Coronaton Gardens [2008] QBCCMCmr 82 (10 March 2008)

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

I hereby order as follows-
1. that the body corporate manager grants to the committee which was appointed at an extraordinary general meeting on 14th December 2007 access to body corporate records; and
2. that the body corporate manager shall be directed by and take instructions from the committee appointed at an extraordinary general meeting held on 14th December 2007.

I further order that the application for an order that “that the body corporate manager reverses costs in the sum of $1,235.40 charged to the body corporate by the body corporate manager contrary to a resolution of the body corporate at an extraordinary general meeting held on 9th August 2007” is dismissed to be dealt with in a court or tribunal of competent jurisdiction in accordance with section 270(1)(b) of the Body Corporate and Community Management Act 1997.

This is an application dated 3rd January 2008 but lodged on 7th January 2008 by the body corporate (the body corporate) for Coronation Gardens (recorded in the Land Title Registry as “Coronaton Gardens”) CTS 24610 against Strata-Jem Pty Ltd, (the body corporate manager) for an order as follows –

On 18th January 2008, I made an interim order in this matter, as requested by the body corporate, so that the body corporate 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 another dispute lodged in respect of this scheme, that is an application lodged by Rosemary Smith (Ms Smith) on 24th December 2007 against the body corporate being application 1024 – 2007. Ms Smith’s application was for Motions 2 – 6 put to an extraordinary general meeting held on 14th December 2007 to be held out of order or void, and for an administrator to be appointed to the scheme.

The body corporate in this application said in submissions to file 1024-2007 that it was unaware when lodging this application that Ms Smith had already made an application for dispute resolution.

The final order in this application has been expedited to catch up with Ms Smith’s application. On 4th March 2008, I made a final order in Ms Smith’s application, finding that all motions put to an extraordinary general meeting on 14th December 2007 were valid motions and dismissing her application for an administrator to be appointed.

“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)).

Where a dispute may be resolved under the relevant chapter of the Act, the Act makes it clear that the dispute resolution provisions in the Act are to the exclusion of other dispute resolution processes including the jurisdiction of the courts (Sections 228 and 229 Act). However, this does not mean that an adjudicator will determine all disputes between a body corporate and its body corporate manager. Even if a dispute is referred to a departmental adjudicator by the Commissioner, that adjudicator may make an order dismissing the application if the adjudicator is satisfied the dispute should be dealt with in a court or tribunal of competent jurisdiction (Section 270(1)(b) Act).

An adjudicator has a broad discretion to make an order that is "just and equitable" to resolve a dispute about a claimed contravention of the Act or the exercise of rights or powers, or the performance of duties, under the Act (Section 276 (1) Act as quoted above.) The examples of orders in Schedule 5 of the Act do not specifically refer to the making of an order requiring a body corporate manager to reimburse the body corporate for any body corporate funds improperly spent. However, I consider the general power to make an order that is just and
equitable to resolve a dispute, includes a power to make orders requiring reimbursement of funds
improperly spent by a body corporate manager.

SUBMISSIONS

The application is brought by and on behalf of the body corporate. The membership of the body corporate committee is disputed by some members of the body corporate and the body corporate manager following a motion put to a requested extraordinary general meeting on 14th December 2007 (the EGM).

The background to the dispute is that 23 lot owners requested the EGM. At that meeting Motion 2 was that the committee be removed from office and an election for a new committee be held. At the meeting, the chairman Mr Rothleitner, acting on legal advice, declared that Motion 2 was out of order, after the vote on it was taken. The meeting was disrupted by angry lot owners. The lot owners took a vote to reverse the chairman’s ruling, and the chairman adjourned the meeting and left the room with the executive committee and the representatives of the body corporate. The remaining attendees of the meeting then appointed a ‘new’ committee.

The legal advice has been referred to in matter 1024 – 2007. Steindl’s Lawyers concluded that if Motion 2 was passed and the entire committee removed from office, the body corporate would be operating contrary to the Act.

The ‘new’ committee subsequently wrote to the body corporate manager on 16th December 2007 requiring that it cooperated with the new committee. The body corporate manager replied on 19th December 2007 saying that since the validity of the committee is in dispute, that it is not in a position to take directions from the new committee. It suggested the matter be sent to adjudication.

The ‘new ’committee does not have details of the written votes from the meeting of 14th December 2007, which are in the possession of the body corporate manager, and has only been able to prepare draft minutes of that meeting. It has not yet circulated the minutes which is a requirement of the legislation.

