Logancrest [2009] QBCCMCmr 205 (4 June 2009)

TAKE NOTICE that pursuant to an application made under the abovementioned Act by Charles Gibling, the Co-owner of Lot 8

I hereby declare that the annual general meeting of the Body Corporate for Logancrest held on 22 November 2008, and all resolutions purportedly passed at that meeting, were at all times void.

I further declare that the extraordinary general meeting of the Body Corporate for Logancrest held on 15 December 2008, and all resolutions purportedly passed at that meeting, were at all times void.

I further declare that the Body Corporate for Logancrest has not validly engaged a body corporate manager pursuant to any resolution at the invalidated meetings of 22 November 2008 or 15 December 2008.

I further order that the Body Corporate for Logancrest shall call and convene an annual general meeting for 2009 between 30 June and 30 September 2009, in accordance with the requirements of the Body Corporate and Community Management (Accommodation Module) Regulation 2008.

I further order that any owner wishing to submit motions for consideration at the 2009 AGM, including the reconsideration of any motions considered at the invalidated 2008 general meetings, should submit those motions in writing to the secretary for the Body Corporate for Logancrest by 30 June 2009.

I further order that Lance Mickelburgh and Michael Heslington shall be deemed to be the Committee for the Body Corporate for Logancrest, in the positions of chairperson/secretary and treasurer respectively, until the end of the 2009 annual general meeting.

I further order that the Body Corporate for Logancrest shall provide a copy of this order and the statement of reasons within fourteen (14) days of the date of this order.

Logancrest community titles scheme 21443 (Logancrest) consists of 26 lots and common property. The community management statement (CMS) for Logancrest indicates that the Body Corporate and Community Management (Accommodation Module) Regulation 2008 (Accommodation Module) applies to the scheme. Department of Natural Resources and Water records show the scheme is registered as Group Titles Plan 1114, and Group Titles Plan of Resubdivision 1210, 1265 and 1708.

Pursuant to the Body Corporate and Community Management Act 1997 (Act), this application was made by Charles Gibling, Co-owner of Lot 8 (applicant) on 16 January 2009. The applicant sought orders against the Body Corporate for Logancrest (respondent) in the following terms:

The outcome I am seeking is that the AGM of 27/11/08 and the EGM of 15/12/08 be voided as unconstitutional and recalled correctly. Proper notice was not given and missing or incorrect paperwork meant that a fair and true resolution was never possible and was in breach of the act.

Under section 243 of the Act, a copy of the application was provided to the Body Corporate, with an invitation to the Committee and all owners to respond to the matters raised by the application. Submissions were made by the eight owners and the Committee. The applicant did not avail himself of the opportunity to inspect the submissions received and make a written reply.[1]

A dispute resolution recommendation was made referring the dispute to departmental adjudication. I then investigated the dispute, pursuant to section 271 of the Act, which included reviewing the application and submissions and seeking further information as detailed below.

The application relates to the validity of the Annual General Meeting (AGM) of the scheme held on 22 November 2008 and the Extraordinary General Meeting (EGM) held on 15 December 2008. The circumstances, as outlined in the application and submissions, can be summarised as follows.

In regard to the AGM, the applicant says that the financial year for the scheme ends on 30 June and so the AGM is required by 30 September each year. However he says notices for the 2008 AGM were not mailed until 4 November, received on 6 November and the meeting held on 22 November. Alleged errors with the papers for the AGM include:

It appears the owners of 12 lots were present at the AGM, with no voting papers and the applicant apparently having two proxies (although the minutes do not state who for). Ten motions were voted on and a further five items of general business were discussed.

The applicant provides a copy of a letter from Monika Picton, the former director of Gepama Services, the Body Corporate Manager (BCM) for the scheme, dated 10 October (altered to 10 November), to the Committee. The letter advises that she had resigned but that the company would continue under new management, and that she had advised the Chairperson in May that she did not wish to renew the management contract when it expired in October 2008. The applicant says owners were not informed of this and were asked to renew her contract without any information as to who would be the actual manager, or the costs. He notes that Gepama Pty Ltd has no ABN, CAN or Queensland business number and so due diligence can be done on the company, The applicant also notes that no motion with alternatives were sent to members. A circular from Picton to all owners on 21 November notes that the scheme would need a new manager and suggesting three quotes be obtained including that of Gepama.

