in favour of all motions.” He then wrote to the body corporate manager telling it what he expected of it, and the body corporate manager replied rejecting “Borg Olivier’s assertions and instructions.”

In accordance with section 243(2)(a) Act, submissions were invited from all lot owners. The following submitters addressed the issues:

Alfons and Kathleen Rothleitner (Mr and Mrs Rothleitner) co-owners of Lot 3 concur with the Applicant. Mr Rothleitner is the existing chairman for the scheme. The committee relied upon the legal advice from Steindl’s. He says that he ruled Motion 2 out of order and that Mr Borg Olivier “orchestrated objections that prevented the continuation of the EGM” so that he, as chairman, was not able to bring the meeting to order. On the advice of the body corporate manager, he “adjourned the meeting and left.”

Dorothy Rudd opposes the application. She says that it was not the members who did not allow the chairman to speak but the chairman who would not allow the members to speak. The chairman’s behaviour was “disappointing.” The Applicant was relying on the legal opinion circulated to owners at the beginning of the meeting. Since the Applicant was the secretary, she should have made sure a copy was given to owners at the same time as the committee received it which was three weeks previously. In the meantime, the majority of owners had cast their votes. She says that Mr Borg Olivier did not write to anyone about the legal opinion because he did not know about it. He also did not appoint the committee. All persons who wished to be nominated were considered for the new committee and it was properly elected. The Applicant was not present for the election of the committee. She says that the scheme does not need an administrator.

Frederick (Rick) Levin, owner of Lot 31, does not support the Applicant. He says that she had left the meeting by the time the new committee was elected so she cannot comment on the procedure. Mr Borg Olivier did not appoint the new committee but it was done by the persons present at the meeting. The EGM was requested by 23 lot owners, of which he was one.

The legal opinion from Steindls was withheld from some members of the committee and the body corporate until the day of the EGM which was “disgraceful.” The owners paid for that opinion and were entitled to see it when it was received, and before the majority of votes had been cast. He also says that Mr Borg Olivier did not write to the owners rejecting the legal advice since he had not seen it by the time he wrote his letter to lot-owners.

The chairman would not allow any questions at the meeting. After the votes for Motion 2 were counted, the chairman declared the motion out of order, and refused to allow the election of the committee. He also refused to allow a vote reversing his ruling that the motion was out of order, and on the advice of the body corporate manager, he left the meeting. There is no need for an administrator because the scheme now has an “experienced functioning committee.”

Frederick Hicks co-owner of lot 45 says he has been alarmed by the committee existing at the time of the EGM for some time. He supported the motions submitted to the EGM. He says that it was the chairman who started to lose control of the EGM by attempting to shout down a member of the body corporate who was attempting to make a point. He thinks the actions of the members of the body corporate who remained at the meeting were justified and “ unfortunately necessary.”

Pamela Whitcombe owner of Lot 18 is one of the 23 owners who requested the EGM. The motions put to the EGM were the motions of the petitioners and not those of Mr Borg Olivier. She was not able to attend the meeting but placed a written vote with the body corporate manager a few days before the meeting. She was not shown the legal opinion which was handed out at the meeting. She subsequently borrowed someone’s else’s copy. She thinks that the chairman, the Applicant as Secretary and the body corporate manager “must shoulder full responsibility for keeping the body corporate in the dark on such an important issue and should not be allowed to use the contents of the legal opinion as a reason for voiding the outcome of the EGM.” She sees no need for an administrator.

Beverley Reardon, owner of Lot 37, says she was present throughout the EGM. The EGM was requested by 47% of owners who signed a petition and it was not correct of the committee to ask Mr Borg Olivier to withdraw the request for an EGM. The chairman did not “make every effort to speak to owners present,” as alleged by the Applicant. He repeatedly refused to answer questions from the floor and kept telling those who wished to speak to sit down.

She believes that the Chairman handing out the legal opinion before the start of the meeting was a “scare tactic.” It was dated 22nd November 2007. The legal opinion actually detailed that if a chairman ruled a motion out of order than those present could reverse the ruling, but “the chairman refused to accept this advice and refused to allow the members present to vote on the matter.” The members who would not accept the Chairman’s ruling took a vote reversing the ruling. At this point the body corporate manager said that Mr. Rothleitner was still the chairman until the closure of the meeting and advised him to adjourn the meeting after which, the chair, the treasurer, the Applicant and the two body corporate representatives left the meeting leaving 20 owners some of whom had taken time off work feeling very upset.

She says that the following election was carried out legally. The Applicant could have stood for election had she wished to do so. Two members of the committee just removed from office were elected back in. If the Applicant’s application is successful, the Applicant is asking for the will of the body corporate to be set aside.

