Focus [2009] QBCCMCmr 101 (12 March 2009)

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

I hereby order that, pending a final determination, any confidential committee meetings (confidential meetings) that discuss the legal proceedings between the body corporate for Focus (body corporate) and Focus Owners Limited (FOL) must be limited to matters relating to those legal proceedings and must be held separately from meetings discussing the administration of Focus generally. Further, that the body corporate must exclude Lorraine Bryant (the treasurer) from the confidential meetings.

I further order that, pending a final determination, the treasurer must take all reasonable steps to avoid disclosing to FOL any information relating to the dispute between the body corporate and FOL that could reasonably be considered to be privileged or confidential.

Focus Community Titles Scheme (Focus) is a 125 lot scheme under the Body Corporate and Community Management Act (Act) and the Act’s Accommodation Module Regulation (Accommodation Module).

This is an application for interim orders. It arises out of an application by Nimal De Silva Ratnasakera, the owner of lot 97 (applicant) against the body corporate for Focus (body corporate) and the treasurer Lorraine Bryant (the treasurer).

The applicant expresses dissatisfaction with the manner in which the body corporate is conducting a dispute between the body corporate and Focus Owner Limited (FOL) that is currently before the Commercial and Consumer Tribunal. The applicant says that the treasurer is a nominee and associate of FOL. It is submitted that the treasurer is therefore prohibited from serving on the committee, has voted in conflict of interest, and has received confidential information of the body corporate in circumstances where the body corporate and the letting agent are opposing parties in legal proceedings.

The applicant seeks an interim order to suspend Lorraine Bryant from the position of treasurer and restrain her from attending committee meetings or disclosing confidential information to the letting agent. This would operate pending a final determination at which final orders could be considered relating to whether Lorraine Bryant should be removed from the position of treasurer, restrained from disclosing confidential information, and required to deliver up documents received in her capacity as committee member.

An interim order will not be granted unless is it necessary due to the nature or urgency of the circumstances to which the application relates (Act, 279). Further, any orders granted must be just and equitable in the circumstances (Act, 276).

In determining whether it is just and equitable to grant interim relief it is relevant to briefly consider whether the application raises any serious questions for final determination.

It is also relevant to consider whether any inconvenience likely to result from the interim order is outweighed by the potential detriment alleged in the application. Any evidence that an interim order is necessary to prevent serious or irreparable harm will be significant.

An "associate" is defined at section 309 of the Act as follows:-
309 Associates
(1) For this Act, a person is associated with someone else if—
(a) a relationship of a type to which this section applies exists
between them; or
(b) a series of relationships of a type to which this section applies
can be traced between them through another person or other
persons.
(2) This section applies to relationships of the following types—
(a) marriage or de facto relationship;
(b) the relationship of ascendant and descendant (including the
relationship of parent and child) or the relationship of persons
who have a parent or grandparent in common;
(c) partnership;
(d) the relationship of employer and employee;
(e) a fiduciary relationship;
(f) the relationship of persons, 1 of whom is accustomed, or under
an obligation (whether formal or informal), to act in accordance
with the directions, instructions or wishes of the other;
(g) the relationship of a corporation and executive officer of the
corporation;
(h) the relationship of a corporation and a person who is in a position
to control or substantially influence the corporation’s conduct.
(3) Despite subsection (2)(e) and (f), the owner of a lot in a community
titles scheme and a letting agent for the scheme are not associated merely
because of their relationship as owner and letting agent.
(4) In subsection (2)—
“de facto relationship” means the relationship between 2 individuals who,
although not married to each other, live in a relationship like the
relationship between a married couple.
“executive officer”, of a corporation, means a person who is concerned
with, or takes part in, the corporation’s management, whether or not
the person is a director or the person’s position is given the name of
executive officer.

The applicant provides allegations that the treasurer was a director of FOL until 19 October 2005 and a party to conduct of the FOL relevant to the current legal proceedings between the body corporate and FOL. It is further submitted that the treasurer remains the company nominee of FOL as disclosed in the body corporate records.

Submissions on behalf of the treasurer are to the effect that the treasurer was the nominee of FOL but that her nomination ceased on 20 September 2007 when David Demoor and Laurie Doorey replaced her as nominees of FOL. It is further submitted that the treasurer was never an executive officer of FOL and never in a relationship where she could substantially influence FOL’s conduct.

Against this, the applicant has provided further information including a ASIC extract showing a ‘Lorraine Bryant’ as a former director of FOL and claiming the treasurer was a former executive officer of FOL who has continued her association with FOL since resigning as a director.

I am therefore satisfied that there are serious questions to be determined regarding whether the treasurer is in a position of conflict of interest regarding the proceedings in the Consumer and Commercial Tribunal between FOL and the body corporate, particularly given allegations that she was a director at the time some of the conduct in dispute is alleged to have occurred. Questions also arise about legal professional privilege and whether a committee member owes a duty of confidence to the body corporate.

The applicant has established some justification for the interim orders sought pending a final determination of the dispute.

However, it is possible that the applicant will not succeed in establishing any contravention of the legislation. Also, the circumstances of concern raised by the applicant relate only to alleged confidential and privileged information relating to the dispute between FOL and the body corporate rather than applying generally to the role of Lorraine Bryant as treasurer. I am therefore not satisfied that it is appropriate to grant an order that completely suspends Lorraine Bryant from her position as treasurer.

However, pending a final determination of whether or not the treasurer is an associate of FOL, it seems appropriate to grant an interim order that requires the committee discuss the dispute between the body corporate and FOL separately from matters of general business and excludes the treasurer from discussion of the dispute between FOL and the body corporate. Further, it seems appropriate to grant an interim order preventing the treasurer from disclosing to FOL any information relating to the dispute between the body corporate and FOL that could reasonably be considered to be privileged or confidential.

For these reasons, I make the interim order above. If necessary, a final order will be made in due course.

Number of Scheme:	12996
Name of Scheme:	Focus
Address of Scheme:	114 The Esplanade SURFERS PARADISE QLD 4217

Queensland Body Corporate and Community Management Commissioner - Adjudicators Orders

Focus [2009] QBCCMCmr 101 (12 March 2009)