The applicant also says there was insufficient notice for the EGM and that no voting papers were sent for the EGM. He says interstate lot owners were given no information and were disadvantaged, with their wishes, proxies and emails disregarded. The applicant includes an email from owners who say their six proxies were refused by the Committee.

The minutes of the EGM record that the owners of eight lots were present, with proxies for a further six lots. The minutes noted that proxies do not count for Committee elections or body corporate management motions. Five voting papers were presented but all but one were excluded on the basis that the owners of the other voting papers were present. Nominations for Committee positions were considered and voted on with the positions of Chairperson, Secretary and Treasurer filled. Four proposals were considered for the appointment of a new BCM. The minutes record Gepama receiving 5 votes (although only four voters are recorded against that option) and the motion being carried in favour of Gepama. A further motion considered two alternative proposals for a gardener with one selected although no voting was recorded.

The applicant asserts that the issues are sufficient to warrant the invalidation of the AGM and EGM and for a new meeting to be held with proper notice and sufficient information. He also asks that guidance be given to the new Committee on how to run and manage an AGM and the legal requirements to allow fair and open decision-making.

Considerable email and letter correspondence appears to have occurred between the applicant, all owners and the former Chairperson (Andrew Heslington), the current Secretary/Chairperson (Lance Mickelburgh) and the BCM (Amirea El Abbassy). Some issues appear to have arisen regarding correspondence not being responded to, and emails and mail being sent to personal addresses rather than through the Body Corporate.

The submission from the Committee by the Chairperson/Secretary says the Committee accepts that the applicant is correct in his ‘general theory’ but should have approached the previous and current Committees in a manner that could have generated discussion with a ‘comprehensible overview of his grievances’. They indicate difficulty in understanding the applicant’s concerns. In regard to substantive issues, the submission notes that an increase in levies was discussed at the AGM, with the applicant present, but no vote has been taken. In his submission in his capacity as an owner, the Chairperson/Secretary expresses concern regarding the conduct and approach of the applicant, including his refusal to engage in discussion and his handling of correspondence.

The submission from an owner who it appears is also the BCM includes the following comments:

The owner who was elected as Chairperson at the EGM says he resigned a week later because of owner dissatisfaction. He details communications with the applicant and the Commissioner’s Office, noting concerns with the manner of the applicant’s communications and some difficulty in responding to the applicant’s communication. While he says he believes that there has been no wrongdoing and had no problem following the information supplied for both meetings but acknowledged that does not know the rules and regulations and accepts that the matter should be fixed if the complaints are correct. However, he suggests that blame is being cast on the new Committee for actions that were not their doing (as they did not prepare the AGM or EGM), and notes that the Committee is voluntary and relies on the manager for assistance.

Another owner (also the Treasurer) similarly says he attended both meetings and could not say that there was any wrong doing but he has no problem with action being taken rectify any problem found. He does query why the AGM was not challenged before the EGM, and disputes that there was a vote to increase levies as the first levy notice for 2009 does not show an increase.

Another owner says he does not agree that the site is a health hazard or that he has been financially disadvantaged. He suggests four weeks notice be given for the next AGM.

At my request a member of the Commissioner’s Office contacted the BCM to request copies of various meeting papers and details of when notice of the two meetings was given.

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:

(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.[3] An adjudicator's order may contain ancillary and consequential provisions the adjudicator considers necessary or appropriate.[4]

This application raises several issues regarding the validity of the AGM and EGM in late 2008. I have identified some further issues. I will outline some of the legislative requirements for body corporate meetings. I will consider whether there has been any non-compliance with these requirements and, if so, whether that non-compliance is a basis for invalidating the two meetings.

I would make the general observation that the detailed provisions of the body corporate regulations make it almost inevitable that from time to time there will be non-compliance with the legislation. The courts have commented that non-compliance of an insubstantial nature should not be imperil the actions of bodies corporate or their committees, particularly in the instance of committees where actions are taken in good faith[5]. Adjudicators have found that where there have been minor errors, omissions or other irregularities in meeting procedures, the meeting and the decisions made at the meeting should nevertheless be preserved, unless it can be shown that there has been some disadvantage to voters (owners). So the factors to consider are the requirements of the legislative provision, how substantial the non-compliance was, whether any owner’s right to vote was impeded, and whether the non-compliance is likely to have affected the result of the meeting or any motions considered at the meeting.