Janelle and Chris Wallace co-owners of Lot 38 say that they were present at the EGM, and that the majority of owners at the EGM had attended with intent to elect a new committee as they had lost confidence in the chairman. The chairman, knowing this, “was attempting to close the meeting and not proceed with Motion 2,” and the atmosphere was tense from the start. They say that the meeting did not break up in disarray, but the few who disagreed left and the meeting continued on in a “very organised and civil manner.” They were happy for Mr Borg Olivier to chair the remainder of the meeting and the statement which he subsequently put on the notice board included the names of the new committee “voted for by us for us the majority of owners in Coronation Gardens.”

Conor (Mr Dwyer) and Marlene Dwyer co-owners of Lot 6 support the application. They say that the scheme has a history of an “uneasy relationship” between certain owners. The unpleasantness has caused some lot owners to sell up. About four or five days prior to the EGM, the existing chairman forwarded to each lot owner a written response to a letter received from Mr Borg-Olivier. The purpose was to make the owners aware of their implications in voting out the entire committee. They think that the existing chairman was right in his interpretation of section 7 of the Standard Module and in telling lot owners that the motions should be put separately detailing that each member of the committee be removed, and then to appoint a new member if necessary.

They attended the EGM. The chairman handed all attendees a copy of the letter from Steindls which letter was dated 22nd November. Mr Dwyer was able to read it during the counting of the votes which took about 20 minutes, and others could have done so since there was ample time “before the commencement of the meeting.” Steindl’s advice reiterated the chairman’s letter. The chair “made reference to Mr Borg Olivier as being the instigator of all motions.” Mr Borg Olivier immediately rose to his feet seeking permission to reply, but permission was not granted. Mr Borg Olivier began to shout at the chairman and demonstrated a lack of courtesy and civility. The body corporate manager intervened and requested both men to calm down. The body corporate manager advised Borg Olivier that he could reply at the end of the meeting.

The chair then formally opened the meeting, and following the vote on motion 1, declared motion 2 out of order. He ruled so following written advice from Steindls. The body corporate manager asked twice if anyone had any queries about the lawyer’s letter and there were no questions. The body corporate manager then told the chairman that he must advise members present how they could overturn his ruling. He did so. The chairman’s ruling that motion 2 was out of order was reversed by a majority vote. “It was then deemed that as the committee was dissolved all other motions could not be considered.” There was uproar from dissenting owners. The chairman declared the meeting adjourned and the chairman, secretary and treasurer of the dissolved committee with the representatives of the body corporate manager left the room. The break-up of the meeting was caused by a number of lot owners “deliberately and wilfully ignoring the legal advice received by the committee from solicitors.”

Mr Dwyer remained in the meeting. The meeting continued and Mr Borg Olivier called for an election of a new committee. Nominations were called for executive and ordinary members and all positions were filled. Mr Borg Olivier was elected as chairman and then chaired the meeting through the rest of the motions. “All voting was counted by a show of hands from the floor. The postal votes provided for the official meeting were not counted (they had been removed by the official committee).” He has not received a copy of the minutes within 21 days of the meeting. He is of the view that the 20 owners in the room do not make up the majority of 49 lot owners, and that the actions of this group of unit owners was “out of order, legally, ethically and morally.” The election was not conducted “ in accordance with the rules” and any persons on this committee has no right pertaining to the governance of the body corporate. He thinks that there should be a new committee made up of persons who have never served on the committee before.

Reginald Warr co-owner of Lot 51 (unit 41), treasurer of the dissolved committee, supports the application. He says that the committee of which he is a part has been under continued attack from Mr Borg Olivier, even with threats of civil action. This has weakened the resolve of the committee members and some members have resigned. Some of the 23 people who signed the petition for the EGM were “lied to or intimidated.” “It was hoped that an opportunity would exist for these matters to be discussed at the meeting but obviously all of these issues fell by the wayside with the adoption of the motion to remove the committee.” He does not see how Mr Borg Olivier could advise owners to ignore the legal advice obtained. He feels that the scheme needs an administrator if this matter cannot be sorted out.

Allan Edwards co-owner of Lot 36 (unit 46) says that he attended the EGM. On arrival he was handed a copy of legal advice dated 22nd November 2007 sent to the body corporate manager which was advice sought “not on our behalf but by themselves and certain members of the committee,” although he expects the body corporate will be charged for that advice. He says that he, as well as other owners, were incensed that the legal opinion was dated 22 days before the meeting. It seemed a ploy to stop the meeting going ahead. The chairman would not allow this item to be debated, and it is true that the owners were angry about making special arrangements to attend the EGM when the Motion was to be ruled out of order because of the legal advice which no-one had seen. He does not believe that scheme needs an administrator but believes that the body corporate has legally appointed a new committee.

