La Crystal [2009] QBCCMCmr 126 (23 March 2009)

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

I hereby declare that an annual general meeting of the Body Corporate for La Crystal held within two (2) months of the date of this order 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 Committee for the Body Corporate for La Crystal is authorised to call and conduct the annual general meeting for 2009, notwithstanding that the legislative timeframe for the meeting has expired.

I further order that the Committee for the Body Corporate for La Crystal shall provide a copy of this order and the statement of reasons to all owners with the notice of meeting for the 2009 annual general meeting.

La Crystal community titles scheme 19469 (La Crystal) consists of 15 lots and common property. The community management statement (CMS) for La Crystal indicates that the Body Corporate and Community Management (Accommodation) Regulation 2008 (Accommodation Module) applies to the scheme.

Under the Body Corporate and Community Management Act 1997 (Act), this application was made by the Body Corporate for La Crystal (applicant) on 23 March 2009, pursuant to a resolution passed outside a committee meeting on 16 March 2009.

The Body Corporate seeks an order to issue nominations and call the AGM as soon as possible as it is now outside the prescribed period to hold the AGM.

I am satisfied that this is a matter which falls within the legislative dispute resolution provisions.[1]

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:

(b) the exercise of rights or powers, or the performance of duties, under the Act or the CMS; or

(i) the engagement of a person as a body corporate manager or service contractor; or

An order may require a person to act, or prohibit a person from acting, in a way stated in the order.[2] An adjudicator's order may contain ancillary and consequential provisions the adjudicator considers necessary or appropriate.[3]

Section 64 of the Accommodation Module provides that an annual general meeting (AGM) must be called and held within three 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.

The applicant advises that in this scheme the financial year end is 31 October. This means that the AGM must be held 31 January each year. However an AGM has not yet been held in 2009.

It appears that the delay in calling the AGM has arisen because of changes in the body corporate manager (BCM) for the scheme. The application says the former BCM’s business was sold and the Body Corporate did not agree to the assignment of the management agreement to the purchaser. The Committee has since sought the assistance of a new BCM.

I have some reservations about the justification for this application. I have no reason to believe that the Committee has not acted in good faith in this matter. However the fact that the BCM has changed is not in itself a reason to delay the AGM. The Committee could, and should, have called and convened the AGM regardless of whether there was a currently engaged BCM for the scheme. Moreover, it is apparent the Committee entered into some sort of interim arrangement with a new BCM firm on 28 January 2009, but the application gives no indication as to the reason for the further delay in the intervening period.

Notwithstanding these reservations, the 2009 AGM cannot now be held within the legislative timeframe. If the Committee were to call the AGM now, the convening and conduct of the AGM could be invalid in the absence of the authorisation of an adjudicator. This would leave in doubt the legal status of the Body Corporate, as well as the validity of any decisions purportedly passed by any AGM. This would clearly not be in the interests of owners.

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.[4]

In the circumstances I am satisfied 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 application does not indicate a date by which it seeks to hold the AGM, but merely indicates that it is sought as soon as possible. Having regard to the 21-day notice requirements in section 32 of the Accommodation Module, the AGM could be held within as little as a month of the date of this order. I will allow the Committee two months to call and convene the AGM but would encourage them to do so earlier if that is practical.

I have also authorised the current Committee 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] See sections 227, 228, 276 and Schedule 5 of the Act
[2] Section 276(2) of the Act
[3] Section 284(1) of the Act

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

Number of Scheme:	19469
Name of Scheme:	La Crystal
Address of Scheme:	137 Olsen Avenue LABRADOR QLD 4216

Queensland Body Corporate and Community Management Commissioner - Adjudicators Orders

La Crystal [2009] QBCCMCmr 126 (23 March 2009)