In matter 1024-2007 I determined that the ‘new’ committee was validly appointed at the EGM.

On the third outcome sought, the Applicant explains that the body corporate manager debited the body corporate bank account $1,235.40 for holding an extraordinary general meeting pursuant to an adjudicator’s order and that this charge was without the consent of the body corporate. Janice McCarthy (Ms McCarthy), of the body corporate manager, has been the sole authorised signatory at the bank.

“The body corporate took the view that as the EGM was ordered by the Adjudicator because Strata-Jem had charged fees without the authorisation of the body corporate, the costs associated with the EGM should be borne by Strata-Jem.”

The extraordinary general meeting was held on 9th August 2007 and Motion 12 was carried 20 – 8 in favour. Motion 12 stated as follows -

“COSTS OF EXTRAORDINARY GENERAL MEETING – COSTS TO BE MET BY BODY CORPORATE MANAGER

That the committee takes the necessary steps to recover from Strata-Jem Ltd all costs incurred by the Body Corporate associated with the Extraordinary General Meeting, such Meeting having been ordered by the Adjudicator as a direct result of the Body Corporate Manager having without proper authority charged the Body Corporate with fees which were not approved by the Body Corporate in general meeting”

On 28th August 2007, the body corporate manager wrote to the body corporate and stated that it had charged the body corporate $1,235.40 for the costs of holding the extraordinary general meeting. On 15th September 2007, the committee responded that it was disappointed with the body corporate manager’s failure to comply with a motion of the body corporate and it continued to hold the body corporate manager responsible for the cost of the meeting. It asked the body corporate manger to reverse the charge and credit the body corporate account. The body corporate manager replied on 27th September 2007 but as at the date of lodging the application, the body corporate committee did not have access to a copy of that letter.

On 2nd October 2007, at a meeting of the committee, the body corporate manager was told that it should have submitted the invoice for $1,235.40 to the committee for approval, and not just taken the funds out of the body corporate bank account, and charged it to lot owners as “additional services”. The committee told the body corporate manager that the correct procedure would have been that the committee would then have refused to authorise the payment since this was the wish of the body corporate, and the body corporate manager would then have had recourse through the courts. Mr Austin Eames of the body corporate manager said that he was not authorised to refund the money and that a credit would not be issued. The minutes of the committee meeting record that the relationship between the body corporate and the body corporate manager had broken down. It was agreed that “Strata-Jem will continue to operate as the body corporate manager until such time as alternate (sic) arrangements can be made for the Body Corporate Management.”

On 15th November 2007, at a committee meeting where this issue was being debated with the body corporate manager, Ms McCarthy said that she took the money out of the body corporate bank account because she knew that she would have difficulty getting paid otherwise. She said that she was willing to negotiate with the committee.

The EGM of 9th August 2007 was ordered by an adjudicator and was for the body corporate to consider certain motions for the reimbursement by the body corporate manager to the body corporate of specific fees debited to the body corporate. On 6th August 2007 the body corporate manager had refunded these specific fees. The notice for the EGM went out in 17th July 2007. Owners were advised of the refund at the EGM on 9th August 2007, and those motions relating to the reimbursements were ruled “ out of order” since the money had by then been paid back.

The body corporate says that the body corporate manager claims that the costs of holding the EGM relate only to the “additional motions” submitted by owners “in particular those put by George Borg Olivier”.

In respect of this outcome sought, Strata-Jem made a detailed submission at the interim stage, and made a further submission when invited to do so. On 14th January 2008 , Ms McCarthy said she believes that the cost of the EGM of 9th August 2007 charged by Strata-Jem is under investigation by the DPP according to Mr Borg Olivier. She thinks this is a complex issue and outside the jurisdiction of an adjudicator. Letters relating to the EGM costs and the committee have not been fully disclosed to this Office, and extracts from the minutes provided by the body corporate do not provide the full picture. She refers to a history of disputes within the scheme, and allegations of secret meetings and wrong advice given.

On 1st February, Ms McCarthy again addressed this point. The body corporate manager believes that this is a matter about the performance of a contract and therefore subject to specialist adjudication. She advises that Strata-Jem is contracted to the body corporate until 25th May 2008. The “agreed services” in the contract, a copy of which was provided, include attending 4 committee meetings of 2 hours’ duration each per year, and convening and attending an annual general meeting of 2 hours’ duration. Other services are shown as “additional services” at “additional fees” stated in the contract.