Molly Pearmain owner of Lot 35 (unit 45) says that she fully supports the actions of the lot-owners at the EGM in removing the committee from office. The actions taken were in accordance with the majority and she had lost confidence in the former committee. She also supports the election of the new committee. She believes that this application is unnecessary, since there is now a newly elected committee, and there is no general support for administration and it will involve the body corporate in unnecessary and possibly substantial expense.

Cherlyn Daye owner of Lot 44 (unit 34) was present at the EGM. She says that the meeting did not descend into disarray. Voters were handed a 4-page legal opinion from Steindls dated some three weeks earlier. This could have been distributed with the notice of meeting, and it being withheld can only be construed as a deliberate act to entice voting members to dispense with the meeting. She says that after the vote for Motion 2, the chairman ruled this out of order and would not allow voting members to reverse his ruling or any discussion from the floor. The committee including the Applicant then left the meeting. She was surprised to see the body corporate manager leave the meeting as it is employed by the body corporate members as a whole and not the committee. It had a responsibility to stay and continue the meeting. The election of committee members proceeded and she is satisfied that the new committee can get on with the job of running the complex in the interests of the community. There is no need for the expense of an administrator.

Erica Schweiter, Bill Hoyer and Nora Hoyer-Schweiter co-owners of Lot 4 say that they are disappointed that the Applicant cannot accept the will of the majority of the body corporate. It is she who has placed the management of the complex in a state of uncertainty. The committee chose to withhold its legal opinion for three weeks. They say –

“surely we deserve better than to be handed a legal document on the day of the meeting and expected to make an informed decision on its contents in a matter of minutes and after we had handed in our voting papers. This was another example of the committee’s lack of transparency.... which put the owners on the road to the EGM.”

They did not receive a letter from Mr Borg Olivier asking them to reject legal advice. They also say that Mr Borg Olivier did not appoint himself as chairman. Anyone who was at the meeting could see that he was elected. They do not think there is any benefit to having the motions declared void or in the appointment of an administrator.

Deborah Drinan owner of Lot 34 (unit 44) says that she took time off work to attend the EGM. She wanted to know why the legal opinion had not been circulated before the meeting when the body corporate had paid for it, and the majority had handed in their voting papers. She says that when members present tried to follow the legal advice by reversing the chair’s decision to rule a motion out of order, the chairman would not allow the vote. He just got angrier and angrier and left the meeting. She says –
“It was clear to us that they were not coming back.”
The meeting continued with nominations for committee positions being taken from those present. Mr Borg Olivier did not appoint the committee and did not appoint himself as chairman. She is happy with the new committee and says that the scheme does not need an administrator.

Samuel Harris, co-owner of lot 39 (unit 29) is a committee member and attended the EGM. He was amazed by the behaviour of the owners who were present. It became “completely uncontrollable and developed into chaos.” The meeting was adjourned by the chairman. When the secretary, chairman and treasurer left they were followed by cheering, whistles and shouts. He stayed on. Mr Borg Olivier took charge of the meeting “and continued as self-elected chairman” He says –

“He did not circulate and ask the community for nominations for a new committee nor did he request the community to vote for new members for the committee. He on the day took it upon himself to elect a new committee from those present and have himself elected chairman which I found to be extraordinary in all aspects.”
He says that a new committee could have been elected at the AGM in May.

Strata-Jem Pty Ltd, the body corporate manager was invited to make a submission. It says that the extraordinary general meeting was requested by over 25% of lot owners, and convened for 14th December 2007. At a committee meeting on 15th November 2007, the committee resolved to seek legal advice on the motions proposed for the EGM whilst committee member Mr Borg Olivier was out of the room since he had “drafted and lobbied for the motions.”

The body corporate manager and Mr Rothleitner attended Steindls lawyers on 21st November 2007 and subsequently received advice that the motions were flawed “particularly Motion 2.” This advice was forwarded to the committee members with the exception of Mr Borg Olivier and Mr Ereault. Steindls subsequently drafted a letter which was circulated to all owners “under the name of the Chairman” outlining the advice received. A copy of the legal advice was handed to everyone present at the EGM.

The chairman opened the meeting, and the motion to dismiss the committee was then read and the chairman then stated that following legal advice received, he was ruling the motion out of order. “A row immediately developed...” until the meeting was told that it could overturn the chairman’s ruling. The vote was taken and the chairman’s ruling was overturned 17 – 6. Motion 2 was then re-read and voting papers were counted and votes from the floor taken. The vote was 28 – 10.

Mr Borg Olivier called for Mr Rothleitner to step down from the chair as he was no longer the chairman, and the body corporate manager reminded all present that the chairman remained in that position until the meeting was closed. Body corporate members responded angrily to this advice and made allegations concerning the integrity of the body corporate manager.