Section 72 of the Accommodation Module provides that a general meeting must be held ‘at least’ 21 days after notice of the meeting is given to the owners of lots. Section 68(1) provides that the notice must be given to each owner personally or sent to their address for service[6].

Section 38(1) of the Acts Interpretation Act 1954 provides for the reckoning of time in legislation and indicates that the words ‘at least’ in section 72 mean that both the day on which notice was given and the day of the meeting itself are excluded in cal;culating the 21 day period. This means that for a meeting on 22 November, notice must have been given no later than 31 October. Similarly, for a meeting on 15 December, notice must have been given no later than 23 November.

Furthermore, if the notice of general meeting was sent in the post then sections 39A(1)(b) and (3) of the Acts Interpretation Act 1954 provide that it would be deemed to be ‘given’ at the time at which the notice would have been delivered in the ordinary course of post unless the contrary was proved (such as evidence showing that the item was not in fact delivered until later). Therefore notice is given on the expected postal delivery date rather than the date it was actually posted. The standard delivery time for a large envelope would differ depending on the destination and could be checked with Australia Post. But with some owners living interstate, I would consider that at least two working days should be allowed. For the AGM then, notice should have been posted by 28 October, to arrive by 30 October (with 31 October being a Saturday). For the EGM, notice should have been posted by 20 November. I would note that to avoid difficulties with service of notices, bodies corporate should consider giving notice earlier rather than at the last minute.

The difficulty in this matter is that it is unclear when notice of the two meetings was actually given. The applicant says they were both late but gives no specifics. In regard to the AGM, he refers only to the date on the footer on the bottom of one the meeting papers for the AGM. I consider that a computer-generated date of this nature is suggestive but certainly not definitive evidence. The applicant gives no information regarding the EGM. He does not indicate when he received either papers. There appears to be no other evidence demonstrating when notice was in fact given.

The BCM is unclear as to when the AGM notice was given. She says that working backwards from the applicant’s letter of 4 November 2008 she estimates that notice was probably sent on 30 October or 1 November 2008. Moreover, she says she reviewed the financial data on 29 October. On the basis of this information, I am satisfied that in all probability notice of the AGM was late. It is difficult to be definite, but it seems that the notice was between 2-4 days late.

In regard to the EGM, the BCM says she ‘believes’ that notice was sent on 28 November 2008. She says this was two days later than scheduled because they were waiting for a response from the applicant on certain matters. However, if the BCM is correct in regard to this date, the EGM notice was sent over a week later than required.

When considering the appropriate action to take when late notice has been given, adjudicators balance the degree of non-compliance (that is, how late was the notice) and the impact on owners of the late notice. In this case the applicant has given no indication that he was personally prejudiced by any late notice. Clearly he attended and voted at both meetings. No other owner has made a submission indicating that they were unable to attend or vote at either meeting because of inadequate notice, or that the curtailed notice affected their capacity to properly consider or seek advice on any of the motions.

A range of issues arise regarding the conduct of the AGM and EGM, particularly with regard to the contents of the meeting notice.

Section 68 of the Accommodation Module provides for meeting notices. The notice must be in writing and include the following:

Other documentation required to be included in the meeting notice (with reference to the Accommodation Module) includes:

In regard to the agenda, I note that the Committee must set the agenda (section 74 of the Accommodation Module). As with all Committee decisions, this means that the Committee must have a meeting conducted in accordance with sections 44 to 55 of the Accommodation Module, or must make the decision by voting outside a committee meeting pursuant to section 54 of the Accommodation Module.

The agenda for an AGM must include certain statutory motions, including the requirement to adopt administrative and sinking fund budgets (section 137 of the Accommodation Module); fixing the financial contributions to the paid by lot owners (section 139 of the Accommodation Module); determining whether to audit the next years financial accounts, which must be in the specific form set out in the regulations (section 153 of the Accommodation Module); and reviewing insurance (section 175 of the Accommodation Module). While owners may choose to discuss ‘general business’ at a general meeting, this discussion is not a formal part of the meeting. No binding resolution can be passed in respect of substantive motion[7] that was not specifically included on the agenda and voting papers (section 175(5) of the Accommodation Module).

