Rosebank [2009] QBCCMCmr 296 (14 August 2009)

Last Updated: 17 September 2009

REFERENCE: 0566-2009

ORDER OF A REFEREE

MADE UNDER PART V

BUILDING UNITS AND GROUP TITLES ACT 1980

Name of Plan:	Rosebank
Number of Building or Parcel:	3033
Address of Parcel:	QUEENSLAND

TAKE NOTICE that pursuant to an application made under sections 76 and 77(1) of the Building Units and Group Titles Act 1980 by Malcolm Phillipps, the Owner of lot 91

I hereby order that the application for an order that:

“The Extraordinary General Meeting of Rosebank GTP 3033 on 15th May be held invalid, and that a new meeting be called as soon as practical following the release of the Government Legislation relating in particular to the maximum time that a contract can be entered between a Body Corporate and a Body Corporate Manager. ”

is dismissed.

STATEMENT OF REFEREE’S REASONS FOR DECISION - 0566-2009

“Rosebank”

Rosebank is a residential body corporate within the Hope Island Resort complex which was developed under the Integrated Resort Development Act and is therefore regulated by the Building Units and Group Titles Act 1980. In total there are 144 lots within this residential body corporate.

APPLICATION

The applicant is the owner of lot 91 and submitted this dispute resolution application under the Building Units and Group Titles Act 1980 with this office on 17 June 2009. The application relates to an Extraordinary General Meeting for Rosebank hd on 15 May 2009.

The order sought is that:

“The Extraordinary General Meeting of Rosebank GTP 3033 on 15th May be held invalid, and that a new meeting be called as soon as practical following the release of the Government Legislation relating in particular to the maximum time that a contract can be entered between a Body Corporate and a Body Corporate Manager. ”

BACKGROUND

The applicant states that he attended the Extraordinary General Meeting of Rosebank GTP 3033 on 15th May 2009 and at the commencement of the meeting, he moved that the meeting be adjourned because of “the imminent release of new legislation by both Federal and State Governments affecting contractual arrangements the subject matter of this meeting”. The applicant further states that the Chairman informed him that the motion was rejected before there was opportunity for the motion to be seconded.

The applicant believes that in accordance with “Horsley’s Meeting Procedure” he was legally entitled to move a motion to adjourn the meeting and that there was no urgency in dealing with the motion regarding entry into a new Management Agreement.

Prior to considering this application, submissions were sought from the body corporate committee and all other lot owners. Submissions were received from the Chairman of the body corporate committee, the body corporate manager and three individual lot owners.

The body corporate Chairman advised as follows:

• As soon as he opened the EGM the applicant requested that he adjourn the meeting;
• When he refused to adjourn the meeting, the applicant asked what section of the Act the Chairman was relying upon and the Chairman referred him to clause 2(9) of the Second Schedule which provides that the Chairman may adjourn a meeting;
• As the Chairman was aware of the applicable legislative provision there was no need for his solicitor to speak on his behalf;
• A management agreement was already in place at the time of the meeting and the “proposed legislation” referred to by the applicant would not affect that contract is the legislation would not have a retrospective application;
• New agreements were proposed to shorten the term of the existing contract and to reduce levies payable by lot owners;
  

The body corporate Secretary advised as follows:

• After the meeting opened the applicant declared that the meeting should be adjourned;
• The chairman referred to Schedule 2, clause 2 (9) Building Units and Group Titles Act 1980 which provides as follows:

The chairperson of a general meeting may with the consent of the meeting adjourn any general meeting

• The Chairman considered that out of the 90 lots represented by voting papers, proxies and present in person, and the fact that only 3 persons were voting from the floor, the request from one owner to adjourn the meeting would not be in the interests of owners who were not present. He therefore ruled that the grounds proposed by the applicant were speculative and the action sought was unwarranted as he had the opportunity to lodge a “no” vote if he disagreed with the motion;
• The Chairman also believed that clause 1(6A) of the Second Schedule to the Building Units and Group Titles Act 1980 was applicable as that clause states:

A person is not entitled to submit a motion for inclusion in the agenda of a meeting, to move a motion at the meeting or to nominate a person for election as the chairperson, secretary or treasurer of the body corporate or a member of the committee unless the person is entitled to vote on that motion or in that election.

Three lot owners made submissions which included the following:

• They believed that proposed legislation would limit the term of management agreements to 3 years and the applicant sought to have the meeting adjourned until the legislation was passed by parliament;
• They felt that they were being pressured into entering 10 year contracts before the passage of new legislation
• They believe that tenders should have been sought before making a decision to enter into a new management agreement;
• They are concerned about the use of proxies to secure votes in favour of the management agreement.
  

DETERMINATION

The order sought by the applicant is that:

“The Extraordinary General Meeting of Rosebank GTP 3033 on 15th May be held invalid, and that a new meeting be called as soon as practical following the release of the Government Legislation relating in particular to the maximum time that a contract can be entered between a Body Corporate and a Body Corporate Manager. ”

As stated above, the Building Units and Group titles Act 1980 (the Act) applies to this scheme. Part 5 of that Act concerns disputes and division 3 of Part 5 makes provision for orders by a referee. Within division 3, section 77 provides for the power of a referee to make orders.

Relevantly, section 77(1) provides that a referee may on application of a body corporate or a proprietor in respect of a parcel, make an order for the settlement of a dispute, or the rectification of a complaint, with respect to the exercise or performance of, or the failure to exercise or perform, a power, authority, duty or function conferred or imposed by this Act in connection with that parcel.

In this case the applicant states that he moved a motion to the effect that the meeting should be adjourned because of “the imminent release of new legislation by the State and Federal Governments”. The applicant submits that the refusal to allow the adjournment is contrary to the law applicable to meetings as outlined in 13.18 of “Horsley’s Meetings: Procedure Law and

Practice” which states that a motion can be moved to adjourn a meeting until some future time with the facility for its eventual resumption.

Such a motion is categorised as a formal motion[1] because it has the power to interrupt proceedings.

It should be noted that the “Law and Procedure of Meetings” referred to in Horsley is the body of Anglo-Australian case law or common law which has developed over the centuries. It should also be noted that where there is legislation pertaining to the convening and conduct of a meeting, the statutory provisions will take precedence over the common law. [2]

In this instance the Building Units and Group titles Act 1980 contains very specific provisions regarding the conduct of Body Corporate Meetings. In particular, in Schedule 2, clause 1 (9) provides as follows:

The chairperson of a general meeting may with the consent of the meeting adjourn any general meeting

Clearly, in this instance the abovementioned statutory provision overrides the common law so that the wording of Schedule 2, clause 1 (9) prevails. The courts have held that where a company’s constitution provided that “the Chairman with the consent of the meeting may adjourn the meeting” the meeting can only be adjourned at the discretion of the Chairman :
Salisbury Gold Mining v Hawthorn [1897] AC 268 [3]

In my view the legislation provides the Chairperson with a discretion as to whether he or she should adjourn a meeting, and a specific statutory provision such as 1(9) overrides any applicable rule of common law to the extent of any inconsistency between the two.

For the above reasons the application is dismissed.

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[1] See Horsley at paragraph 13.16
[2] See Horsley at paragraph 1.8
[3] See Horsley at paragraph 13.5.