“By now, the meeting had degenerated to such a state that when the chairman attempted to rule motions 3, 4 and 5 out of order he could not make himself heard over the row.” The body corporate manager could not hear what the chairman was saying and he was sitting next to him. The chairman then declared that the meeting should be adjourned since it was impossible for order to be restored. The chairman and the body corporate representatives and some others left the room.

The following week, the body corporate manager received a letter advising that the meeting “had been re-convened in our absence, “and that a new committee had been elected from the floor. There was no facility for any owners not present at the meeting to vote on this new “committee”. The letter included demands that the body corporate manager should only act on advices from the new committee, and make records available to the new committee including minutes of the EGM up to the point where the boy corporate manager “walked out.”

The legal advice was that the proposed method of electing the new committee was in breach of the legislation and the body corporate manager therefore replied that it was unable to take instruction from any member of the new committee until the matter was finally determined. At no stage were any members of the body corporate denied access to records. Equally, instructions have not been taken from the outgoing committee. The draft minutes of the meeting are “awaiting the meeting being re-convened which we believe should be done by a suitably qualified person acting as an administrator.” Strata-Jem supports the application in as much as it feels it cannot ignore the legal advice received.

The Respondent body corporate made a submission signed by all seven members of the ‘new committee’. It says that it made its own application on 3rd January 2008 without knowledge of the Applicant’s application.

It denies that the five motions for the EGM were submitted by Mr Borg Olivier, but were submitted by 23 owners who called for an extraordinary general meeting with the five motions which were to be considered at that meeting attached to the petition. The papers for the EGM were prepared by the body corporate manager and approved by the committee then existing of which the Applicant was the secretary. The agenda with motions was circulated to all owners with voting papers and contained no statements that any of the motions were defective or unenforceable in any way.

Mr Borg Olivier was not in a position to call off the EGM even if he had wanted to, since it was requested by lot owners. He was also not informed that the committee was considering seeking a legal opinion about the motions to be resolved at the EGM. Steindls letter was addressed to “the Committee” care of the body corporate manager but was not passed to all members of the committee. The legal opinion was only made known to all committee members at the time it was handed out at the EGM by the chairman. The body corporate believes that this was a deliberate act intended to sway the lot owners into abandoning the EGM.

The chairman’s undated and unsigned circular was sent to lot owners shortly after 22nd November 2007 and does not refer to any legal opinion having been obtained, although the body corporate is now aware that the wording of the chairman’s circular letter and Steindl’s advice has “uncanny similarity” in its wording. Mr Borg Olivier did not write to owners telling then to reject the legal advice because that advice was unknown to him until the date of the EGM on 14th December 2007. Mr Borg Olivier’s letter was in reply to the chairman’s circular.

Voters at the meeting voted the existing committee out and the chairman then ruled the motion out of order. He would not allow the reversing of his ruling, and the meeting subsequently resolved to reverse his ruling. 32 members of the body corporate had already cast their votes prior to the meeting and (those who were not members of the committee) had done so without having the opportunity to read the legal opinion. It is “beyond belief” that the Applicant says that the meeting could have been resumed because it was never “closed.” The executive members of the existing committee left the meeting because they could not accept the body corporate’s resolution to reverse the chairman’s ruling. The members present then voted whether or not to continue with the meeting, voting 17 – 0 in favour with 3 abstentions.

The minutes of the EGM were drafted on 15th December 2007 and lack only the actual voting numbers for Motion 2, known to be carried. The voting papers are still in the control of the body corporate manager who left the meeting. After the executive committee and the body corporate manager had left the meeting, nominations for executive positions and ordinary members of the committee were called, Mr Borg Olivier being chosen to chair the remainder of the meeting. Nominations were made by people nominating themselves or being nominated by others from the floor, and then elected by a show of hands. Mr Borg Oliver was elected as chairman. Later in the day he put a notice on the body corporate notice board notifying the body corporate of the election of the new committee.

The letter dated 16th December sent to the body corporate manager was sent by the new committee and not by the new chairman alone. The reply from the body corporate manager did not reject “Mr Borg Olivier’s assertions and instructions” but rejected the instructions from the new committee.

The Applicant and the other members of the then existing executive committee do not accept that they have lost the support of the majority of the lot owners, evidenced by the petition to call the EGM which was attached to the motions including removal of the then existing committee. The current committee believes that it has been elected in good faith and that the outcome of the EGM should stand. There is no necessity for an administrator to be appointed.

The following lot owners made more general submissions-
John and Shirley Dunn, co-owners of Lot 5 support the application and believe that the scheme needs an appointed professional to form a new committee.

Peter Carney, owner of Lot 7, states that he supports the application and that the existing committee carried out its functions very well, and that he has the highest regard for the body corporate manager.