It is clear that there are numerous defects with the form and contents of the meeting notice for both the AGM and EGM. It is not necessary to detail each of the defects because for each meeting there is a substantive issue which on its own is a sufficiently serious breach of the legislative requirements that it is prejudicial to owner’s voting rights and warrants the invalidation of the entire meeting.

In regard to the AGM, the fundamental issue is that it is not apparent that the agenda or voting paper actually provided owners with the text of the motions to be considered at the meeting. When requested to provide a full copy of the meeting notice, the BCM provided a blank voting paper template in which there was no wording provided for any motion. When some owner’s completed voting papers for the EGM (apparently using, as directed, voting papers from the AGM, they hand wrote in the subject matter of the motion or their preferred alternative into a blank voting paper with their vote. While the applicant has provided a document which looks like a voting paper and has some sort of text for each motion, this appears to actually be minutes of the AGM. I am at a loss to understand how the Committee or the BCM consider that a valid decision could be made when owners have not actually had an actual question put to them in writing to decide on. Perhaps the text of the motion was simply read out at the AGM. However, this is clearly contrary to the legislative requirements. Moreover, it obviously disenfranchises the majority of owners who did not attend the meeting, and prevented those owners submitting a meaningful voting paper. Owner must be given the same entitlement to contribute to a decision on issues before the Body Corporate whether they are able to, or wish to, personally attend a meeting.

In regard to the EGM, the fundamental defect is that no proper notice of meeting was issued at all. Rather, an unsigned and undated slip of paper was sent as a covering note with an assortment of documents comprising quotes for BCMs, quotes for a gardener and the BCM’s comments on the applicants proposed BCM. The slip said “There will be a second meeting of all members of the body corporate on site on the 15th of December at 5.30pm to conclude this business and to vote in committee members”. It directed owners to use the proxy and voting papers sent with the AGM and to “send these to myself ASAP” although there was no indication of who ‘myself’ was or the address for the return of proxies and voting papers.

This slip fails to comply with almost every requirement of a meeting notice. If this document was prepared by the BCM, as is implied, it raises serious questions for owners as to why they are engaging and remunerating an individual or company as a BCM who could prepare such a manifestly inadequate document. The suggestion that owners use AGM voting papers to vote on the EGM motions (which were not actually specified in any event) was highly inappropriate. Aside from being contrary to the legislation, it relied on owners having retained those previous papers.

While I do not intend to document every other failing with these meetings, there are some further obvious defects which I will comment on below.

The Committee must comprise (in this scheme) not less than three voting members and not more than seven[8]. A BCM is automatically a member of the Committee but cannot vote[9]. A person can hold up to two of the executive positions (chairperson, secretary and treasurer) in conjunction. The eligibility for Committee membership is set out in sections 11-12 of the Accommodation Module.

Under section 14(1) of the Accommodation Module, a committee election must occur at each AGM. At least 3 weeks before, but not more than 6 weeks before, the end of the financial year the secretary must serve a notice on all owners inviting written nominations for committee membership. Nominations must be submitted by the end of the financial year. The Committee election must follow the process set out in sections 17 to 28 of the Accommodation Module, unless the Body Corporate passes a special resolution agreeing to an alternative election processes. It does not appear that there was a call for nominations for committee membership in 2008. Moreover, it is unclear why no election occurred at the 2008 AGM. While there were apparently no nominations received prior to the meeting, the person chairing the meeting should have called for nominations from the floor, pursuant to section 26 and 27 of the Accommodation Module.

I note that if at least one person is elected to the Committee at the AGM but there is at least one vacant executive position vacant or the total number of committee members is less than three, an EGM must be called within one month of the AGM and held within two months of the AGM to seek to fill the vacancies on the Committee. These processes are provided for in section 29-32 of the Accommodation Module. However there is no indication that the EGM election occurred because there were no nominations at the AGM. I note that the BCM makes brief reference to adjourned meetings, however there is no indication in any minutes that the EGM was or purported to be an adjourned AGM and moreover there is no legislative provision for adjourned general meeting except under section 80 of the Accommodation Module where there is no quorum.

