Redlynch Grove Apartments [2009] QBCCMCmr 195 (21 May 2009)

Last Updated: 5 June 2009

REFERENCE: 0153-2009

ORDER OF AN ADJUDICATOR

MADE UNDER PART 9 OF CHAPTER 6

BODY CORPORATE AND COMMUNITY MANAGEMENT ACT 1997

Number of Scheme:	36924
Name of Scheme:	Redlynch Grove Apartments
Address of Scheme:	1-2 Fairweather Road REDLYNCH QLD 4870

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

AM Rights Pty Ltd, the Owner of lot 2

I hereby declare that the ruling by the Chairperson of the body corporate at the Extraordinary General Meeting held on 18 February 2009 that motions 2, 3, & 4 were “out of order” was invalid; I further declare that motions 2, 3 and 4 were carried and the resolutions upon those motions are deemed to be valid resolutions of the Extraordinary General Meeting held on 18 February 2009.

STATEMENT OF ADJUDICATOR’S REASONS FOR DECISION - REF 0153-2009

“Redlynch Grove Apartments” CTS 36924

THE SCHEME

Redlynch Grove Apartments, is a subdivision of 98 lots recorded under a building format plan of subdivision (formerly a building format plan) and is regulated by the Body Corporate and Community Management Act 1997 and the Body Corporate and Community Management (Accommodation Module) Regulation 2008.

APPLICATION

The applicant, AM Rights Pty. Ltd. as trustee for the Redlynch Grove Trust is seeking the following final orders:

1. An Order that the declaration by the Chairperson of the body corporate at the Extraordinary General Meeting held on 18 February 2009 that motions 2, 3, & 4 were “out of order” was invalid;
2. An Order that the declaration by the Chairperson that the procedural motion considered by persons present at the Extraordinary General Meeting on 18 February 2009 pursuant to section 79(3) Body Corporate and Community Management (Accommodation) Module regulation 2008 was passed;
3. In the alternative that Carolyn Doyle, Body Corporate Manager, Body Corporate Services Pty. Ltd., Cairns, Queensland be appointed an administrator to convene an Extraordinary General Meeting of the Body Corporate for the purposes of putting to owners for a vote, motions, in the same terms as Motions 2, 3 and 4 considered at the Extraordinary general Meeting held on 18 February 2009;
4. Such further or other interim Order as the Adjudicator considers appropriate to give effect to the outcomes sought by the applicant in this application.
   

The applicant previously sought the following Interim Orders:

1. An Interim Order that the declaration by the Chairperson of the body corporate at the Extraordinary General Meeting held on 18 February 2009 that motions 2, 3, & 4 were “out of order” is invalid;
2. An Interim Order that the declaration by the Chairperson that the procedural motion considered by persons present at the Extraordinary General Meeting on 18 February 2009 pursuant to section 79(3) Body Corporate and Community Management (Accommodation) Module regulation 2008 was passed;
3. In the alternative an interim order that Carolyn Doyle, Body Corporate Manager, Body Corporate Services Pty. Ltd., Cairns, Queensland be appointed an administrator to convene an Extraordinary General Meeting of the Body Corporate for the purposes of putting to owners for a vote, motions, in the same terms as Motions 2, 3 and 4 considered at the Extraordinary general Meeting held on 18 February 2009;
4. Such further or other interim Order as the Adjudicator considers appropriate to give effect to the outcomes sought by the applicant in this application.
   

On 4 March 2009 I declined to make the requested interim orders on the grounds that the effect of making the interim orders sought would be to finally determine the matters in dispute when the purpose of an interim order is to keep matters in status quo until determination of the substantive issues upon the merits

BACKGROUND

The applicant states that certain lot owners requisitioned the calling of an EGM and on 9 January 2009 the body corporate issued a notice of the EGM which was held on 18 February 2009.