Heather Paterson owner of Lot 1 says she has been very happy with the body corporate manager’s services, and is disappointed with the comments and letters she has received from Mr Borg Olivier attacking the body corporate manager. She proposes to sell her unit as she is fed up with the divisions in the scheme.

Anita Atkinson owner of Lot 2 says that she supports the Applicant and the committee existing at the date of the EGM and has the highest regard for the body corporate manager.

Cheryl Waterson owner of lot 37 (unit 27) notes that the body corporate in general seems to be quite pleased with appointment of the present committee, and she believes they will be a good committee.

Peter and Diane Fowler co-owners of Lot 30 (Unit 25) ask whether the actions of Mr Borg Olivier and a number of other owners he had rallied for support at the EGM were legal. They attended the meeting and were appalled at the behaviour which they likened to “a lynch mob mentality.” They had wanted some discussion about why the existing committee should be removed and a new committee elected.

Deborah Pinard owner of Lot 29 attended the EGM. She says she voted to oust the committee on the advice of Mr Borg Olivier and she now regrets doing so. She says –

”He was very convincing in his reasons and unfortunately I believed that what he was telling me was the truth.”
She went to the meeting believing that Mr Borg Olivier “was aware of the by-laws and what could be done at an EGM and what could be done at an AGM.” She left feeling disappointed and manipulated and was so appalled that she walked out. She also asks if the new committee is legal.

She says that Mr Borg Olivier “suggests that he is unaware” of the fact that the committee sought legal advice but this was “made known to everybody in the minutes of the committee meeting held on Nov 15th which were distributed on Nov 27th.”

Also, he responds to the chairman’s undated circular, which she advises was sent out on 27th November, with “ a disdainful remark” which shows he did know that legal advice was being sought. She says –

“Surely it was self evident that the chairman’s advice circular on “consequences” (circulated on 27th November) was prepared by legal professionals.”

She says that it is “apparent” from the submissions of Pamela Whitcome and Cheryl Waterson that “another false assertion “ made by Mr Borg Olivier has been accepted as being truthful, about a meeting taking place at the chairman’s house on 4th October 2007, when this meeting never took place. She also remarks on examples of “rampant obfuscation” by Mr Borg Olivier in various letters dated respectively 9th January; 13th January; 17th January and 21st January, all of which dates are after the lodging of this application.

This application arises out of an unhappy meeting of the body corporate held on 14th December 2007. Whilst there are strong feelings clearly running in both”camps” in this divided scheme, the material facts of the events of the meeting are not in dispute. There is directly conflicting evidence about whether the chairman Mr Rothleitner did not allow owners to speak, or the owners did not allow Mr Rothleitner to be heard, but these are not material facts in issue.

Equally, the debate about whether or not Mr Borg Olivier knew or did not know about the advice from Steindl’s is irrelevant. The facts are that open letters were written to lot owners by both the chairman Mr Rothleitner (presumably under instruction from the committee) and by Mr Borg Olivier, prior to the EGM. All lot owners had the opportunity of reading those letters, acting on the contents, or ignoring the contents as they chose. It is agreed that the legal advice from Steindl’s, dated 22nd November 2007 was not circulated until the start of the EGM on 14th December 2007. The body corporate manager confirms that committee members Mr Borg Olivier and Mr Ereault were not shown the advice at the time it was received.

I also find that allegations about the behaviour of, or correspondence from, Mr Borg Olivier after the lodging of this application, irrelevant. Nor am I adjudicating on the behaviour of any person prior to the meeting or present at the meeting, or whether or not good manners were breached. This application is only about legal issues of the validity of motions put to a general meeting and voted upon, and whether the scheme is in need of the appointment of an administrator.

The Applicant seeks an order that Motion 2 as submitted to the requested extraordinary general meeting is ruled “out of order.” By this I believe she means that she seeks an adjudicator’s order that Motion 2 is void and that it should not have been voted on at the general meeting or that if it was voted on, that the vote be held invalid.

She also seeks orders that the “remaining motions” by which I believe she means motions 3 – 6 inclusively, are “similarly declared void.”

Finally, the Applicant seeks that an administrator is appointed to the scheme to “restore order.”

To take the last matter first, the Applicant has provided no evidence that an administrator has been approached who is willing to act in this matter, nor has she provided a note of fees for the administrator’s appointment. She has not detailed what task the administrator is to undertake. Section 301 Act provides that the administrator has the powers given to the administrator under the order, and that he or she may take his or her fees from body corporate funds. However, this Office does not appoint unnamed persons to be administrators to “restore order” in the manner of a regulatory or police function. An administrator must perform particular administrative tasks such as hold a meeting, raise a levy, collect debts or obtain quotes from builders, for example.

