Surfers Palms North [2009] QBCCMCmr 189 (15 May 2009)

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

I hereby order that the proposed annual general meeting of Surfers Palms North proposed for 26 May 2009 must not proceed.

I further order that Peter Nicholson of Active Body Corporate (appointee) is authorised to call, hold and chair an annual general meeting (meeting) of the body corporate for Surfers Palms North.

I further order that this authorisation:

Commences on the date of this order and ceases in three months from the date of this order unless altered by a subsequent order of an adjudicator. Further, the authorisation will cease immediately upon the appointment of a committee if that occurs earlier;
Allows the appointee to perform obligations of the committee or any member of the committee in respect of the calling, holding and chairing of the meeting and in any routine administrative matters. In particular, the appointee is to prepare proposed budgets for adoption by the body corporate at the meeting, submit motions as reasonably necessary, and prepare the minutes of the meeting; and
Is subject to the appointee, as far as practicable, following the procedures in the Accommodation Module governing giving notice for and holding an annual general meeting. In particular, a notice requesting nominations for committee positions and submission of motions for consideration at the meeting must give owners at least three weeks to submit their nominations and motions. However, the giving of notices and the holding of the general meeting need not coincide with the end of financial year date of the body corporate.

I further order that the committee members of Surfers Palms North and Capitol Body Corporate Administration must provide the appointee with access to the books and records of Surfers Palms North upon the appointee making any request for access for the purpose of this appointment.

I further order that, as soon as practicable, the body corporate must send a copy of this order and reasons for decision to all owners.

Surfers Palms North Community Titles Scheme (SPN) is a 61 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 David Abbott, Dennis Hayde, and Alex Nicol as owners and/or committee members (applicants) against the body corporate for SPN (respondent). I note that there is some dispute over the membership of the committee but I am satisfied the present application is within the jurisdiction of this office as I have been provided with a copy of a title search indicating that at least one of the applicants is an owner.

The application was initially lodged on 26 March 2009 but has been amended since that date. The application in its present form alleges that certain persons were intending to hold the annual general meeting for Surfers Palms North without providing owners with the required notice and voting papers. The suspected date of the meeting was 28 April 2009. However, the body corporate manager, Capitol Body Corporate Administration, subsequently provided a copy of a notice of the annual general meeting called for 26 May 2009. As a result, I wrote to the applicants requesting that they inform this office of whether they still seek an interim order to require an administrator to call an annual general meeting. Further, that the applicants review this notice of meeting and provide grounds for any interim order restraining the body corporate from implementing motions to be voted upon at the proposed annual general meeting.

The applicants provided a further submission indicating that they still seek an interim order to require an administrator to call an annual general meeting. This submission raised concerns about all of the motions on the agenda for the 26 May 2009 annual general meeting, the present body corporate manager, and uncertainties as to the proper composition of the committee.

A response from the chairperson raised strong objections to the persons the applicants had proposed as administrator on the basis of an alleged former close association of these persons to the scheme. However, this submission confirmed that there was no working relationship between committee members. It was further submitted that there may be some benefit to the body corporate if nominations for committee positions are recalled. However, it was submitted that the current body corporate manager could recall the meeting and that it would be unnecessary to allow for additional motions to be submitted.

A response by the applicants disputed a number of claims of the chairperson, referred to the failure of the body corporate manager to hold the annual general meeting within the statutory time, and referred to the need to settle the composition of the committee. Further, the applicants suggested that Peter Nicholson of Active Body Corporate (proposed appointee) be appointed as administrator if there were concerns that the other persons suggested were too close to Surfers Palms North in the past. It was submitted that Peter Nicholson has never had any contact with Surfers Palms North and would be pleased to do this task for the applicants.

The submissions indicate that the applicants and the chairperson all agree on the benefits of calling for new committee nominations and then calling a new annual general meeting. The chairperson indicates a preference for the present body corporate manager to perform this task. However, the applicants have indicated that an independent party would be prepared to undertake this task.