The agenda for the EGM included motion 2 which read as follows:

That the positions of Chairperson, Secretary, Treasurer and all of the other committee members be declared vacant and each of the positions be filled by the process set out in section 37 of the Accommodation Module by the appointment of the following persons to the stated committee positions:

Chairperson: Paul Hrynko
Secretary: Stuart Vaughan
Treasurer: Neal Evans
Ordinary Member: Peter Hoggard
Ordinary Member: Scott MacKenzie
Ordinary Member: Sarah Brown
Ordinary Member: leanne Canuto

(submitted by lots 3,4,5,9,10,12,14,15,17,20,21,22,25,26,27,28,29,30,31,32,33,34,35, 36,38, 39,41 42 & 58,44,45,47,49,51,53,56,59,60,62,63,65,68,71,72,73,74,79,80,81,82,84,86,87,88,94,95,97).

The agenda also included motion 3 which read as follows:

That independent legal advice is to be obtained by the body corporate to investigate the past conduct of the current committee specifically as to:

1. acting for their personal gain or benefit (particularly the activities of the Chairman;
2. the issue of vexatious claims and abuse of process;
3. inappropriate conduct including but not restricted to unreasonable harassment of tenants;
4. any abuse of powers and privileges as committee members;
5. misappropriation or unnecessary use of body corporate funds; and
6. general misconduct.
   

(submitted by lots 3,4,5,9,10,12,14,15,17,20,21,22,25,26,27,28,29,30,31,32,33,34,35, 36,38, 39,41 42 & 58,44,45,47,49,51,53,56,59,60,62,63,65,68,71,72,73,74,79,80,81,82,84,86,87,88,94,95,97).

The agenda also included motion 4 which read as follows:

That based on the findings of the investigation into the conduct of the current committee, further advice be sought for the issue of a claim for damages against individual members of the committee
as identified in the investigation.

(submitted by lots 3,4,5,9,10,12,14,15,17,20,21,22,25,26,27,28,29,30,31,32,33,34,35, 36,38, 39,41 42 & 58,44,45,47,49,51,53,56,59,60,62,63,65,68,71,72,73,74,79,80,81,82,84,86,87,88,94,95,97).

The applicant states that:

• An overwhelming majority of owners requisitioned the calling of the EGM held on 18 February 2009; and
• The results of voting were as follows:
  1. Motion 2 - 65 votes in favour, 3 votes against, 1 abstention;
  2. Motion 3 - 44 votes in favour, 7 votes against, 8 abstentions;
  3. Motion 4 - 43 votes in favour, 9 votes against, 9 abstentions
     

However, at the EGM held on 18 February the Chairperson ruled Motions 2, 3 and 4 out of order pursuant to section 79(1) of the Accommodation Module Regulation.

The applicant moved a procedural motion that persons present and entitled to vote reverse the Chairperson’s declaration. The applicant claims that this motion was dismissed on the basis that the applicant was “unfinancial” because it was indebted to the body corporate. The applicant states that it does not owe a “body corporate debt” as defined in the Schedule to the Accommodation Module regulation because:

1. There are no outstanding contributions or installments of contributions due by the applicant to the body corporate;

2. There are no outstanding penalties for late payment of any contributions;

3. There exists a disputed claim for damages relating to maintenance functions performed pursuant to the Caretaking Agreement.

SUBMISSIONS

Previously solicitors for the body corporate committee made the following submissions in response to the application for Interim Orders:

• The effect of the interim orders would be to finally determine the matters in dispute without affording the parties the full benefit of the adjudication process;
• the applicant has not provided evidence in support of its contention that the chairperson’s rulings in respect of motions 2, 3 & 4 were invalid;
• It is claimed that Motion 2 was ruled out of order for reasons which included the following:

It does not allow voters to consider each nominee on his or her merits;

It denies other eligible individuals the right to nominate;

The proposed committee does not fairly represent all owners;

The motion was proposed by the service contractor/ letting agent.

• It is claimed that Motion 3 & 4 were ruled out of order for reasons which included the following:

The motion does not name a particular legal adviser or provide a means of choosing an adviser;

It does not include a quote or quotes for the body corporate to approve the expenditure;

There is no provision in the budget for this expenditure and neither this motion nor a subsequent motion provide for a special levy contribution.

