Silva Lake [2008] QBCCMCmr 84 (10 March 2008)

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

Vera Agnes Edwards, the Owner of lot 4, by her Attorney, Mr Leslie Samuel Simmonds, acting under a Power dated 1 November 2001

I hereby order that the application for orders to:

Cancel the Extraordinary General Meeting scheduled for 12 March 2008;
Appoint an administrator;
Confirm the list of office bearers shown on page 3 of the minutes of the AGM held on 22 November 2007;
Confirm the minutes under “General Business” of the EGM held on 29 January 2008 which relates to the election of Mrs M Hoff as garden liaison person;
Confirm the minutes of the EGM of 29 January 2008 as four members voted against confirmation at the EGM of 7 February 2008 yet they were not in attendance at the EGM of 29 January 2008;

is dismissed on the grounds that the application is misconceived and without substance within the meaning of section 270(1)(c) of the Body Corporate and Community Management Act 1997 (“the Act”).

This application is by Vera Agnes Edwards, the owner of lot 4, by her Attorney, Mr Leslie Samuel Simmonds, acting under a Power dated 1 November 2001 (applicant) against the body corporate.

The applicant has also sought the following interim order “In addition to cancellation of the EGM of 12 March 2008, I request that the appointment of a body corporate manager be held in abeyance until the final outcome of this appointment is decided by the Adjudicator.” The applicant expresses a view that an Administrator should be appointed, but does not specifically seek an order in this regard.

“Silva Lake” is a community titles scheme under the Body Corporate and Community Management Act 1997 (Act) and the Body Corporate and Community Management (Standard Module) Regulation 1997 (Standard Module).

In accordance with section 247 of the Act, the Commissioner for Body Corporate and Community Management has referred the application to me to decide whether the nature or urgency of the circumstances of the application warrant an interim order being issued. The commissioner has referred the application to me even though affected persons have not been given notice of the application, or afforded an opportunity to make submissions about the application (section 247(3), Act). Section 276(1) of the Act provides that an adjudicator may make an order that is just and equitable in the circumstances to resolve a dispute, in the context of a community titles scheme, about a claimed or anticipated contravention of the Act or the community management statement; or the exercise of rights or powers, or the performance of duties, under the Act or the community management statement. An order may require a person to act, or prohibit a person from acting, in a way stated in the order (section 276(2), Act). An adjudicator's order may contain ancillary and consequential provisions the adjudicator considers necessary or appropriate (section 284(1), Act).

Section 279(1) of the Act allows an adjudicator to make an interim order if satisfied, on reasonable grounds, that an interim order is necessary because of the nature or urgency of the circumstances of the application. In any consideration of an application which seeks the making of an interim order, it is necessary to determine at the outset whether, because of the nature or urgency of the circumstances relating to the application, an interim order is in fact necessary or appropriate. The examples included in the Act under section 279(1) are suggestive of the usual circumstances where an interim order might be made. Both examples are in the nature of injunctive relief. Whilst the range of matters which might be the subject of an interim order is not capable of definition, the applicant does need to establish that the circumstances of the application warrant the making of an interim order.

To assist me in determining whether it is just and equitable to grant relief at this stage, before full and final consideration of all the issues raised, I consider it relevant to briefly consider whether the application raises any serious legal question that will need to be determined. If the application raises a serious legal question then it may be appropriate to make an interim order to attempt to preserve the integrity of the matters in dispute pending the final determination. It is relevant to consider whether the likely inconvenience should no interim order be granted outweighs any inconvenience likely to result from the interim order. In particular, it is relevant to consider whether an interim order is necessary to prevent something occurring that cannot be adequately redressed by a final order.

The applicant appears to object to the convening of the EGM on 12 March 2008 on the basis that the effect of two of the motions proposed would be to remove the existing chairperson (Mrs Johnes) and secretary (Mr Hoff), both of whom were elected at the AGM of 22 November 2007, from their positions on the committee and elect a new chairperson and secretary to fill the resulting vacancies.

The grounds offered by the applicant do not appear to me to lend any support to the outcomes sought.

Firstly, the disputed alleged breaches of GCCC water restrictions by the applicant and the owner of lot 2 are completely irrelevant to the current application. The applicant was alerted to this[1] and given the opportunity to remove this information from the application but did not do so.