I am not satisfied that the affairs of this body corporate are in such disarray that there is no-one who could perform the tasks required of a committee, whoever the members of that committee may be. In fact, this scheme appears to have a surfeit of individuals willing to serve on a committee.

The Applicant has not provided sufficient grounds for an administrator to be appointed. In addition, there are a significant number of voting members who made submissions (11) who do not want administration for the scheme as opposed to five voting members who made submissions and who supported the Applicant in that particular, some merely by concurring with the application generally. Other submitters had support for the existing committee (or a completely new committee in Mr Dwyer’s case) and the body corporate management, but did not address the issue of administration.

Turning to the first outcome sought, that Motion 2 be “declared out of order.” The Applicant’s grounds for seeking this outcome appear to be simply that the body corporate was in possession of legal advice dated 22nd November 2007 from Steindl’s that Motion 2, if passed, would leave the body corporate without a committee and that in Steindl’s view the body corporate would therefore be operating contrary to the Act.

Steindl’s advice gave the committee options for dealing with Motion 2, including an option for the chairperson to rule the motion out of order, but thereafter to advise the body corporate that the members present were entitled to reverse that ruling.

Motion 2 was worded thus :-
“Removal of Committee and New Election Called

That the Body Corporate of Coronation Gardens CTS 24610 be removed from office and an election for a new committee be held.”

The chairman Mr Rothleitner ruled this motion out of order after the meeting had commenced and a copy of Steindl’s legal advice had been circulated. The point at which the chairman ruled Motion 2 out of order is of importance.

The Applicant says:
“the Chairman ruled motion 2 “out of order” after receiving details of the vote....”
The submission from the body corporate Respondent concurs that this was the case. Rick Levin says that “..[a]fter the votes for Motion 2 were counted, the Chairman declared the motion “out of order” .... Cherlyn Daye says that “Motion 2 was voted on which was the removal of the body corporate committee. The chairman then proceeded to rule this out of order.....”

However, Mr Dwyer says that “following the vote on Motion 1” the chairman “advised ....that Motion 2 was out of order.” He does not mention a vote taken on Motion 2 which clearly occurred. The body corporate manager says that “the motion..... was read and the chairman ...stated that following the legal advice received, he was ruling the motion Out of Order.” It was not until the motion was passed to overrule the chairman’s ruling that “Motion 2 was ...re-read and votes from the floor and voting papers received were counted....”

The submissions of Mr Dwyer and the body corporate manager are ambiguous as to whether the vote was taken (but not officially counted) prior to the declaration that the motion was out of order. The submissions of the body corporate, Ms Daye, Mr Levin and the Applicant herself are unambiguous that the motion was declared out of order after the motion had been voted upon.

It is understandable that the chairman did not rule the motion out of order until he was in a position to know whether the committee had been voted out, which was the occurrence which Steindl’s had advised was a breach of the Act. Steindl’s advice says: “If Motion [2] is passed..... the Body Corporate would be operating contrary to the Act....”

However, there is no doubt that a motion cannot be ruled out of order after it has been voted upon. Motion 2 contained a dual desire that is, a) to remove the committee from office; and b) to hold an election for a new committee. Anyone voting in favour of this motion was voting for two things to happen. It might be said that the second part is superfluous since if the committee is removed from office, a new committee must be appointed. The motion took a “belt and braces” approach so it was clear that what was intended was not only to remove the committee, but also choose committee members to form a new committee.

Section 47 Standard Module states that the person chairing the meeting must rule the motion out of order if, the motion “if carried” would eg. conflict with the Act. This gives the chairman the opportunity to rule a motion out of order before it is voted upon and with the prospect that it could be carried. Once the vote was taken on Motion 2, it was carried or failed as the votes decided. The opportunity for ruling it out of order had passed.

Furthermore, the chairman can (indeed must) only exercise the power to rule a motion out of order if it would conflict with the Act, or be unenforceable or unlawful if carried (Section 47(1) Standard Module.) I am not of the view that Motion 2 was in contravention of any part of the legislation.

Section 25B Standard Module, an amendment made in 2003, allows the body corporate to appoint a person who is eligible to sit on the committee, at the same general meeting at which a committee member is removed from office. This amendment was made because in cases where the entire committee was removed at a general meeting or where there were no longer enough committee members left to form a quorum, the body corporate was forced to make an application to this Office for the holding of another meeting at which to elect a committee.

