Crystal Beach [2009] QBCCMCmr 287 (10 August 2009)

Last Updated: 17 September 2009

REFERENCE: 0739-2009

INTERIM ORDER OF AN ADJUDICATOR

MADE UNDER PART 9 OF CHAPTER 6

BODY CORPORATE AND COMMUNITY MANAGEMENT ACT 1997

Number of Scheme:	6119
Name of Scheme:	Crystal Beach
Address of Scheme:	329-333 Golden Four Drive TUGUN QLD 4224

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

Adam and Karin Whittington, the Owners of lot 7 and service contractors.

I hereby order that the application for the following interim order For the AGM to go ahead on 11 August 2009, with the agreed motion of the terms to stay as it is and the existing secret ballot votes from owners already submitted, to be counted. Is dismissed.

STATEMENT OF ADJUDICATOR’S REASONS FOR DECISION - REF 0739-2009

“Crystal Beach” CTS 6119

Application

This application is brought by the owners of lot 7 who are also the caretaking service contractors and letting agents for the scheme. The application was received by this Office on Thursday 6 August but required amendment which was made on the afternoon of Friday 7 August.

The interim order sought by the applicants is as follows:

For the AGM to go ahead on 11 August 2009, with the agreed motion of the terms to stay as it is and the existing secret ballot votes from owners already submitted, to be counted.

Background

As stated above, the applicants are the caretaking service contractors and letting agents for the scheme. They state that they became aware that their agreement had expired after last year’s AGM in August 2008, at which time it was resolved to change the regulation module applicable to the scheme from the “Standard Module Regulation” to the “Accommodation Module Regulation”.

The applicants requested the new committee to have a new agreement drafted and as this was not regarded as a matter of urgency, the committee has taken some 9 months to have a new agreement prepared. They state that 6 of the 7 committee members originally favoured a 20 year term for the caretaking and letting agreements but have subsequently been persuaded to provide lot owners with three options regarding the duration of the caretaking and letting agreements i.e. a 10 year term; a 15 year term; or a 20 year term.

Following receipt of the Agenda and Notice of Meeting, the former Chairman of the body corporate committee wrote to other lot owners stating that they should not vote upon motion 11. His letter raises a number of concerns including the following:

• Extending the caretaking agreement by 20 years to August 2029, or by 15 years to August 2024 is not necessarily in the interests of lot owners;
• The proposed caretaking agreement is poorly drafted and does not include a general obligation to maintain the property in good repair and in a clean and neat condition;
• The proposed caretaking agreement provides that the caretaker, rather than the committee can authorise work or repairs in an emergency situation.
• The proposed caretaking agreement purports to give exclusive use of an existing visitors’ car parking area to the caretaker without requiring payment by the caretaker;
  

The applicants state that the current committee is inexperienced and therefore influenced by the former Chairman of the body corporate and as a result, on 3 August 2009 the committee resolved as follows:

• That motion 11 proposed for the upcoming AGM be withdrawn;
• That the draft caretaking agreement be amended in certain respects;
• That the body corporate manager be instructed to arrange an EGM at which lot owners can consider a number of alternative motions to enter into new agreements with the applicants for various time periods.
  

On 5 August the committee advised the applicants that it proposed to withdraw the motion included on the agenda for the AGM regarding the Caretaking and Letting agreements. The committee also stated that it intended to call an EGM at which a motion with alternatives regarding the duration of new Caretaking and Letting Agreements with the applicants, would be considered.

Jurisdiction

“Crystal Beach” is a community titles scheme under the Body Corporate and Community Management Act 1997 (Act) and the Body Corporate and Community Management (Accommodation Module) Regulation 2008 (Accommodation Module).

In accordance with section 247 of the Act, the Commissioner for Body Corporate and Community Management has referred the application to me to decide whether the nature or urgency of the circumstances of the application warrant an interim order being issued. Section 276(1) of the Act provides that an adjudicator may make an order that is just and equitable in the circumstances to resolve a dispute, in the context of a community titles scheme, about a claimed or anticipated contravention of the Act; or the exercise of rights or powers, or the performance of duties, under the Act. An order may require a person to act, or prohibit a person from acting, in a way stated in the order (s276(2), Act).

Sub-sections 279(1) & (2) provide that -
(1) The adjudicator may make an interim order if satisfied, on reasonable grounds, that an interim order is necessary because of the nature or urgency of the circumstances to which the application relates.
Examples
1. The adjudicator may stop the body corporate from carrying out work on common property until a dispute about the irregularity of proceedings has been investigated and resolved.
2. The adjudicator may stop a general meeting deciding or acting on a particular issue until it has been investigated and resolved.
(2) An interim order
(a) has effect for a period (not longer than 1 year) stated in the order; and
(b) may be extended, varied, renewed or cancelled by the adjudicator until a final order is made; (c) may be cancelled by a later order made by the adjudicator; and
(d) if it does not lapse or is not cancelled earlier, lapses when
(i) the application is withdrawn; or
(ii) the commissioner gives the person who made the application a written notice under section 241 rejecting the application; or
(iii) a final order is made by an adjudicator to whom the application is referred. ...

Decision

Given the short timeframe that is available to consider this application, it has not been possible to seek submissions from the respondent i.e. the body corporate committee. While it is preferable that the respondent be given an opportunity to reply to an application before the making of a determination, the Body Corporate and Community Management Act 1997 does nevertheless permit me to make Interim orders on an ex parte basis.

An interim order will not be granted unless is it necessary due to the nature or urgency of the circumstances to which the application relates[1] and any order granted must be just and equitable in the circumstances.[2] In determining whether it is just and equitable to grant interim relief it is relevant to briefly consider whether the application raises any serious questions for final determination.
It is also relevant to consider whether any inconvenience likely to result from the
interim order is outweighed by the potential detriment alleged in the application.

In the circumstances I do not believe it would be appropriate for me to make the interim order sought. The agenda for the AGM states that the subject motion was proposed by the committee. The committee is therefore entitled to request that the motion be withdraw or alternatively, to move a motion for its withdrawal[3]. Further, given that a number of perceived deficiencies have been identified in the agreements, which would necessitate an extraordinary general meeting in any event, it is difficult to see how the balance of convenience would favour the making of the requested interim order.

For the above reasons the application for an Interim Order is dismissed.

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[1] Section 279 of the Act
[2] Section 276 of the Act
[3] See pp 154 -155 Horsley’s Meetings (5th Edition 2006)