Even if the election legitimately occurred at the EGM it was flawed. The Committee election must be the last item of business for the meeting[10], rather than the first items as occurred at the EGM. Ballots are only required if there are more nominations than the required positions, and so there was no requirement for a vote in respect of the election of the secretary and treasurer at the EGM. Further, there was no attempt to fill the remaining four ordinary member positions.

Sections 36-40 of the Accommodation Module provide for filling casual committee vacancies. In the case of the resignation of the chairperson in December 2008, this vacancy could only be filled by the Committee if the composition of the Committee had not fallen below the minimum number. However as the resignation of the Committee left only two voting members who had been elected at the EGM, the remaining Committee was required to call a further EGM to fill the vacancy.

In light of these numerous issues, and my findings on the invalidity of the EGM, there are issues with the validity of the current Committee appointments. Moreover, the Committee now comprises only two members, below the minimum number of three and well short of seven. I would however refer owners to section 100(4) of the Act which provides that the decision of persons purportedly acting for the committee, who honestly and reasonably believe they are the committee for the body corporate, will be taken to be a decision of the committee notwithstanding a defect in the election of one or more of the committee members. Therefore the invalidation of the Committee election does not of itself invalidate any decisions of the Committee that were made in good faith.

The EGM purported to appoint Gepama Pty Ltd as the BCM for the scheme. Pursuant to section 112 of the Standard Module a body corporate may engage a BCM by passing an ordinary resolution in which no votes are exercised by proxy. The material forwarded to members for the meeting (that is, in the notice of meeting) must set out the terms of the engagement including when the engagement would begin and end and any right or option to extend or renew the engagement. The contract of engagement must be in writing, specify the term of the engagement, set out the functions of the BCM, state the basis for working out payment, and state any powers of any executive member of the committee that the BCM will be authorised to exercise[11]. The term of a BCM’s appointment, including any rights or options to extend or renew, must not exceed 3 years[12].

If the total expenditure of the engagement of the BCM will be over the major spending limit for the scheme, at least two quotes must be provided to the meeting[13]. However, multiple quotes can be considered even if the cost of the engagement will be less than the major spending limit. If multiple quotes are considered, the motion must be framed as a motion with alternatives pursuant to section 71 of the Accommodation Module.

Even if the EGM was not otherwise invalid, I am of the view that the purported resolution to appoint a BCM at the EGM could not have been a valid resolution. It is unclear what term the motion is purporting to seek agreement to, with no indication of term in the quotes from Midwood and Gepama, a one year term in the Brisdon quote, and a three year term in the Ace quote. It is also difficult to ascertain the actual costs for the Midwood quote as it has been annotated by hand. Moreover, as there was no proper written motion, the motion was also not properly framed in accordance with the specific requirements for motions with alternatives.

Section 64 of the Accommodation Module provides that an AGM must be called and held within three months after the end of the scheme’s financial year. If the financial year for this scheme is 30 June (as indicated by the applicant and the financial statements in the AGM papers)[14] the AGM must be held by 30 September each year. Time limits for AGMs ensure certainty, accountability and accessibility to information regarding the operation of the scheme.
It appears that the 2008 AGM was held nearly two months late, and that the 2007 AGM was also late. This is certainly not ideal and does of itself raise doubt over the validity of the AGM and its resolutions. That said, it is not necessarily appropriate to invalidate an AGM solely because of a delay in conducting that meeting, particularly because any replacement meeting would be even further out of time. From time to time unavoidable circumstances arise that mean bodies corporate are legitimately unable to conduct meetings within the legislative timeframe. When applications are lodged prior to a meeting that are expected to be overdue, adjudicators would often make an order, after evaluation of the circumstances, determining that the meeting is not invalid simply because it is held out of time. However all owners should endeavour to ensure that in future AGMs are held by 30 September.

Concerns have been raised that proxies were excluded at the EGM. Given that the AGM and EGM are clearly invalid, it is not necessary to investigate further or make a conclusive finding on whether purported proxies were valid or were validly excluded.