Section 6 of the agreement says that the body corporate must pay for additional services “within 14 days of an account being rendered”, as well as pay disbursements. She says that Strata-Jem is within its rights to charge for holding and convening the EGM on 9th August 2007, and that the parties are contractually bound, so that submissions that the payment was unauthorised by the committee have no merit. The body corporate was required to convene meeting by an adjudicator’s order, and Strata-Jem did not charge for that part of the meeting which was “ordered to be re-considered”, only for the additional material. There were other motions submitted to the EGM as well, and even though the body corporate says that these motions could have been tabled at the next annual general meeting, “various members of the body corporate requested other matters to be put on the agenda for the EGM”.

Motion 12 proposed the costs of the EGM be borne by body corporate manager, and this motion was passed. She says that the body corporate does not appear to understand the nature and effect of a contractual relationship. “No body corporate manager ......can arbitrarily be bound by a decision reached at a general meeting of the Body Corporate.”

Ms McCarthy provides a breakdown of fees showing that Strata-Jem “discounted” the amount charged to the body corporate by approximately 30%. She says that the cost to the body corporate “without all the additional motions” would have been $450.36. Further, that the body corporate was “intentionally or ....unintentionally endeavouring to take advantage of the body corporate manager by placing.... matters on the agenda” so that the body corporate manager would incur costs. She says that if the EGM of 9th August 2007 had dealt with issues solely required by the adjudicator, the EGM would not have lasted more than 10 minutes, and have “minimal documentation.” The fee charged relates mainly to extra time, and there were motions duplicated on the agenda.

She refers to the letter dated 27th September 2007 in reply to the letter dated 15th September 2007 from the body corporate saying that “[a]s you well know, Strata-Jem Pty Ltd refunded the amounts which were disputed in the Adjudicator’s Order 0166-2007 well before the Extraordinary General Meeting was convened.”

The body corporate manager also addressed the question of legality of the current committee, and says that it supports Steindl’s legal advice and the actions of the chairman at the requested EGM held on 14th December 2007. It believes that administration of this scheme is necessary thereby supporting Ms Smith’s application file 1024-1007, on which the body corporate manager also made submissions.

The body corporate manager denies that any member of the committee or the body corporate has been refused access to records, but does not recognise Mr Borg-Olivier as chairperson. It does not believe that the current committee was properly elected or appointed. It indicates that it wishes to end its agreement with the body corporate, and foreshadows legal proceedings between it and Mr Borg-Olivier.

Following the making of the interim order, submissions were invited from all lot owners. Several lot owners also made submissions in matter 1024-2007

Cheryl Waterson, owner of Lot 37 (unit 27) provides the same submission in both files. She says that the body corporate as a whole seems to be “quite pleased” with the appointment of the present committee, in whom she has faith.

Reginald Warr, co-owner of Lot 51 says that he totally opposes the application. He does not address the outcomes sought in this application but wishes to correct evidence put forward by the body corporate relating to the background to this application.

Conor and Marlene Dwyer, co-owners of Villa 6, say that this application is totally unfounded. They do not recognise that the application is made by the body corporate since the applicants signing the application are not the properly elected committee.

John and Shirley Dunn, co-owners of Lot 5 just want harmony restored. They are supportive of management by the body corporate manager, and do not believe the current committee is legal.

The body corporate exercised its right of Reply. It outlines that there are divided loyalties in the scheme because some lot owners have been more friendly or obtained benefits from the work done by the “old” committee. It refers to the adjudicator’s decision in 0166-2007 as support for the concerns of the current committee for the former committee and the body corporate manager.

On the question of costs, the body corporate repeats and endorses the facts and views stated in its application. It says that if the body corporate manager says the fee would have been $450.36 without the additional material, it wonders how the fee of $1,235.40 can be a “discounted “ figure. It notes that the letter dated 28th August 2007 from the body corporate manager and stating its fee for the meeting does not refer to a discounted amount. The letter says: “ we have charged a fee of $1,235.40....... as per the Management Agreement...”

There was also no “original invoice” presented to the body corporate, even though this is referred to in the body corporate manager’s submission. She says that Item I of the agreement authorises her to process and pay accounts. If that is right it exists only for the “agreed services”, such as the standard monthly fee. The committee does not dispute that an EGM is “an additional service” but it never received a rendered account for the additional service in accordance with the contract. The body corporate manager could have submitted its account, and the committee could have refused to pay it in the 14 days, and then the body corporate manager could have taken the body corporate to a civil court.