In the present circumstances where compliance with statutory timeframes would have meant that committee elections would already have needed to be held, there appears to be little advantage in making any orders about the composition of the committee. Rather, it appears preferable to appoint an administrator with interim powers of the committee to call a general meeting and determine any routine administrative matters.

I have not been provided with any consent of the proposed appointee. The applicants’ submissions give the impression that the proposed appointee would act without charge to the body corporate, perhaps with the possibility of gaining remuneration if subsequently appointed by owners as a body corporate manager or administrator. Obviously it would be inappropriate for the applicants to make any payment to the proposed administrator as he would be required to act on behalf of all owners in calling the meeting and not on behalf of just the applicants.

In the circumstances, I am prepared to make an order that would allow the proposed appointee to perform obligations of the committee or any member of the committee in respect of the calling, holding and chairing of the meeting and in any routine administrative matters. This is conditional upon the meeting being called within three months and the appointment terminating upon a new committee being elected by owners. I note some disagreement in submissions upon the need to call for additional motions for consideration at the meeting but it seems appropriate to allow owners to consider any new or additional matters and I am not satisfied this would significantly delay the meeting. Obviously the proposed appointee will require access to the body corporate records for the purpose of the appointment and the order will also provide for this. It is also appropriate that the body corporate send a copy of this order and reasons for decision to all owners for their information.

For these reasons, I make the order above. I am hopeful the above order will finally resolve the present application. Otherwise, additional applications can be made if necessary.

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

I hereby order that the proposed annual general meeting of Surfers Palms North proposed for 26 May 2009 must not proceed.

I further order that Gavin Fredric of Peak Body Corporate Management Pty Ltd (appointee) is authorised to call, hold and chair an annual general meeting (meeting) of the body corporate for Surfers Palms North.

I further order that this authorisation:

Commences on the date of this order and ceases in three months from the date of this order unless altered by a subsequent order of an adjudicator. Further, the authorisation will cease immediately upon the appointment of a committee if that occurs earlier;
Allows the appointee to perform obligations of the committee or any member of the committee in respect of the calling, holding and chairing of the meeting and in any routine administrative matters. In particular, the appointee is to prepare proposed budgets for adoption by the body corporate at the meeting, submit motions as reasonably necessary, and prepare the minutes of the meeting; and
Is subject to the appointee, as far as practicable, following the procedures in the Accommodation Module governing giving notice for and holding an annual general meeting. In particular, a notice requesting nominations for committee positions and submission of motions for consideration at the meeting must give owners at least three weeks to submit their nominations and motions. However, the giving of notices and the holding of the general meeting need not coincide with the end of financial year date of the body corporate.

I further order that the appointee is entitled to a payment of $110 per hour plus reasonable disbursements for completing the appointment in compliance with this authorisation

I further order that, as soon as practicable, the body corporate must send a copy of this order and reasons for decision to all owners.

This is a supplementary interim order upon an application by David Abbott, Dennis Hayde, and Alex Nicol as owners and/or committee members (applicants) against the body corporate for SPN (respondent).

On 15 May 2009 I made interim orders on the terms above except appointing Peter Nicholson of Active Body Corporate as the appointee. This appointment was made based on submissions from the applicants to the effect that Peter Nicholson would be pleased to act as administrator to call and conduct an annual general meeting. However, on 18 May 2009 this office received a facsimile from Peter Nicholson indicating that no owner or committee member had consulted him in regard to the appointment and that he was unable to act in this capacity due to a family illness. I therefore requested a letter be sent to the parties enclosing Peter Nicholson’s facsimile and asking for two or three alternative names for appointment as administrator.

David Abbott subsequently provided a copy of a consent from Wendy Steadman. Gavin Fredric also provided a consent, presumably at the request of one of the applicants. A third consent was provided by Ian Leslie and which he said was "as requested by Mr David Abbott". I requested details of these persons be sent to the other parties asking for any objections or alternative nominations. The only objection received was from the chairperson on the basis of cost. This submission was to the effect that the existing body corporate manager should be used as they have done all the preparation and are able to proceed at no additional cost. No specific objections, apart from cost, were raised to any of the persons suggested.

