Sofia [2009] QBCCMCmr 292 (11 August 2009)

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

I hereby order that Jackie Harbottle, (the Applicant) is authorised to call and hold an annual general meeting (AGM) of the body corporate for Sofia out of the time period prescribed in the Standard Module.

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;
ceases immediately upon the appointment of a committee if that occurs earlier;
allows the Applicant to perform obligations of the secretary of the committee in respect of the calling and holding of the meeting, and, with others, to prepare proposed budgets for
adoption by the body corporate at the meeting; submit motions as necessary; and prepare the minutes of the meeting;
is subject to the Applicant following the procedures in the Standard Module governing giving notice of, and holding, an AGM, in particular, a notice requesting nominations for committee positions and submission of motions for consideration at the AGM must give owners at least three weeks to submit their nominations and motions, although the giving of notices and the holding of the AGM will not coincide with the end of financial year date of the body corporate.

This is an application dated 20th June 2009 by Jackie Harbottle (the Applicant) owner of Lot 4 in the scheme against the Body Corporate for Sofia CTS 10769 (the body corporate) for an order as follows –

“that all owners be involved and/or kept up to date with body corporate matters where committee is legally required to do so. As the newly appointed secretary I wish all matters be dealt with according to the “Body Corporate and Community Management Act 1997” This application is a part of commencing my new role and ensuring I will perform my duties to the best of my ability.”

The Applicant also seeks permission for her or the chairperson to call an annual general meeting for 11th July 2009.

“Sofia” CTS 10769 is a community titles scheme governed by the Body Corporate and Community Management Act 1997 (the Act) and the Body Corporate and Community Management (Standard) Module Regulation 2008 (Standard Module). There are six lots in the scheme created under a Building Unit Plan of subdivision.

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

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

(ii) the authorisation 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)).

In accordance with section 243(2)(a) Act submissions were sought from all lot owners.

Submissions in support of the application were made by Norma Evans, owner of Lot 3; Colleen Ford, owner of Lot 6; and by Justin Beduhn, owner of Lot 5. There was no submission from the owners of Lot 1.

The owner of Lot 2, Libertad Cortizo authorised Claudia Cortizo (Ms Cortizo) who is the occupier of Lot 2, to make a submission on his behalf. Ms Cortizo made a submission against the application.

Her submission contends that owners have been acting in committee positions without being lawfully elected; that no financial statements were been prepared for an annual general meeting called for 24th April 2009; lot owners had only five days notice of the proposed meeting for 24th April; another meeting was rapidly convened with three days notice when Ms Cortizo objected to the procedure for the first meeting; derogatory remarks and threats were made to Ms Corizo at this meeting about a former conciliation she had commenced at this Office resulting in reporting the threats to the police; that committee members who act unprofessionally should be dismissed; that the motions of the meeting of 24th April should be declared void; and that the minutes of that meeting were inaccurate.

Ms Cortizo refuses to make submissions to a sinking fund since it was unlawfully adopted and has therefore been held ineligible to vote as she owes a body corporate debt. She wants an adjudicator to address this. She refers to a conciliation at this Office concerning the sinking fund. She alleges that the sinking fund is being improperly used by committee members to maintain items which are not common property.

She seeks outcomes that the sinking fund levy is rejected and that she be exempted from paying into the fund meanwhile. She objects to the procedure employed for the convening of a general meeting on 11th August 2009, saying that nominations were not received by the end of the financial year, and that owners have not seen any financial statements.

This is, in effect, an application for a declaratory order that a body corporate might conduct its annual general meeting out of time. Section 66 Standard Module requires that an annual general meeting is held each year within three months of the end of the financial year. It appears that an annual general meeting has not been held in time, and that the body corporate has previously not followed correct procedure for the calling and holding of the annual general meeting.

The Applicant, acting as secretary of the new committee, now wishes to regularise the situation, and the committee wishes to perform its duties to the best of its abilities and in compliance with the legislation.