Secondly, I do not see how the body corporate manager resigning has any relevance to the orders sought. In fact, apart from there being no indication that the body corporate is currently contemplating appointing a new body corporate manager, I would have thought it counter-productive for the body corporate to be restrained from appointing a new body corporate manager in these circumstances in any event.

Thirdly, I consider that the EGM scheduled for 12 March 2008 was contemplated by Adjudicator Toohey in application 0980-2007[2] wherein he dismissed an application for an order that the AGM of 22 November 2007 be declared invalid and commented in his reasons that “It is within the powers of owners, if considered desirable, to require another extraordinary general meeting to be called and vote to remove and reappoint any individual committee members.”

Fourthly, as pointed out to the applicant in the telephone conversation on 29 February 2008, section 25(2)(f) of the Standard Module specifically provides that a committee member’s position becomes vacant if they are removed from office by ordinary resolution of the body corporate. Section 25B(1) further provides that if a committee member is removed under section 25(2)(f), the body corporate may, at the general meeting at which the resolution is passed, appoint a person who is eligible to be a member of the committee to fill the vacancy. Section 25B(2) specifically provides that it is not necessary for the body corporate to conduct an election to make an appointment under s.25B(1). While it is arguable that before motions 2 and 3 listed on the agenda for the EGM on 12 March 2008 can be considered, motions removing the existing chairperson and secretary should be passed, I consider that the intent of motions 2 and 3 is clear and that if passed, the existing secretary and chairperson would, of necessity, be removed from their positions. Support for this view is found in the minutes of the EGM of 7 February 2008 wherein the removal of the chairperson and secretary elected at the AGM on 22 November 2007 was discussed and it was resolved “That a vote be called to remove the chairperson and secretary as elected at the AGM held 22 November 2007, and vote to reappoint a chairperson and secretary. (Yes 4, No 3, Abstain 0).” To my mind, motions 2 and 3 of the EGM scheduled for 12 March 2008 are the result of this resolution of the EGM of 7 February 2008 and the effect of them being passed would be that the secretary and chairperson elected at the 2007 AGM would be removed from their positions and Ms Steele would assume the position of chairperson and Mr Doughty would assume the position of secretary.

Despite being invited to supply additional grounds that might indicate a basis for me preventing the EGM scheduled for 12 March 2008 from proceeding, the applicant failed to provide anything other than a copy of the Power of Attorney by which Mr Simmonds is appointed to act on her behalf, written consent to undertake body corporate management of Silva Lake by Queensland Strata Administration and a copy of a letter dated 28 February 2008 to the Treasurer requesting a change in venue for the EGM scheduled for 12 March 2008, signed by three committee members.

The applicant also expresses a view that an Administrator should be appointed. The appointment of an administrator is not interim, but rather final, in nature. I would not appoint an administrator as an interim order. In any event, the applicant only offers as grounds for this that the owners can no longer make any common agreement. I disagree. Seven motions considered at the AGM of 22 November 2007 were passed by 7 votes to nil. To the extent that the applicant means the body corporate has not been able to make unanimous decisions since then, he appears to be correct. However, the legislation does not require a body corporate to make unanimous decisions to function.

While I acknowledge that there is a high level of disputation within this scheme between what appears to be two distinct factions, it appears that the body corporate is continuing, for the most part, to meet its legislative obligations, financially and administratively. It has an elected committee holds meetings regularly and there has not been any suggestion that it is not financially sound.

I acknowledge that if motions 2 and 3 of the EGM scheduled for 12 March 2008 are passed, Mrs Johnes and Mr Hoff will be removed from their positions on the committee as chairperson and secretary respectively and will therefore be precluded from involvement in the administration of the body corporate at the committee level in these roles. However, it is for the body corporate to decide on membership of the committee. The existing secretary and treasurer, along with the applicant, appear to be a minority at a general meeting level and voting on motions which require an ordinary resolution in order to be passed will generally go against them in the case of any division between the two factions in this body corporate. However, this too is in accordance with the legislation, subject to the body corporate’s legislative obligations under the Act to administer the body corporate reasonably and for the benefit of owners.[3] The owners in the minority faction retain their rights to challenge decisions of the committee and the body corporate via dispute resolution applications to this office if those decisions are believed to be unreasonable or not for the benefit of owners.