The use of proxies at general meetings, including the format and delivery, is provided for in section 104 to 109 of the Accommodation Module. In particular, I note that a proxy must be in the approved form (BCCM Form 6) and must be given to the secretary (by hand, post or facsimile) before the commencement of the meeting at which it is to be exercised. Given the number of lots in this scheme, a person cannot hold more than two proxies. If a proxy fails to comply with these legislative requirements, the proxy should not be accepted and votes purportedly cast on the basis of the proxy should be exclusive.

A proxy cannot be used in a range of circumstances including, relevant to this dispute, for the election or appointment of a committee member or on a motion approving the engagement of a BCM. This means that the person chairing the EGM was entitled to exclude votes purportedly cast by a person holding proxies because the only motions to be considered at that meeting we motions which were unable to be voted on by proxy votes. However, proxies votes should not have been excluded in regard to the vote on the gardener, unless they were otherwise non-compliant.

The minutes of the EGM indicate that four voting papers presented to the meeting were excluded on the basis that the voters were present. Section 84 of the Accommodation Module provides for the exercise of a vote at a general meeting. A voter may cast their vote either personally at the meeting, or by written voting paper given (by hand, post or fax) to the secretary before the start of the meeting, or by proxy[15]. A written vote can be withdrawn by an owner (but not their proxy) at any time before the result is declared. These provisions mean that there is nothing to prevent owners who are present at a meeting from voting by voting paper. Such owners are entitled to rely on their voting paper although they can choose to withdraw their written vote for any motion and cast an alternative vote before each motion is declared. On this basis it would seem that voting papers were invalidly excluded at the EGM.

Pursuant to section 94 of the Accommodation Module, ‘full and accurate’ minutes of a general meeting must be given to all owners within 21 days of the meeting. It is inappropriate to refer to motions being ‘moved’ or ‘seconded’ as this is not a process provided for in the legislation. Rather the minutes must specify who submitted the motion, which must be done in accordance with section 67 of the Accommodation Module. Further, the minutes must always record the actual number of votes for and against each motion, and abstentions. In this respect, the minutes of both the AGM and EGM are defective.

The applicant disputes the capacity of the Body Corporate to approve a sinking fund budget when it has not obtained a sinking fund forecast.

The basic concept of the sinking fund is that a body corporate identifies future major maintenance requirements; estimates when the maintenance will fall due; allocates the likely cost of each maintenance event evenly over the intervening years; and levies those amounts on owners each year so that when each maintenance event falls due there are earmarked funds already accumulated to enable the work to be carried out. Section 137(3) of the Accommodation Module provides that the sinking fund budget must allow for raising a reasonable capital amount both to provide for necessary and reasonable spending from the sinking fund for the financial year, and also to reserve an appropriate proportional anticipated major expenditure over at least the next 9 years after the financial year, having regard to: anticipated expenditure of a capital or non-recurrent nature; the periodic replacement of items of a major capital nature; and other expenditure that should reasonably be met from capital.

However, there is no legislative concept of or requirement for a ‘sinking fund forecast’ as such. Therefore the Body Corporate can set budgets without a specific sinking fund forecast. However, sinking fund forecasts are generally the way in which a body corporate determines the estimates necessary to set its sinking fund budget. Commonly such forecasts are obtained by external professionals. While the sinking fund budget operates on a year to year basis, the forecast is more general in that its scope is a ten year period.

Once a body corporate has made a decision regarding its projected expenditure requirements (adopting the recommendations in a forecast or otherwise) and agreed on a sinking fund budget on that basis, it can not deviate from the budget (excepting section 138 of the Accommodation Module). Unless owner pass new resolutions to amend previous budgets and adopt new budgets, monies collected through owner contributions on the basis of the sinking fund budget are for a particular purpose and should only be spent on that purpose. However a body corporate could reasonably decide that budgeted works are not necessary when they fall ‘due’, and may reprioritise expenditure on more ‘urgent’ items.

The fact that there are insufficient funds in the sinking fund does not mean that required work cannot be done. In fact, if they are part of the maintenance responsibility of the body corporate they must be undertaken. Section 139 of the Accommodation Module provides for special levies to be passed to pay for liabilities for which no or inadequate provision has been made in the budgets.