The submission of Ms Cortizo, whilst providing some background to the history of the scheme is not relevant. The scheme must hold an annual general meeting, and if it has not held one in the time required, it must make an application to this Office for the annual general meeting to be counted as such.

I therefore order that this scheme holds its annual general meeting as soon as practicable since the date of 11th July 2009 has now passed, within three months and in accordance with the legislation.

However, I make the following points, some of which have concerned Ms Cortizo. It is clear that the few lot owners in this scheme would benefit from some information about the legislation and what is required of them and the committee. This Office provides Fact Sheets and information free by telephoning 1800 060 119 and on line at www.bccm.qld.gov.au There is also on-line training available for all owners and committee members at that website. The legislation may be viewed on line http://www.legislation.qld.gov.au/Acts_SLs/Acts_SL_B.htm

The application states that the scheme is a “Small Scheme” (as governed by the Body Corporate and Community Management (Small Schemes Module) Regulation 2008) when in fact the scheme is recorded in the Land Title Registry as being governed by the Standard Module. The Standard Module is the most common of the ‘governing modules’ and has a high degree of prescriptive processes for the calling of both general meetings and committee meetings.

The Standard Module requires that where there are up to seven lots, then there should be seven people on the committee. A committee may function with a minimum of three persons, holding the ‘executive positions’ of chairperson, treasurer and secretary, or with one or two persons holding those positions and the second/third person being an ‘ordinary member’ but the aim in this scheme would be to have all six lot owners on the committee. Nominations should be sought prior to the notice of meeting and agenda being sent out for the general meeting, and if necessary nominations should be called from the floor of the meeting in an attempt to gain six committee members.

Committee members hold the position from one AGM to the next unless they are previously removed from office or retire etc. so at each AGM, new committee officers and ordinary members are elected as the last item of business.

Notice for a general meeting must be 21 days unless all lot owners unanimously agree that a shorter period of notice is acceptable.[1]

At the annual general meeting, the body corporate must consider the “statutory motions” which are as follows –

statutory motion, for an annual general meeting, means a motion about a following matter—
(a) presenting the body corporate’s accounts for the financial year;

(b) appointing an auditor of the body corporate’s accounts for the next financial year, or not auditing the accounts;
(c) adopting administrative fund and sinking fund budgets for the financial year;
(d) fixing contributions to be paid by the owners of lots for the next financial year;
(e) reviewing each insurance policy held by the body corporate.

Ms Cortizo is not registered as the owner of Lot 2 but is the occupier and has the consent of the owner to act on his behalf. A lot owner may nominate a family member to represent him or her on the committee, and in respect of giving an address. The owner remains liable for body corporate contributions however, and whether Ms Cortizo in fact pays the contributions is a matter between her and the owner.

Contributions to both sinking and administrative funds can only be raised by a vote at a general meeting in order for them to be enforceable. That is one of the main purposes of an annual general meeting to approve the budget set by the committee for the following year. The budget does not fail to be accepted if it is varied at the meeting by up to 10% either way. The committee may fix an interim contribution in certain circumstances, but only if that sum is set off against the final liability for each lot . (Section 141(3) Standard Module)

All owners, and “interested persons” as defined at section 205(6) Act, must have access to all body corporate records including financial records. Financial statements for the year must be included with the paperwork sent out with the notice for an annual general meeting. ( see “statutory motions” above.)

There is no merit in saying that the committee which is calling the meeting is not a legitimately elected committee. In a scheme which is not operating correctly, someone has to propose a take the step of calling the meeting. Owners must also be allowed to propose motions to the forthcoming annual general meeting in accordance with section 69(5) Standard Module.

This is not the forum to seek alternative outcomes to the one proposed by the Applicant. If Ms Cortizo is seeking other outcomes, or outcomes on other matters, she may make an application to this Office in the usual way.

Number of Scheme:	10769
Name of Scheme:	Sofia
Address of Scheme:	49 Duet Drive MERMAID WATERS QLD 4218

Queensland Body Corporate and Community Management Commissioner - Adjudicators Orders

Sofia [2009] QBCCMCmr 292 (11 August 2009)