“Section 25(2)(f) allows a body corporate in general meeting to resolve to declare a position vacant. There has been uncertainty as to whether the body corporate in general meeting can fill a casual vacancy without the committee first complying with the former section 25(3). [which placed an obligation on the committee to fill a casual vacancy either by appointing a person or by calling a general meeting and has now been replaced by a different section 25(3)]. This issue also arises if at a general meeting, the body corporate resolves that all committee positions be declared vacant. In this instance, the only option that is available under the current provisions is for an application to be made under the dispute resolution provisions of the Act. The amendment addresses this uncertainty by giving the body corporate the right to fill the vacancy in the same general meeting that removed the person from office.”[1]

It is thus within the contemplation of the legislature that the entire committee might be removed from office. There is no prescribed way of doing this other than by ordinary resolution at a general meeting. There is nothing in the legislation that requires that each member of the committee is removed one by one, or that prevents several members at once, or all members of the committee, from being removed.

There will be occasions in many schemes where enough committee members cannot be found, or committee members sell up, or die, or any number of reasons why a scheme might not have an operating committee for a short period of time. The time period provided for the filling of a casual vacancy is one month (Section 25C Standard Module.)

Steindl’s argument that since section 7 Standard Module states that there must be a committee for the body corporate, then to be without a committee for any period of time at all is a breach of the Act, is well outside the intent of the legislation which includes a framework for flexibility and the balancing of the rights of individuals with the responsibility for self-management, as an inherent aspect of community titles schemes. (Section 4 Act). The provision that a scheme must have a committee is a facilitative measure. There is no penalty for not having a committee. If a scheme cannot provide a committee then section 7 Standard Module allows an application to be made to this Office and the legislation allows for an external administrator to be appointed; or the adjudicator to make a just and equitable decision in the circumstances; or the scheme might choose to engage a body corporate manager under a ‘”Division 10” appointment, that is, there is no committee and the body corporate manager make all the decisions for the running and management of the scheme. (Section 37B Standard Module.)

In addition, I am not convinced that this scheme would have been ‘without a committee’ on the passing of Motion 2. Section 25(1) Standard Module states that the term of office of a member of the committee continues until “another person is chosen for the position.” In that case, each member of the existing committee continued in office until new members of the committee were chosen.

Mr Rothleitner says he was unable to bring the meeting to order, and on the advice of the body corporate manager “adjourned the meeting and left.” There is no dispute from any of the submitters that this was the case. However, it does not appear to be the case that the chairman adjourned the meeting until any particular time or place.

The legislation is silent on whether a general meeting can be adjourned or not, apart from the case where a quorum has not been reached in the first 30 minutes of the meeting (Section 48(3) Standard Module.) Looking at ordinary meeting procedure, there is an inherent right for a chairperson to adjourn a meeting. Joske’s Law and Procedure at Meetings in Australia[2] says that it may be necessary to adjourn a meeting and gives as examples, if it is impossible to maintain order, or if the venue is inadequate, or if certain documents are not at hand. It goes on to say that before adjourning for this purpose- -

“the chair should seek to comply with the rules as regards adjournment and endeavour to secure a vote on a motion for adjournment. Where the disorder is serious, it may well be that it is impossible to follow rules relating to adjournment and the chairperson may have to exercise his or her own authority. This authority is quite restricted and must be exercised with a view to maximising the rights of all members of the organisation to exercise their rights to speak and vote on the business of the organisation.”[3]

“There are authorities which suggest that the power of the chair is to adjourn only for the minimum period reasonably necessary for the restoration of order to enable the business of the meeting to be carried on. [4] It has been held that an adjournment to an indefinite future is not a proper exercise of the power of the chair to preserve order and so would be void.”

I do not find that the meeting of 14th December 2007 is still adjourned to some indefinite future. The chairman did not give a time when the adjournment would end, nor when he would reconvene the meeting. Most of the attendees at the meeting did not adjourn or break from the meeting. The conclusion is that the chairman, the secretary and others left a properly convened meeting and did not return to it.

In the absence of the chairperson, any person elected by the members at the meeting may chair the meeting. (Section 46 Standard Module.) Mr Borg Olivier chaired the meeting after Mr Rothleitner had left the room. He then took nominations for election of the committee and votes were cast by those attending the meeting to choose a new committee.

Under section 25B Standard Module, any eligible person may be “appointed” to the committee at the general meeting to fill a vacancy. There is no specified procedure for making the appointments at the general meeting held under section 25B Standard Module but there is no need to hold an election (Section 25B(2) Standard Module). I am aware from File 0007 – 2008 that Mr Borg Olivier had written to lot owners on 20th November 2007 encouraging them to attend the EGM and saying that if Motion 2 was successful then votes for a new committee would be taken from the floor.

This letter was not authorised by the existing committee, nor apparently by the lot owners requesting the EGM for whom Mr Borg Olivier appears to have acted as a spokesman, but in my view there is nothing wrong with the proposal made in this letter. It would be the most democratic way to proceed since nominations had not been sought and there is no legal requirement to seek nominations for a ‘section 25B’ appointment. Furthermore, there was no objection to this method of appointing new members from any quarter prior to or at the EGM.

