Amalfi On Kings [2009] QBCCMCmr 11 (13 January 2009)

Number of Scheme:	36051
Name of Scheme:	Amalfi on Kings
Address of Scheme:	50 king Street Kings Beach CALOUNDRA QLD 4551

TAKE NOTICE that pursuant to an application made under the abovementioned Act by the Body Corporate for Amalfi on Kings

I hereby declare that the current Committee for the Body Corporate for Amalfi on Kings is authorised to call and conduct an annual general meeting, notwithstanding that the legislative timeframe for the meeting has expired.

I further declare that an annual general meeting of the Body Corporate for Amalfi on Kings held by 28 February 2009 will not be invalid simply because it is held more than three months after the end of the financial year of the Body Corporate.

I further order that the Body Corporate for Amalfi on Kings shall provide a copy of this order and the statement of reasons to all owners with the notice of meeting for the annual general meeting.

Amalfi on Kings community titles scheme 36071 (Amalfi on Kings) consists of 22 lots and common property. The community management statement (CMS) for Amalfi on Kings indicates that the Body Corporate and Community Management (Accommodation) Regulation 2008[1] (Accommodation Module) applies to the scheme. Department of Natural Resources and Water records show the scheme is registered as Survey Plan 1070192.

Under the Body Corporate and Community Management Act 1997 (Act), this application was made by the Body Corporate for Amalfi on Kings (applicant) on 9 January 2009, pursuant to a resolution passed outside a committee meeting dated 9 March 2008.

The applicant sought a declaratory order in the following terms: To hold AGM out of time period.

I am satisfied that this is a matter which falls within the legislative dispute resolution provisions.[2]

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 60 of the Standard Module provides that an annual general meeting (AGM) must be called and held within 3 months after the end of each of the scheme’s financial year. Time limits are placed on the period within which an AGM is required to be held for a number of reasons, including accountability and accessibility to information regarding the operation of the scheme.

In this scheme it is apparent that the financial year end is 30 September and so the AGM must be held by 31 December each year.

The application says that a delay occurred in calling the AGM for 2008, as they were not notified of the completion of the audit until 25 November 2008. The Committee sought to convene the AGM for 18 December 2008 but by the time this was agreed to and the meeting notice was issued, there was insufficient time for the 21 day notice required by section 72 of the Accommodation Module.

Apparently at the body corporate manager’s suggestion, the agenda for the AGM on 18 November 2008 included as the first item a motion for majority resolution without the use of proxies that the Body Corporate waive the legislative requirement for giving 21 days notice of the general meeting and proceed with the meeting notwithstanding that less than 21 days notice had been given. This motion was disputed by an owner and accordingly the meeting did not proceed.

The purported wavier motion referred to the Supreme Court decision in Baggott & Anor v Whafflm P/L & Anor [2000] QSC 167. In that matter Justice White made the following comments at paragraph 20:

The submission that the notice period cannot be waived is reinforced by s 25 of the Body Corporate and Community Management (Small Schemes Module) Regulation 1997 which provides for a shortening of the notice period if the body corporate so resolves. A similar provision is not found in the Body Corporate and Community Management (Accommodation Module) Regulation 1997. However in relation to joint stock companies, it was held that a mandatory notice period could be waived by unanimous resolution of the stockholders, In re Oxted Motor Company Limited [1921] 3 KB 32 following In re Express Engineering Works Limited [1920] 1 Ch 466. By analogy, a body corporate can also waive the notice period by unanimous resolution.

Applying this case, there is scope for the 21 day notice period to be waived if all owners agreed. However this is more practical in a smaller scheme where likely consent to the proposal can be garnered before a meeting. It is a more difficult proposition in a larger scheme to seek to call a meeting in the hope that a waiver will be passed, given the risk that not all owners will agree and the meeting will then not be able to proceed. If a wavier motion were to be contemplated, a majority resolution (as proposed here) would clearly not be sufficient. It is arguable that in fact there would need to be more than even a resolution without dissent, but rather the positive consent of all owners, to achieve the unanimity contemplated by the Supreme Court.

Regardless, the situation is that the AGM did not proceed in December and the Body Corporate has not held its 2008 AGM within the defined time. Obviously it is preferable that an AGM be held within the prescribed timeframe, and a body corporate should make every effort to ensure that this timeframe is complied with. However, the courts have recognised that the very detailed provisions of the regulations make it almost inevitable that from time to time there will be non-compliance with the legislation. In particular the courts have commented that non-compliance of an insubstantial nature should not be allowed to imperil the actions of bodies corporate or their committees, particularly in the instance of committees where actions are taken in good faith.[3]

As the timeframe for the AGM has expired, the convening and conduct of the AGM could be invalid in the absence of the authorisation of an adjudicator. This would leave the legal status of the Body Corporate in doubt, as well as the validity of any decisions purportedly passed by any AGM that were not otherwise authorised. This would not be in the interests of owners. Moreover I do not consider that any owner will be materially disadvantaged by the making of the orders sought.

Accordingly, in the circumstances I consider that it is appropriate for an order to be made that the AGM will not be invalid if it is held within the timeframe specified in this order. The deadline of 28 February 2009 will allow more than sufficient time for the meeting to be called with at least 21 days notice. I have ordered that the current Committee is authorised to call and convene the meeting. In addition I have required that a copy of this order and statement of reasons be provided to all owners so they are fully aware of the circumstances.

[1] As of 30 August 2008 the new Accommodation Module came into force, replacing the Body Corporate and Community Management (Accommodation Module) Regulation 1997 which applied until that date.
[2] See sections 227, 228, 276 and Schedule 5 of the Act

[3] Wei-Xin Chen v Body Corporate for Wishart Village CTS 19482, Appeal 4080 of 2000, District Court Brisbane, 29 May 2001 (Unreported).

Queensland Body Corporate and Community Management Commissioner - Adjudicators Orders

Amalfi On Kings [2009] QBCCMCmr 11 (13 January 2009)