• If the order is granted and motions 2, 3 and 4 are resolved in favour, the result would be that the new committee appointed pursuant to motion 2 would be investigated pursuant to motions 3 & 4;
• There were 3 procedural motions voted upon at the meeting in respect of the chairperson’s ruling for motions on motions 2; 3 & 4 and the results of the voting were as follows .

Re motion 2: No- 3, Yes- 5, Invalid- 1.

Re motion 3: No- 3, Yes- 5, Invalid- 1.

Re motion 4: No- 2, Yes- 5, Invalid- 1.

• It is claimed that the applicant has not provided any evidence to support its “excessive request” to have an administrator appointed;
• The committee believes that it is effective and professional;
• The committee proposes to call an AGM for early May at which the issues raised in the application can be rectified;
• The results of voting were as follows:

Motion 2 - 40 votes in favour,
Motion 3 - 33 votes in favour,
Motion 4 - 32 votes in favour,

• It is claimed that the applicant owed a body corporate debt in relation to lot 2 at the time of the meeting and was therefore not entitled to vote.
  

At the Interim stage one committee member made the following submissions:

• She did not believe that the motions should have been ruled out of order because the criteria contained in subsection 79(1) of the Body Corporate and Community Management (Accommodation Module) Regulation 2008 had not been established;
• The Chairperson claimed that his decision was based on legal advice that he had received but refused to present that legal advice despite requests to do so;
• The decision by the Chairperson to rule Motion 2 out of order was misconceived as the ordinary process for election of committee members is not applicable when the committee is being removed by ordinary resolution in accordance with sections 33, 36 and 37 of the Accommodation Module Regulation.
• The committee needed to be replaced to prevent further damage to the finances and reputation of the scheme;
• The collective will of the lot owners should prevail.
  

Pursuant to section 243 of the Act, further submissions were sought from the body corporate committee and all lot owners as well as the body corporate committee regarding the final outcomes sought by the applicant. Nine lot owners made submissions supporting the application while six lot owners and the committee opposed the application.

Common themes contained in submissions supporting the application included the following:

• The Chairmanship of the EGM held on 18 February was poorly conducted;
• The Chairman relied upon a false and misleading document that wrongly claimed the applicant was in arrears to the body corporate;
• The Chairman ordered the applicant’s representatives from the meeting and refused to show anyone the letter from the body corporate lawyers, upon which he purported to rely;
• The legal advice did not support the Chairman’s claims and the minutes of the meeting were incorrect;
• It is claimed that the caretaking service contractor has been properly carrying out its functions but that the committee has not acted in the best interests of unit and this has allegedly resulted in occupiers leaving the complex due to harassment and bullying;
• Breaches of by-laws should be dealt with in a proper manner and follow the procedures in the legislation rather than the Chairman taking matters into his own hands. Children should be able to ride their bikes within the complex and occupiers should be able to enjoy the pool area as they would in their own home
• There has been a high turnover of on-site management staff and occupiers of lots in this scheme due to ongoing disputes with the body corporate committee;
• A recent motion to replace the body corporate was supported by an overwhelming majority and this democratic process should be respected;
• The Chairman arrogantly refused to allow further discussion with lot owners after he declared the motions out of order at the EGM;
• It was wrongly claimed that certain lot owners were indebted to the body corporate and therefore not entitled to vote.
  

Submissions opposing the application included the following:

• There has been a high turnover of caretaking and management staff in the complex and the submitter is of the opinion that the only person who consistently attends to maintenance and enforcement of by-laws in the scheme is Mr. Scales who does much of the work that the caretaking staff are supposed to do e.g. gardening, spraying of weeds (instead of whole gardens), cleaning of pool and cleaning of bins;
• The committee was aware that AM Rights had employed Mr. Scales and his son to assist in carrying out their duties;
  • The committee is entitled to give directions to the caretaking service contractor;
    • Some lot owners have taken offence to Mr. Scales enforcing the scheme by-laws;
    • AM Rights has failed to employ competent staff to undertake caretaking duties;
    • The sale of the management rights failed because the vendor produced false and misleading information to the purchaser, for example the vendors claimed that the office/ reception was “on title” when in fact it is on common property and did not explain the full scope of duties attached to purchase of the management rights;
    • The applicant is being supported by members of his rental pool which consists of absentee owners who are unaware of what happens on the site and provide “blind support” to the caretaker/ letting agent;
    • The proposed committee has been hand-picked by Richard Arbon of AM Rights, the caretaker/ letting agent;
    • They believe that AM Rights will make unnecessary purchases of equipment if it is not held accountable by the body corporate committee;
    • False accusations have been made against committee members.
      

Solicitors for the body corporate committee made the following submissions:

• The applicant did not move a procedural motion to reverse any of the rulings by the Chairman;
• The Chairperson did not declare the applicant unfinancial at any time during the meeting and was unaware that the applicant was unfinancial ;
• After declaring the relevant motions out of order the Chairperson explained the procedure for overturning his ruling and asked that members present vote in respect of his ruling;
• In respect of motions 2 & 3 the chairperson declared that there were 5 votes in favour of his ruling and 4 against;
• In respect of motion 4 the chairperson declared 5 votes in favour of his ruling, 3 against and 1 abstention;
• The applicant was “unfinancial “ at the time of the meeting on the basis that there was an amount of $43.10 outstanding in respect of an insurance levy;
• The “unfinancial” status of the applicant was not identified until the minutes of the meeting were prepared;
• Had the applicant been entitled to vote, the outcome would have been no different;
• The applicant did not move a procedural motion to overturn the chairperson’s ruling but in any case such a motion would not have been successful;
• The applicant has not provided any reason to support its contention that the chairperson’s ruling was invalid;
• Because the application does not state any basis upon which the chairperson’s rulings should be invalidated, the respondent is unable to properly respond to that part of the application and therefore it would not be just and equitable for the adjudicator to make the order sought;
• If all three rulings were declared invalid and all 3 motions were deemed to have been resolved, then the subject matter of motions 3 & 4 would pertain to the new committee;
• It is claimed that the second order sought is based on misleading information and in any event, is moot, because the chairman’s rulings were supported by the majority;
• The third order is unnecessary because the body corporate is capable of handling its own affairs and the applicant has not provided any evidence to the contrary;
  

Submissions in reply included the following:

• The EGM was held on 18 February 2009 to consider Motions 2, 3 and 4 and at least motion 2 was put forward by requisition by more than 50% of owners;
• The chairperson declared the applicant ineligible to vote at the EGM on the basis that the applicant was unfinancial. When Mr Arbon, the applicant’s representative arrived at the EGM, the Chairperson immediately informed Mr. Arbon that the applicant was unfinancial and therefore ineligible to vote. The chairperson refused to provide any documents or particulars of the alleged voting ineligibility.
• a committee member, Ms. Saleem, has stated that “The chairperson’s reasons for ruling the motions out of order did not in my view establish section 79(1)(a)(i) or (ii) or section 79(1)(b) of the Accommodation Module. The Chairperson said that the motions were out of order because of legal advice he had received which he refused to present despite requests from me and a number of other requests. He said that the legal advice would be attached to the minutes of the meeting . I have not to date received a copy of the advice or minutes of the meeting. This refusal to disclose the “legal advice” to me is despite the fact that I am a committee member”.
  

Section 79 of the Accommodation Module provides as follows:
Power of person chairing meeting to rule motion out of order

(1) The person chairing a general meeting of the body corporate must rule a motion out of order if—

(a) the motion, if carried, would—

(i) conflict with the Act, this regulation or the by-laws, or a motion already voted on at the meeting; or

(ii) be unlawful or unenforceable for another reason; or

(b) except for a procedural motion for the conduct of the meeting, or a motion to correct minutes—the substance of the motion was not included in the agenda for the

meeting.