The members so appointed to the committee under a ‘section 25B’ appointment are only holding over until the annual general meeting, when nominations must be sought in advance, and an election held.

I find that Motion 2 was a lawful motion. I find that the legislation envisages that the entire committee can be removed from office and that there is no reason why this might be achieved only by individual members being removed and the vacancy for each individual filled. It might be more manageable that way, and it might encourage more people to vote for the motion if that voter did not want to lose the entire committee for example, but it is not unlawful, unenforceable or contrary to the Act.

The chairperson therefore had no power to rule the motion out of order. In any event, the attendees at the EGM overturned his ruling on this point. Motion 2 was carried 28 -10 and is a valid motion of the body corporate. The existing committee was removed from office by Motion 2, the members’ removal becoming operative when the new members were chosen.

The Applicant also seeks that Motions 3 – 6 are held invalid. She does not give a reason for this other than that the legal opinion obtained from Steindl’s says that Motion 3 is contrary to the Act, and that Motions 4 and 5 should be worded in an alternative way.

Motion 3 was for the closure of the bank account with Macquarie Bank and opening an account at another bank to be decided by the committee. Steindl’s advice was that since the body corporate must maintain a bank account, to close one without opening another would contravene the legislation. Certainly the body corporate must maintain a bank account, so that the account at Macquarie Bank should not be closed before the committee has decided on another bank and opened an account there. But I do not find that the motion proposed to leave the body corporate without any banking facilities. It sought the view of the body corporate on the cessation of services by Macquarie Bank. When that should take place if the body corporate approved that motion is an administrative decision for the committee. Section 151(2) Act states that the account must be opened with the consent and in the name of the body corporate (that is, the committee acting as the body corporate by virtue of section 100(1) Act which states that “a decision of the committee is a decision of the body corporate” ).

Motion 4 was that all payments made by the body corporate be approved by an “approving officer” to be appointed by the committee. This is a matter for the body corporate and there is nothing in the legislation about who should approve payments. Many schemes ask the body corporate manager to run any payments past the treasurer or secretary for approval first. This is a matter of administration for the committee and need not even be put to the body corporate at a general meeting, although there is no reason why it should not be.

Motion 5 was that the new bank account be operated under dual signatures one of which was to be a committee member. Again, this is a matter for committee administration. Section 151 Act provides that where a body corporate manager’s contract of engagement requires or authorises the body corporate manager to operate the account for the body corporate, the account must provide for it to be operated by the body corporate manager and the authorised members acting jointly. The “authorised” members are at least 2 members of the committee who are authorised to operate the account. (Section 151(3) Act.)

Motion 6 was that no attempt be made by the committee to remove certain trees without first obtaining a professional opinion.

Steindl’s did not comment on motion 6, and the Applicant advances no reason why motion 6 should be held invalid, other than in reliance that the meeting at which it was proposed, was or became, in itself unlawful. In the Applicant’s reasoning the meeting of 14th December 2007 has never been closed, so there would appear to be no other reason why the remaining motions could not be voted upon.

I have found that the EGM was properly convened and that it continued under the chairmanship of Mr Borg Olivier after Mr Rothleitner left the room. The votes for Motions 3 – 6 were taken from the floor and recorded by those remaining at the meeting. My concern for motions 3 – 6 is that the votes recorded do not include the postal/written votes received by the body corporate manager prior to or at the meeting. It is known that 38 people cast votes on Motion 1 to confirm the minutes of the last AGM, and only 20 people had their votes counted at the continuation of the meeting.

Motions 3 – 6 are valid motions in their wording but the outcome of those motions is not yet known. All (properly made) written votes cast prior to or at the meeting are valid votes on those motions. The body corporate manager has the written votes in its possession. Since the body corporate manager is engaged by the body corporate and the body corporate is the Respondent in this application, I shall order that those votes are now counted in the vote on motions 3, 4, 5 and 6, so that the minutes for the EGM may be concluded, and the body corporate may act upon those motions if they are carried.

The votes for Motion 2, given by the body corporate manager as 28 – 10 in favour, should be similarly recorded.

[1] Body Corporate and Community Management Legislation Amendment Regulation (No.1) 2003 Explanatory Notes for SL 2003 No. 263 p.90
[2] 9th edition Ed. Eilas S Magner -Lawbook Co.
[3] Joske ibid p.40
[4] McDonald –v- Thorley [1976] Qd R 208
[5] Joske supra p.41

Number of Scheme:	24610
Name of Scheme:	Coronaton Gardens
Address of Scheme:	37 Paradise Springs Avenue ROBINA QLD 4226

Queensland Body Corporate and Community Management Commissioner - Adjudicators Orders

Coronaton Gardens [2008] QBCCMCmr 75 (4 March 2008)