The committee adds that it will not stand in the way of the body corporate manager’s voluntary early termination, after receiving a satisfactory audit of the body corporate accounts for the current financial year. It says that the annual general meeting is usually held in last week of May but it could be brought forward to mid-April if the accounts were produced sooner. The committee has written to the body corporate manager suggesting an early termination of the contract, and asking it to have the books available for audit by 10th March.

In the light of the finding in application 1024 – 2007 it is not necessary to recite the details of the EGM of 14th December 2007 or reasons why certain lot owners do not feel that the current committee was properly appointed. I have deliberately referred only briefly to submissions where the arguments about the validity of the committee have been set out.

However, none of the “lot owner” submitters made any mention of the charge of $1,235.40 made by the body corporate manager for the meeting held on 9th August 2007 following the Order 0166 -2007, which is the third outcome sought in this matter. Despite the fact that it was the desire of the former committee to seek reimbursement of the sum, and the current committee is attempting to carry out the resolution of the general meeting of 9th August 2007 when the former committee was in office, neither Mr Warr, nor Mr Dwyer, nor Ms Smith had anything to say about it.

Since I have determined the status of the committee for this scheme in matter file number 1024 – 2007, it follows that whilst the first two outcomes remain pertinent, they are not issues which require much further debate.

There is little evidence that the body corporate manager has withheld records, although there is an ambiguous statement by the body corporate manager that it has not withheld records from “ the committee or the body corporate.” Certainly the voting papers from the meeting of 14th December 2007 had not prior to this application been made available to the “ new “ committee. The committee did not have a copy of the letter dated 27th September 2007 from the body corporate manager about the disputed fee.

In the interim order made on 18th January 2008, I stated that there was no reason why any members of the body corporate, committee members or otherwise, should not have access to body corporate records, which includes the tally of votes and actual voting papers if requested. Section 205 Act enables any “interested person” to have access to body corporate records and makes it a quasi-criminal offence with a penalty available in the Magistrates Court if the holder of the record does not make it available after written notice of 7 days and the payment of the fee prescribed in the legislation at Section 151 Standard Module.

The body corporate manager should now provide to the committee as appointed at the meeting of 14th December 2007 any information in its possession or control in accordance with the legislation.

The second outcome sought is that the body corporate manager co-operates with the committee in the lawful execution of its responsibilities to the body corporate. I find that this is very close to asking for an order that the body corporate manager adheres to its contract, which is an order which would be meaningless, since the contract is the instrument by which the body corporate manager is already bound to the body corporate. In addition, such an order would be unenforceable in this jurisdiction. If the body corporate manager wishes to breach its contract it is a matter for the body corporate manager, and the body corporate has a remedy in the Commercial and Consumer Tribunal ( since 1st July 2007) or by agreement with the body corporate manager through “specialist adjudication”.

However, there is in evidence a letter dated 19th December 2007 from the body corporate manager to Mr Borg Olivier saying that it is “not in a position to take directions from any member of the Body Corporate” and proposing that the dispute be referred to adjudication.

Section 100(3) Act states that despite anything in the body corporate manager’s contract a decision of the body corporate manager is void to the extent that it is inconsistent with a decision of the body corporate’s committee. There is therefore a legal duty on the body corporate manager to act in accordance with decisions made by the committee, apart from any contractual duty. The Code of Conduct for Body Corporate Managers at Schedule 2 Act also requires that the body corporate manager acts in the body corporate’s best interests, honestly, fairly and professionally.

There is no point in making an order that a person must comply with the law. Every person must comply with the law, and if a person does not, then an aggrieved party has a remedy. I can only make an order that the body corporate manager should be directed by the current committee, which is the lawfully appointed committee of the body corporate.

The issue which is completely separate from the matters arising in file 1024-2007 is whether or not the body corporate manager should reimburse to the body corporate the sum of $1,235.40 charged to the body corporate for holding a general meeting on 9th August 2007 ( the meeting). This is the third outcome sought.

The body corporate does not argue that this sum is excessive (although in the Reply from the committee, it clearly believes it to be so) or wrongly calculated, simply that the body corporate should not have to pay for the general meeting at all. It says it should not have to do so for two reasons as follows –

In addition, the body corporate says that the sum removed from the body corporate account was unauthorised by the committee.