(2) The person chairing the meeting must, when ruling a motion out of order—

(a) give reasons for the ruling; and

(b) for a ruling given under subsection (1)(a)—state how the ruling may be reversed by the persons present and entitled to vote on the issue.

(3) The persons present and entitled to vote may reverse a ruling given under subsection (1)(a) by passing an ordinary resolution disagreeing with the ruling.

(4) The reasons given by the person chairing the meeting for ruling a motion out of order must be recorded in the minutes of the meeting.

• The chairperson is only able to declare motions out of order where the elements of section 79 are satisfied and the 4 reasons put forward by the Chairperson for declaring motion 2 out of order are without substance, as these matters do not involve a conflict with the Act, Accommodation Module Regulation the by-laws or are otherwise unlawful;
• The process for nomination of committee members has no application to the way in which motion 2 proposed to replace the committee;
• The respondent has failed to demonstrate the existence of a requirement for the committee to fairly represent all members of the scheme and in any event owners could have voted “no”;
• motion 3 related to the decision whether or not to obtain legal advice in furtherance of investigations regarding the conduct of the committee members and did not authorise the commencement of any legal action. Therefore motion 3 did not need to be accompanied by quotations;
• in any event owners could have voted “no” to motion 3;
• in relation to the committee submissions 2.2 (e), (f) & (g) , the applicant reiterates that it would have been entitled to vote if not declared unfinancial;
• Mr. Scales has resigned from the Chairperson’s position following determination of a previous order made under Chapter 6 of the Act;
• The proper approach would be to permit owners to vote in respect of motions 2, 3 & 4 and if owners were opposed to motions, the vote would be in the negative.
  

DETERMINATION

The applicant, AM Rights Pty. Ltd. is the owner of lot 2 and also the Caretaking & Letting Agent. It is seeking the following final orders:

• An Order that the declaration by the Chairperson of the body corporate at the Extraordinary General Meeting held on 18 February 2009 that motions 2, 3, & 4 were “out of order” was invalid;
• An Order that the declaration by the Chairperson that the procedural motion considered by persons present at the Extraordinary General Meeting on 18 February 2009 pursuant to section 79(3) Body Corporate and Community Management (Accommodation) Module regulation 2008 was passed;
• In the alternative that Carolyn Doyle, Body Corporate Manager, Body Corporate Services Pty. Ltd., Cairns, Queensland be appointed an administrator to convene an Extraordinary General Meeting of the Body Corporate for the purposes of putting to owners for a vote, motions, in the same terms as Motions 2, 3 and 4 considered at the Extraordinary general Meeting held on 18 February 2009;
• Such further or other interim Order as the Adjudicator considers appropriate to give effect to the outcomes sought by the applicant in this application.
  

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

(c) a claimed or anticipated contractual matter about-

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

(ii) the authorization 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)).

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)).

The scope of section 276 was considered by Thomas J. in Independent Finance Group Pty Ltd v Mytan Pty Ltd & Anor [2001] QCA 306 in which he made the following observations:

Chapter 6 of the Act in which the provisions concerning the adjudicator’s powers are contained, is concerned with dispute resolution. The primary object of the Act is declared to be “to provide for flexible and contemporary communally based arrangements for the use of freehold land having regard to the secondary objects”. The secondary objects include flexible administrative and management arrangements for community titles schemes, and “to provide an efficient and effective dispute resolution process”. In this context it is not surprising to find a provision which permits a virtually direct managerial solution to defeat a certain type of unreasonable conduct that might otherwise frustrate an objective that could otherwise only be attained. Such a power may seem surprising to those used to the independent management of companies, but there seems little doubt that the legislature has here deliberately established a mechanism for the resolution of community titles scheme disputes in this way. The difficulty of obtaining remedies such as specific performance in the context of disputes which required some action to be taken by the body corporate, and the sometimes unsatisfactory nature of legal remedies in such a context must have been apparent.