An order appointing an administrator for a scheme is not made lightly. Generally, to be successful in an application for the appointment of an administrator, an applicant must demonstrate that the day-to-day administration of the body corporate has broken down irretrievably, and/or that the affairs of the body corporate are in such disarray as to warrant the appointment of an administrator. One of the secondary objects of the Act is “to balance the rights of individuals with the responsibility of self management as an inherent aspect of community titles schemes”. In my view the right of a body corporate to administer its own affairs should therefore only be disrupted in very serious circumstances. In this case I am not satisfied that the appointment of an administrator is warranted.

The first final order sought by the applicant, to confirm the list of office bearers as shown in the minutes of the AGM of 22 November 2007, is in my view redundant in light of my refusal to grant the interim orders sought. If motions 2 and 3 of the EGM scheduled for 12 March 2008 are passed, a new secretary and chairperson will be appointed. If motions 2 and 3 are not passed, the secretary and chairperson elected at the AGM of 22 November 2007 will remain in office, for the time being.

The second final order sought, the effect of which is to confirm Mrs M Hoff in the role of garden liaison person, appears to be without foundation given that, firstly, it does not appear that any resolution appointing Mrs Hoff to the role was made at the EGM of 29 January 2008. Even if such a resolution were made, at the EGM of 7 February 2008, a resolution was passed to reinstate Angela Steele as garden liaison person by 4 votes to 3. In any event, I am concerned that the purported appointment of a garden liaison person constitutes an invalid delegation of a body corporate function. It is not appropriate for the body corporate to delegate its statutory functions to another body. The Act specifically provides that a body corporate cannot delegate its
powers (Act, 97). The legislation establishes two decision making bodies of the body corporate. These are the body corporate committee and the body corporate in general meeting. The committee has the power to decide most day to day issues concerning the body corporate but some issues are restricted for the consideration of owners in general meeting (Act, 100). All decisions of the body corporate should be in the form of a resolution of one of these bodies.

The third final order sought, to confirm the minutes of the EGM of 29 January 2008, is equally without foundation. A motion to approve these minutes was considered at the EGM of 7 February 2008 and failed by 3 votes to 4. The grounds put forward by the applicant in this regard are that the four people voting against the motion were not present at the EGM of 29 January 2008. Even if the applicant’s grounds had merit, I regard the order sought as misconceived, given that there were only two resolutions passed at the meeting of 29 January 2008, one of which was to confirm the minutes of the AGM of 22 November 2008 and the other to appoint Body Corporate Choice as body corporate managers. An application to declare the AGM of 22 November 2008 invalid has been dismissed and Body Corporate Choice have since resigned as body corporate managers for the scheme.

I do not believe the applicant has submitted any grounds that persuade me that there are any serious legal questions to be determined. In fact, I have formed the view that the
application as a whole is misconceived and without substance and that to allow the application to proceed would place a hardship on the body corporate. Anticipated hardship would include the expense of the body corporate in making submissions in respect of the relief sought as well as costs in distributing a copy of the application to each owner who may be considered an affected person (Act, 243). I therefore propose to dismiss the application on the basis that it is misconceived and without substance (Act, 270(1)(c)). Given the lack of merit in the applicant’s grounds, I do not consider there could be any injustice to the applicant (or any other person) through a dismissal of the application at this stage rather than at a later time after the seeking of submissions from all owners. I note that section 270(2) of the Act specifically provides that an Adjudicator’s power to make an order under s.270 may be exercised without investigating the detail of the application and before an investigation has ended.

[1] In a telephone conversation on 29 February 2008 with a Senior Community Titles Officer of this Office
[2] Silva Lake [2007] QBCCMCmr 703 @ p2
[3] See ss.94 & 152

Number of Scheme:	4380
Name of Scheme:	Silva Lake
Address of Scheme:	280 Christine Avenue VARSITY LAKES QUEENSLAND 4227

Queensland Body Corporate and Community Management Commissioner - Adjudicators Orders

Silva Lake [2008] QBCCMCmr 84 (10 March 2008)