The body corporate manager says that it is clearly a term of its contract with the body corporate that it can charge for convening meetings and distributing paperwork in connection with meetings. It argues that the construction of its performance under the contract is a matter for specialist adjudication being a ‘complex dispute’ as defined in the legislation. It also implies that there was no need for the meeting at all since it had repaid the sums in dispute “ well before the EGM was convened.” I do not find that this was the case since the meeting was convened on 17th July 2007 and the bank transfer was not credited to the body corporate on until 6th August 2007, three days before the meeting.

An adjudicator has jurisdiction as set out above (see Jurisdiction) to decide whether a management contract exists or not and whether a body corporate manager has acted in a way unauthorised by the body corporate, including making payments for services from body corporate funds.[1]

This application does not require me to peruse the contract of engagement to see if the amount charged is fair and accurate in accordance with the terms of the contract. I am required to determine if the actions of the body corporate manager in taking funds from the body corporate bank account are in contravention of the legislation and/or the Code of Conduct for Body Corporate Managers or in breach of, or excess of, the exercise of rights and powers under the Act.

The body corporate’s submission is that there should have been no charge because it was the ‘fault’ of the body corporate manager which occasioned the necessity for the general meeting in the first place. This is also the principle behind Motion 12 : That since it was the body corporate manager’s ‘fault’ that the body corporate had been put in the position where it was required to hold a meeting, then the body corporate should not have to pay for that meeting.

This is akin to the victim of wrongdoing claiming costs. In any legal proceedings, a victim may have to seek legal advice and pay legal costs in order to get a case to court. That case may or may not be successful or the parties may decide to settle the matter out of court. Unless the court, as a lawful “determinator” sanctioned by the state, orders full indemnity costs, or the parties settle by agreement for full indemnity costs, then the victim will still have to settle his bill with his lawyer. The lawyer’s bill does not automatically get passed over to, and paid by, the wrongdoer because he is the wrongdoer.

Here, there was no determination by an adjudicator that the body corporate manager should not charge for the meeting required by Order 0166-2007; nor had the body corporate made an agreement with the body corporate manager not to charge for the meeting.

The stance taken by the body corporate also assumes that the body corporate manager was a wrongdoer which owed something - at least a free meeting - to the body corporate. However, the adjudicator’s reasons for decision in matter 0166 -2008 found that the committee had wrongly authorised retrospective payments to the body corporate manager for services in excess of those stated in the body corporate manager’s contract. The body corporate therefore is not blameless in contributing to the state of affairs where the body corporate at a general meeting was required to approve, or not, the payments to the body corporate manager for those services.

I find the decision that the body corporate manager should not charge at all for the associated costs of the meeting has been arbitrarily made by the body corporate, and is not justifiable. The body corporate manager was entitled to a fee for convening and holding the meeting, even if that fee might have been negotiated with the body corporate manager in the circumstances. I note that Ms McCarthy has offered to negotiate the fee if the body corporate feels that the fee was excessive. (See minutes of the committee meeting held on 15th November 2007.)

Turning next to the manner in which the body corporate manager took its fee. The body corporate manager took its fee for holding the meeting from the body corporate account to which it has access by virtue of its contract with the body corporate. It has not been argued in submissions that the body corporate manager has no power to withdraw monies from the account for services provided by it. It is also not argued that the body corporate manager is required to seek authorisation from the body corporate or its committee prior to administering the administrative and sinking funds eg. in paying bills to service providers. Section 101A of the Standard Module requires that where the body corporate manager administers the sinking and administrative fund, the body corporate manager must prepare reconciliation statements each month showing amounts paid into and from the account and invoices and other documents. In some schemes, the body corporate manager runs every payment past the chairperson or treasurer such as the committee desires, but there is no legislative requirement for a body corporate manager to seek authorisation of the body corporate for every payment made. “Making payments” from the body corporate bank account, is one of the things which a body corporate manager is engaged to do.

The body corporate says that since this was an exceptional expense, that an invoice should have been presented to the committee for authorisation. The contract also requires that an account for fees is rendered for “additional services” by the body corporate manager. Particularly in the circumstances where the body corporate manager (and the committee) have been previously accused of making unauthorised payments and been found wanting, it might have been wise to discuss the account with the committee prior to withdrawing the funds. However, I find that the method by which the body corporate manager was paid its fee impinges directly on the construction of the contract.

Motion 12 at the general meeting proposed that the committee takes “the necessary steps” to recover the costs of the general meeting from Strata-Jem. If the body corporate now wishes to say that the body corporate manager was in breach of its contract in removing its fee for the meeting from the body corporate bank account, then the “necessary steps” may lead the body corporate to the Commercial and Consumer Tribunal or to specialist adjudication.