This dispute is another incident arising out of the on-going animosity between the committee, the caretaking service contractor and their respective supporters. On the one hand, the committee which was previously chaired by Mr. Denis Scales, has been criticised for being excessively officious while on the other hand, there has been a significant degree of dissatisfaction with the caretaking service contractor and its staff, including allegations that it has failed to effectively perform its contractual obligations. Owner occupiers tend to be supportive of the committee and the previous Chairperson who, it is claimed, did much of the work which the caretaking service contractor should have done. It is further claimed that the applicant is being supported by members of his rental pool which is drawn from absentee owners who make up approximately 90% of lot owners, who are unaware of what happens on the site and provide “blind support” to the caretaking service contractor in order to maximise their rental returns.

Nevertheless, I believe it is clear from the decision of the District Court in Dindas & Anor v Body Corporate for One Park Road Ors [2006] QDC 302, that the power of an adjudicator to make an order that is just and equitable order to resolve a dispute under section 276, does not entitle an adjudicator to override other rights which lie behind, and form the basis of, voting rights. In the words of Wilson DCJ in Dindas & Anor v Body Corporate for One Park Road Ors [2006] QDC, the legislation plainly contemplates and permits a majority (determined by reference to voting rights granted by the Act) to assert its will by the legitimate exercise of that voting power.

As mentioned above, Motion 2 relates to the vacation of committee positions and filling of the positions by the process set out in section 37 of the Accommodation Module by the appointment of 7 named individuals to those positions. The reasons put forward for ruling the motion out of order were as follows:

• It does not allow voters to consider each nominee on his or her merits;
• It denies other eligible individuals the right to nominate;
• The proposed committee does not fairly represent all owners;
• The motion was proposed by the service contractor/ letting agent.
  

With respect, I am unable with this argument put forward on behalf of the committee.

Subsection 79 (1) of the Accommodation Module Regulation provides as follows:
Power of person chairing meeting to rule motion out of order

(1) The person chairing a general meeting of the body corporate must rule a motion out of order if

(a) the motion, if carried, would—

(i) conflict with the Act, this regulation or the by-laws, or motion already voted on at the meeting or

(ii) be unlawful or unenforceable for another reason; or

(b) except for a procedural motion for the conduct of the meeting, or a motion to correct minutes the substance of the motion was not included in the agenda for the meeting.

I am unable to see any basis upon which the motion, if carried out, would conflict with the Act, Accommodation Module Regulation or the by-laws, or would be otherwise unenforceable.

As mentioned above, Motion 3 was that independent legal advice is to be obtained by the body corporate to investigate the past conduct of the current committee but this motion was ruled out of order on the following grounds:

• It does not name a legal adviser or provide a mechanism for choosing a legal adviser;
• It did not include quotes to enable the body corporate to approve the expenditure;
• There is no provision for this expenditure in the current budget and there was no mention of a special resolution to raise funds for this proposal.
  

I believe it is quite plausible that the purpose of this motion was to make a preliminary decision as to whether or not legal advice should be obtained and was not an expenditure motion. In the event that the motion was carried, a further motion to engage legal representatives could be placed on the agenda for the next general meeting. Accordingly, I do not believe that this motion should have been ruled out of order.
Motion 4 was submitted by some 57 lot owners and read as follows:

That based on the findings of the investigation into the conduct of the current committee, further advice be sought for the issue of a claim for damages against individual members of the committee
as identified in the investigation.

While this motion reflects a high level of animosity between certain factions in the body corporate, I do not believe that this motion should have been ruled out of order. I do not believe that the motion, if carried out, would conflict with the Act, Accommodation Module Regulation or the by-laws, or would be otherwise unenforceable.

Again it is quite plausible that the purpose of this motion was to make a preliminary decision as to whether or not further legal advice should be obtained in the event that there was evidence of actionable misconduct by the committee. In my view, it is obvious that this motion does not purport to be an expenditure motion and therefore, I do not believe that this motion should have been ruled out of order.

The next matter that I turn to is the applicant’s claim that its procedural motion to reverse the Chairperson’s ruling that motions 2, 3 & 4 were invalid was dismissed on the basis that the applicant was “unfinancial” owing to indebtedness to the body corporate. This is disputed by the respondent which states that 3 procedural motions voted upon at the meeting in respect of the chairperson’s ruling for motions on motions 2; 3 & 4 and the results of the voting were as follows .