Each of the alternative administrators consented to act based upon an hourly rate (and presumably with reimbursement for any reasonable disbursements). In the absence of any specific objections to any of the proposed appointees I was initially inclined to appoint Ian Leslie as the person with the lowest hourly rate. However, I have since been provided with a copy of an email from Colin Lamont which he says is on behalf of David Abbott. This email says that "He [Mr Leslie] was invited by a third party to submit but never endorsed by us. Since Mr. Leslie sent in his CV we have discovered that he is an active member of the CTIQ. The main sponsor of the CTIQ is Body Corporate Services. Body Corporate Services was the company who our auditor in 2007 accused of covering fraud by the previous Chairman Graham Beattie. BCS refused access to their computer records to our auditor and we believe they would do what they can to frustrate our attempts to have a fair AGM and possibly a fair and honest committee. We do not know if Mr Leslie would be subject to pressure from outside but it would be preferable at least so that justice is seen to be done if an active member of the CTIQ were not involved."

These are obviously serious allegations which are not appropriate for determination as part of an interim order. It is obviously preferable that any appointment of an administrator occur sooner rather than later to give owners an opportunity to vote as they see fit. This further email also effectively withdraws any nomination for Ian Leslie made by David Abbott. I therefore propose to appoint Gavin Fredric as he has the next lowest hourly rate.

I note that this appointment will result in some additional costs being incurred by owners. However, I am satisfied that it is appropriate to make this appointment given the obvious dysfunction of the existing committee and the failure of the committee to ensure the annual general meeting was called within the statutory time period. Considering the dysfunction, past failures and various allegations made it is preferable to appoint an independent person with no prior involvement with the scheme and who is not subject to any concerns expressed by or on behalf of current committee members.

As with the previous order, the present order is limited to authorising the appointee to conduct a replacement annual general meeting and carry out committee functions in relation to any routine administrative matters. This will enable the appointee to, for example, adopt resolutions authorising minor maintenance works and pay bills for expenses the body corporate has already authorised.

However, I note that the appointee is not exclusively granted these powers. There is no intention that the existing committee members be deprived of their existing functions (except by necessary implication where, for example, the appointee is to prepare the proposed budgets and chair the meeting). Therefore, the existing committee members can minimise the costs of the body corporate to the extent that they are able to put aside their differences and deal with the ordinary business of the body corporate apart from the calling of the meeting.

In particular, questions have been raised about the capacity of the existing chairperson to pay bills and provide instructions to the caretaker. If there is an existing resolution of the committee authorising the payment or the instructions then the existing chairperson would normally be able to act as an officer of the body corporate to ensure that resolution is carried out. However, the chairperson does not have the capacity to independently make a decision where a resolution of the body corporate is required. To the extent that it is necessary for the body corporate to make a decision about a matter not already authorised by resolution then an appropriate decision making process will need to be followed. For example, the existing committee could pass a resolution, the appointee could minute a resolution,[1] or an application could be made to an adjudicator.[2]

Similarly, I have not interfered with any existing contract the body corporate has with its existing body corporate manager. The body corporate manager can therefore continue to comply with its contractual obligations.

In summary, as part of an interim order in disputed circumstances it in not appropriate for me to relieve any committee members or body corporate managers of their current positions. It is preferable instead that the appointee proceeds to call the meeting and that owners vote for a new body corporate manager and committee according to what they consider is in the best interests of their scheme.

It is appropriate that the body corporate send a copy of this order and reasons for decision to all owners for their information.

[1] Pursuant to this order, albeit limited to routine administrative matters.
[2] E.g. for an order authorising emergency expenditure (Accommodation Module, 149(1)(c)).

Number of Scheme:	20846
Name of Scheme:	Surfers Palms North
Address of Scheme:	2 St Kevins Court BENOWA QLD 4217

Number of Scheme:	20846
Name of Scheme:	Surfers Palms North
Address of Scheme:	2 St Kevins Court BENOWA QLD 4217

Queensland Body Corporate and Community Management Commissioner - Adjudicators Orders

Surfers Palms North [2009] QBCCMCmr 189 (15 May 2009)