Further, if the allegation is that the body corporate manager acted negligently or dishonestly in removing the sum from the account, this matter is better dealt with by a consideration of the common law in the civil (and/ or criminal) courts. Ms McCarthy indicated that the matter was being investigated by the DPP.

I will therefore order that any claims to the effect that the body corporate manager was in breach of its contract; or was negligent or dishonest; and claims that are otherwise not about an exercise of powers or alleged contraventions under the Act, are to be dismissed on the basis that they are appropriate for consideration by a court or tribunal of competent jurisdiction in accordance with
section 270(1)(b) Act.

It is entirely a matter for the body corporate if it wishes to pursue this avenue of relief.

Other matters
In the interim order made on 18th January 2008, I invited the parties to this application to advise me of any claims for payment which arose between the making of the interim order and this final determination, since the body corporate manager was unwilling to accept instructions from the ‘new’ committee. There has been some correspondence about the day to day running of the scheme, and payments have been authorised with the consent of the committee, and been met by the body corporate manager.

The committee also authorised the payment to the body corporate manager of the payment of its monthly flat rate fee for February.

The committee has asked the body corporate manager to circulate minutes of a committee meeting of 3rd January 2008, and the body corporate manager has contacted this office seeking instructions The email sent on 3rd March 2008 states that the body corporate manager has “ an issue” with circulating the minutes since it is not of the view that the ‘new’ committee was validly appointed. In addition, the body corporate manager requests that if it circulates the minutes as requested that it may charge its fees for so doing in accordance with its contract.

Understandably, as at 3rd March 2008, the body corporate manager was anxious to know upon whose instructions it should act, especially since the annual general meeting is to be convened shortly. At that annual general meeting, the body corporate manager is not seeking to renew its agreement with the body corporate.

The order made in matter 1024-2007 was sent from this Office on 4th March, and the body corporate manager should now be in a position to take instructions from the ‘new’ committee as also directed by this order. On 5th March 2008, it also sought the authorisation for payment of $742.90 for administrative fees occasioned by the circulation of paperwork in these two applications 1024-2007 and 0007-2008.

In its Reply in this matter, the body corporate indicated that it would be willing to release the body corporate manager from its contract prior to the expiry of the contract on 25th May 2008. It suggested that a ‘possible way forward’ was to obtain the services of an external auditor to audit the accounts by 15th March 2008 and the committee can then secure a ‘replacement body corporate manager’ whose services would be provided week by week until “ formal approval” at the annual general meeting.

These suggestions have not been put to the body corporate manager for its further submissions, and I propose to make no order in respect of them. I point out to the committee that the engagement of a body corporate manager must be in the form required by section 78 Standard Module and in accordance with section 87 Standard Module, that is, it requires an ordinary resolution at a general meeting. A termination of the contract (by agreement) must also be effected by an ordinary resolution at a general meeting (section 86A Standard Module.) There is no legislative requirement to have a body corporate manager at all and there is no reason why a suitable person may not be engaged within the spending capacity of the committee to assist the body corporate committee with administrative services, for example, prior to the engagement of another body corporate manager at the annual general meeting.

The performance of an audit, even for part of a year, for a particular project or period, requires an ordinary resolution at a general meeting (section 106(4) Standard Module). This cannot be authorised by the committee even if it is within the committee’s spending limit because it is a restricted issue from the committee. (Section 26 (1)(c) Standard Module.) The statutory motion about the audit which must be put to the annual general meeting, requires a special resolution for the body corporate to decide not to have its books audited. (Section 106(8) Standard Module.)

In order for these applications to be finalised, I make no orders in respect of the additional matters advanced. The body corporate manager and the body corporate are bound by a contract which details how the body corporate manager should be paid and at what rates. The parties are free to negotiate particular methods of how these payments are to be made, or who should check such payments. If a dispute arises, then another application will need to be made to this Office or to the relevant tribunal.

I trust that the body corporate manager and the committee, which I have determined is lawfully appointed, can between them manage the day to day affairs of the body corporate until the annual general meeting in May 2008.

[1] 0644-2004 - 36 Windorah Street Stafford CTS 2813. – Body corporate manager acted in excess of its authority by entering into a renewed new agreement with security group without authorisation of the body corporate.

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 82 (10 March 2008)