Eleonora Court [2008] QBCCMCmr 79 (6 March 2008)

Number of Scheme:	10589
Name of Scheme:	Eleonora Court
Address of Scheme:	53 Annie Street NEW FARM QLD 4005

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

I hereby order that the application for an interim order that the annual general meeting to be held on 11th March 2008 “ be stopped”, is dismissed.

I further order that should Motion 8 and/or Motion 12 on the agenda for the annual general meeting be carried at that meeting, that the body corporate or its committee will not take action on those motions until a further interim order is issued, or when the application is finally determined or discontinued, or upon the expiry of 12 months from the date of this order, whichever is the earliest.

This is an application dated 22nd February 2008 by Sean Ryan (the Applicant) owner of Lot 2 in the scheme against the body corporate for the scheme (the body corporate) for an order that Motion 8 on the agenda for an annual general meeting to be held on 11th March 2008 is dismissed; and to stop the body corporate spending money without proper approval of the body corporate in respect of Motion 12 at the same annual general meeting.

The Applicant also seeks an interim order that the forthcoming annual general meeting ‘be stopped’.

“Eleanora Court” Community Titles Scheme 10589 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 8 lots in the scheme created under a Building Unit Plan of 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)).

Section 247(3) of the Act allows the Commissioner to refer an application to an adjudicator for consideration for an interim order even though proper notice of the application has not been given to the body corporate or other affected persons, and despite the fact that parties to the application have not been given an opportunity to make a submission about the matters in dispute. It seems to me that the Act allows this process because applications for interim orders often relate to emergency or otherwise urgent circumstances, where it is simply impractical or impossible to allow a period for submissions prior to the consideration of the application for interim orders. It is also relevant that generally the purpose of an interim order is simply to maintain the “status quo” of a situation, and not finally to resolve the matters in dispute.

Section 279(1) of the Act allows an adjudicator to issue an interim order in response to an application “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”. Read together with section 247(3), section 279(1) appears to allow an adjudicator to issue an interim order without any reference to other parties to the dispute.

Notwithstanding that the Act allows for interim orders to be issued without reference to other parties, I am of the view that when possible, it is far preferable and more consistent with the principles of natural justice, to allow affected persons to make a submission about an application (even if the time allowed for submissions is necessarily brief) prior to the determination of an application for an interim order. I therefore sought submissions on the interim application alone from the body corporate committee.

The Applicant says that there is a background of the committee over-spending. The forthcoming annual general meeting (AGM) to be held on 11th March 2008 has on the agenda two motions which the Applicant does not think are properly made.

Motion 12 ( to be voted by special resolution) is that “the back fence side fence between 43 and 53 Annie Street be replaced by a new wooden fence.” The motion states “quote included.” The quotation from Superior Fences and Gates is for a total of $8,315 exclusive of GST. The Applicant says that in accordance with “section 102(2) Regulation Module”, for “major spending” two quotes should have been provided to the body corporate at a general meeting and not just the one.

The other motion to which the Applicant objects is Motion 8. Motion 8 is proposed by the committee and seeks the “reimbursement of $2,446 for the repair of locks and intercom.” from the Applicant in the appropriate jurisdiction. The Applicant says that this motion seeks permission to commence a ‘legal proceeding without substantiated evidence” and is contrary to the Act. He says to commence a legal proceeding the body corporate needs a special resolution. He does not give a section of the legislation on which he relies for this belief. He also fears that the body corporate committee will spend money on lawyers and legal proceedings without the authorisation of the body corporate.

He details the reasons why he had to install new locks for his entrance door last year.

The Secretary for the body corporate, Maureen Anderson also provides a detailed background to the changing of the locks by the Applicant. She says that the Applicant desires to have Motion 8 dismissed as a final outcome, but that it is not the view of the committee that “a minor debt claim will incur such costs as to warrant a special resolution.”

She says that the quotation for the fence at Motion 12 has been obtained merely as a starting point for discussion with the neighbours. The body corporate has budgeted $2,500 for its contribution to the fence but contributions will also be sought from neighbouring landowners. Two quotations have not yet been obtained since the body corporate has “no intention of spending that amount and only wanted some idea to give to the neighbours.” The body corporate does not have $8,315 to spend on a fence.

In this matter I am considering only the Applicant’s request for an interim order that the AGM be “stopped” whereby I am taking him to mean that the AGM is postponed whilst the validity of Motions 8 and 12 are determined by this Office.

I am not advised by the Secretary when the body corporate’s financial year ends, but it is a requirement of the legislation that an annual general meeting is held within three months of the end of the financial year. (Section 60 Standard Module.) The preparations for the AGM also require that nominations for committee are sought at least 3 weeks before but no earlier than 6 weeks before, the end of the scheme’s financial year. (Section 13(4) Standard Module). There is therefore a timetable to be adhered to for the preparation and holding of an annual general meeting. Notices for the meeting and voting papers also have been sent to all owners within 21 days of the meeting.

All this detailed administration at some cost to the body corporate, means that postponing a body corporate meeting is not a step to be taken lightly. Some owners may also have already cast their votes by written voting paper.

I accept that there is prime facie evidence of a dispute in this matter, and that the two matters for determination will need further investigation and consideration as to their respective legal impacts. Meanwhile, I will not hold up the AGM, but will make an order that if carried, Motions 8 and 12 will not be acted upon by the committee until such time as the final order in this application is made.

Submissions will now be invited from all lot owners on the final outcomes sought in the usual way. I am willing to undertake that following the close of submissions and any reply by the Applicant, that this matter will be expedited.

Queensland Body Corporate and Community Management Commissioner - Adjudicators Orders

Eleonora Court [2008] QBCCMCmr 79 (6 March 2008)