References have been made to an issue relating to driveway resurfacing. The issues are unclear and the applicant has not sought any orders on this issue. As such there is no basis for me to consider the matter further. However I will note that if the applicant seeks specific action to be taken on this matter, he should submit an appropriate motion to a future general meeting, including quotes for works he considers is required.

If the issue relates to the Body Corporate’s obligation to maintain the common property in good and structurally sound condition, pursuant to section 157 of the Accommodation Module, the Body Corporate cannot simply choose to ignore the matter if the work is genuinely required. However, if the issue is not maintenance but relates to a proposal to make an improvement to common property, it will be for owners to decide whether they wish to make that improvement with an appropriate resolution pursuant to section 161 of the Accommodation Module.

There has been much comment in submissions regarding communication between the applicant and Committee members.
While many committee members in bodies corporate accept mail and email to their personal addresses, I consider it entirely acceptable for committee members to determine that they should only be contacted (except, perhaps in emergency circumstances) through the body corporate’s mailing address and a general email address (such as the BCM’s email address). Where such protocols have been clearly advised to owners, owners should respect such requests. If an owner continues to ignore requests it would not be unreasonable for communications to be returned with a request to redirect them to the specified address.

I would note that it does not appear that the applicant’s approach to communication with the Body Corporate and its members has assisted in this matter. I found some of his material confusing and lacking in specific details and can see that others may have been unsure of his various communications to them. While the applicant may well be genuinely attempting to ensure that the scheme is administered in the best interests of all owners, and he has identified genuine issues, I would encourage him to take a less confrontational approach and to respect the wishes of Committee members regarding addresses for correspondence. I encourage all owners to put past conflict behind them and to work constructively and openly together in future.

It does appear that there is a general lack of understanding of many of the legislative requirements in regard to meetings and other areas of body corporate administration by past and present committee members and other owners, including the applicant. This is not uncommon and is not surprising given the complexity of the legislation governing bodies corporate. Moreover, I have no evidence that any person has not acted genuinely in attempting to administer the body corporate, or that there has been any deliberate intent to subvert or avoid the legislative requirements.

That said, there appear to be numerous examples where this scheme has not followed the legislative requirements, particularly with regard to meeting procedures and committee elections. It is in the interests of all owners that all parties make a greater effort in future to ensure that these requirements are complied with. These processes exist to ensure fair and open participation and decision-making in regard to the administration of the Body Corporate.

I would encourage all owners to avail themselves of the Information Service provided by the Commissioner’s Office to improve their understanding of their legislative rights and responsibilities. Committee members in particular should be aware of the Code of conduct for committee voting members[16] and that they are required to have a commitment to acquiring an understanding of the Act relevant to their role on the committee, and to take reasonable steps to comply with the Act in performing their duties. The Information Service provides a range of factsheets and other publications, which are available online (www.bccm.qld.gov.au ) or can be mailed out. The Service also has a freecall information line on 1800 060 119. The Service runs public seminars and has an online training course which is targeted at Committee members but which is useful for any owner wishing to improve their understanding of the legislation. Currently there are modules on committees, general meetings, financial management, maintenance and by-laws.

I am satisfied that there have been numerous defects associated with the conduct of the AGM and EGM in 2008. While less than the required 21 days notice of the meetings were given, there were more substantive defects in the form and content of the meeting notices, particularly the failure to put the motions for consideration at the meetings to owners in writing prior to the meetings. For these reasons I am satisfied that the meetings are invalid and have made an order to that effect.

To avoid doubt I have also ordered that all resolutions passed at those meetings are invalid. Given that a key issue at the EGM was the appointment of the BCM, I have also made a specific order making it clear that this purported appointment was not valid for the range of reasons outlined.

It will be necessary for the Body Corporate to hold another meeting to reconsider essential business from the invalidated meetings. The Body Corporate is already required to hold its 2009 AGM at some time between 30 June and 30 September. It would be unnecessarily onerous for the Body Corporate to be required to hold two general meetings within a short period, and so I consider that any necessary motions from the invalidated meetings can be included on the 2009 AGM agenda. However I would encourage the Body Corporate to hold its 2009 AGM as soon as reasonably practical after the 30 June end of financial year.