Re motion 2: No- 3, Yes- 5, Invalid- 1.

Re motion 3: No- 3, Yes- 5, Invalid- 1.

Re motion 4: No- 2, Yes- 5, Invalid- 1.

The respondent claims that the motion was put to the meeting (although only lots 2, 6, 21, 34, 66, 69, 73, 91 & 96 were represented in person at the meeting) and that the Chairperson was unaware that the owner of lot 2 was “unfinancial” until after the meeting and in any event, the results of the voting would have been no different if the vote by lot 2 was counted. This version is corroporated by the minutes of the meeting. Further, whether by chance or design, the majority of attendees supported the committee and therefore it is probably true that the results of voting on the procedural motions would have been no different if the vote cast on behalf of lot 2 had been counted.

However, I do not agree with argument put by the body corporate that if motions 2, 3 and 4 were resolved in favour, the result would be an absurdity because the new committee appointed pursuant to motion 2 would have to be investigated pursuant to motions 3 & 4. While it would have been preferable for the motions to have been placed in a different order, I believe that from an objective point of view, it would have been evident to a member of the body corporate that motions 3 & 4 related to the conduct of the previous committee rather than a newly appointed committee.

Having expressed my opinion that motions 2, 3 & 4 should not have been ruled out of order, the next matter for consideration is the actual results of the voting. On one hand, the applicant claims that the result of voting upon the three motions was as follows:

• Motion 2 - 65 votes in favour, 3 votes against, 1 abstention;
• Motion 3 - 44 votes in favour, 7 votes against, 8 abstentions;
• Motion 4 - 43 votes in favour, 9 votes against, 9 abstentions
  

However, the respondent body corporate states that the results of voting upon the motions were as follows:

• Motion 2 - 40 votes in favour,
• Motion 3 - 33 votes in favour,
• Motion 4 - 32 votes in favour,
  

I have reviewed the minutes of the meeting and note that voting papers were submitted by the following 61 lot owners: 3,4,5,8,9,10,12,13,14,15,20,22,23,24,26,27,28,29,30,31,34,35,36,37,38, 39 ,40,41,42,43,44,45,47,49,50,51,53,54,58,59,62,65,66,68,69,70,71,72,73,74,76,77,79,80,81,82 84,87,94,95 and 97.

The minutes record that voting papers for the following 15 lots were “invalid”: 5,9,14,20,24,36, 40, 44 ,49,59,62,79,81,87,95 (although a number of these lot owners have claimed that they were wrongly declared “unfinancial”).

The minutes also record that the owners of lots 2,21,34,66,69,73,& 91 were present at the meeting,: although it is noted that voting papers had been submitted for lots 34, 66,69 and 73.

The owner of lot 6 had given a proxy to the owner of lot 66 and the owner of lot 96 had given a proxy to the owner of lot 91.

Therefore, according to the minutes of the meeting, there were at least 46 valid voting papers. Had the motions not been ruled out of order, the owners of lots 21,91,6 & 96 could have voted upon the motions so that there would have been an additional 5 votes cast at the EGM in addition to the 46 votes cast by way of voting paper. Even if each of those 5 votes were cast in the negative, it is clear that the 3 motions would have been carried if they had not been ruled out of order. Such a result should not be surprising given that the motions were jointly submitted by the owners of some 57 lots out of a total of 98 lots.

Having regard to section 276(1) of the Act which gives an adjudicator power to 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 the exercise of rights or powers, or the performance of duties, under this Act or the community management statement”, I believe that it is appropriate for me to make the following orders:

• that the declaration by the Chairperson of the body corporate at the Extraordinary General Meeting held on 18 February 2009 that motions 2, 3, & 4 were “out of order” was invalid;
• that motions 2, 3 and 4 were carried and are deemed to be valid resolutions of the extraordinary general meeting held on 18 February 2009.