Although the invalidation of the EGM has the effect of invalidating the election of the current Committee members, it is necessary to provide for the administration of the scheme until the 2009 AGM and for someone to be authorised to call and conduct the 2009 AGM. In the circumstances, I consider that the maintenance of the status quo is appropriate. Accordingly I have made an order deeming that the current Committee members, Mickelburgh and Heslington, can continue in their Committee roles until the end of the 2009 AGM. This will enable them to maintain the basic administration of the scheme and to call the 2009 AGM, notwithstanding the defects in the meeting which elected them.

It will be the responsibility of the Committee to set the agenda for the 2009 AGM. They should ensure that those statutory motions required at the 2008 AGM are included along with those required for 2009. However, because there is some uncertainty over the origin, form and wording of other motions, I will not require that all other motions purportedly considered at the 2008 AGM and EGM be automatically re-listed on the 2009 AGM agenda. Rather, the onus is on owners to resubmit motions that they wish to have reconsidered by the end of the financial year, or the Committee to choose to re-list matters. This will include a requirement that owners or the Committee to resubmit proposals for the appointment of a BCM, if appropriate, however if any of the quotes considered at the EGM are reconsidered, it may be necessary to clarify some of the matters discussed above.

Where a motion has been submitted in writing by an owner, the wording of the motion must be replicated in the voting paper[17]. However for all other motions, the Committee should carefully consider the appropriate wording of the motion. Motions should clearly set out exactly what question owners are being asked to decide and should be readily understandable by an owner who is not familiar with the background or circumstances of the issue. I note that some of the motions as recorded in the minutes of the 2008 AGM and EGM appear to have lacked necessary detail or failed to comply with the requirements of statutory motions. Accordingly, the Committee should not simply duplicate invalidated motions from the 2008 meetings.

While I have detailed many of the requirements for the conduct of an AGM, I would encourage the Committee to consider seeking assistance, advice and information from appropriately qualified sources when preparing the meeting papers for the 2009 AGM to ensure that the legislative requirements are adhered to. The Commissioner’s Information Service is one source of information, and I particularly refer the Committee to the proxy form for general meetings (BCCM Form 6) and the AGM notice form (BCCM Form 4) on the Information Service website.

Finally, so that all owners are aware of the circumstances arising in this dispute, and are fully informed before submitting motions to the 2009 AGM, making nominations for Committee membership, and voting at the 2009 AGM, I have made an order requiring a copy of this order and the statement of reasons to be provided to all owners within fourteen days.

[1] See sections 246 and 244 of the Act respectively
[2] See sections 227, 228, 276 and Schedule 5 of the Act
[3] Section 276(2) of the Act
[4] Section 284(1) of the Act

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

[6] Under section 192 and 193 of the Accommodation Module, the address for service is the address last notified to the body corporate by an owner.

[7] An exception applies to procedural motions for the conduct of the meeting, a motion to amend a motion, and a motion to correct minutes.
[8] Section 10(4) of the Accommodation Module, and the definition of ‘required number’.
[9] Section 13 of the Accommodation Module
[10] Section 25(1) of the Accommodation Module
[11] Section 114 of the Accommodation Module
[12] Section 116 of the Accommodation Module
[13] Section 150 of the Accommodation Module

[14] As this scheme was established prior to the commencement of the current Act in 1997, and there has been no adjudicator or referee order changing the financial year end date, the financial year is determined to end on the last day of the month in which the first AGM for the scheme was held.
[15] Electronic voting can also be acceptable if the body corporate has so decided by ordinary resolution.
[16] See section 101B and Schedule 1A of the Act

[17] However, under section 79 of the Accommodation Module, a motion which is poorly worded or provides insufficient detail could potentially be ruled out of order by a chairperson if the motion would conflict with the legislation or a motion already voted on at the meeting, or would otherwise be unlawful or unenforceable.

Number of Scheme:	21443
Name of Scheme:	Logancrest
Address of Scheme:	24 - 26 Chambers Flat Road, WATERFORD WEST QLD 4133

Queensland Body Corporate and Community Management Commissioner - Adjudicators Orders

Logancrest [2009] QBCCMCmr 205 (4 June 2009)