Surfers Palms North [2009] QBCCMCmr 315 (25 August 2009)

TAKE NOTICE that pursuant to an application made under the abovementioned Act by Adrian Coronno, committee member

I hereby order that the application for an interim order by Adrian Coronno against the body corporate for Surfers Palms North community titles scheme 20846 seeking the following outcomes:

That Gavin Fredric (Administrator) and the Body Corporate not proceed with the Annual General Meeting scheduled to be held on 25 August 2009.
That the Administrator includes the nomination of Adrian Coronno as chairperson and ordinary committee member in annual general meeting paperwork.
That the Administrator includes all motions submitted by Adrian Coronno for the annual general meeting as produced to the Administrator.
That the Administrator re-issue the documents for the annual general meeting and that those documents include the motions and committee nominations submitted by the Applicant.
That the annual general meeting paperwork be reissued at no cost to Surfers Palms North owners or the Body Corporate.
That the following motions be removed from the annual general meeting paperwork sent to owners:
- (a) Motions 13, 14 and 15 proposed by A & G Chevalier.
- (b) Motions 9 and 10 proposed by D Abbott.
- (c) Motions 11 and 12 proposed by A Nichol.
That no motions be implemented.
That no committee members be appointed.

is dismissed.

The scheme
“Surfers Palms North” community titles scheme 20846 is subject to the Body Corporate and Community Management Act 1997 (Act) and the Body Corporate and Community Management (Accommodation Module) Regulation 2008 (Accommodation Module).

Application
This application is by Adrian Coronno (Applicant) against the Body Corporate seeking outcomes:

Jurisdiction
In accordance with section 247 of the Act, the Commissioner for Body Corporate and Community Management has referred the application to me even though all persons entitled under section 243 of the Act to make submissions about the application have not been given notice of the application or afforded an opportunity to make submissions about the application.

Section 276(1) of the Act provides that an adjudicator may make an order 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. Section 279(1) provides that an 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”.

Investigation
In accordance with the investigative powers of an adjudicator stated in section 271 of the Act, on 13 August 2009 I invited submissions from the committee, Capitol Body Corporate Administration (Body Corporate Manager), the Administrator, Ms Chevalier, Mr Abbott and Mr Nicol regarding the interim order application. As the Applicant subsequently provided further material and requested additional interim orders (numbered 7 and 8), I extended the time for making submissions.

Background
The Administrator was appointed on 22 May 2009 by interim order of an adjudicator (Ref. No. 292-2009A) which stated (in part):

“I hereby order that the proposed annual general meeting of Surfers Palms North proposed for 26 May 2009 must not proceed.

I further order that Gavin Fredric of Peak Body Corporate Management Pty Ltd (appointee) is authorised to call, hold and chair an annual general meeting (meeting) of the body corporate for Surfers Palms North.

In making this order the adjudicator stated (at pages 1 and 2 of the statement of reasons for decision):

“...I am satisfied that it is appropriate to make this appointment given the obvious dysfunction of the existing committee and the failure of the committee to ensure the annual general meeting was called within the statutory time period. Considering the dysfunction, past failures and various allegations made it is preferable to appoint an independent person with no prior involvement with the scheme and who is not subject to any concerns expressed by or on behalf of current committee members. As with the previous order, the present order is limited to authorising the appointee to conduct a replacement annual general meeting and carry out committee functions in relation to any routine administrative matters...In summary, as part of an interim order in disputed circumstances it in not appropriate for me to relieve any committee members or body corporate managers of their current positions. It is preferable instead that the appointee proceeds to call the meeting and that owners vote for a new body corporate manager and committee according to what they consider is in the best interests of their scheme.”

This supplementary interim order was made after the initial appointee by interim order, Peter Nicholson of Active Body Corporate, indicated he was unable to act in the appointed capacity (Ref. No. 202-2009 made on 15 May 2009). It would seem Mr Fredric has been appointed on similar terms as Mr Nicholson.

Urgency
Given section 279(1) of the Act, it is necessary to determine at the outset whether, because of the nature or urgency of the circumstances relating to the application, an interim order is in fact necessary or appropriate. Whilst the range of matters which might be the subject of an interim order is not capable of definition, the Applicant does need to establish that the circumstances of the application warrant the making of an interim order.

The AGM is scheduled to be held tonight. The Applicant argues that the meeting is invalid and seeks interim orders (amongst other things) that the meeting not proceed or in the alternative, that resolutions not be implemented and that the election of the committee not have effect. It could be argued interim outcomes such as those numbered 2 to 6 are not of the nature of injunctive relief, particularly when these outcomes are restated as final outcomes sought. However, I consider the Applicant has demonstrated urgent circumstances to warrant consideration of the interim order application.

Ownership of Lot 26
The ownership of Lot 26 would seem to be one of the main issues in dispute. The second, third and fourth interim outcomes relate to a nomination of the Applicant for election as a member of the committee and to the submission of a motion for consideration at the AGM. In both cases, lot ownership is a significant consideration. Only a lot owner is invited to make a nomination for election (s 17, Accommodation Module); an owner may be nominated (s 18); a nomination must specify whether the candidate is an owner or not (s 19); and only a lot owner or the committee may submit a motion for consideration in general meeting (s 67).

The ‘owner’ of a lot in a community titles scheme is defined in schedule 6 of the Act to mean: “the person who is, or is entitled to be, the registered owner of a lot, and includes a mortgagee in possession of the lot; and if, under the Land Title Act, 2 or more persons are the registered owners, or are entitled to be the registered owners, of the lot—each of the persons; and for chapter 6, see section 226.” A title search conducted by this office on 11 August 2009 indicates the registered owner of Lot 26 is Paulette Galustian. The “registered owner of a lot means the person recorded in the freehold land register as the person entitled to the fee simple interest in the lot” (schedule 2, Land Title Act 1994). In this circumstance, it would seem the Applicant would need to demonstrate that he is “entitled to be, the registered owner of” Lot 26. “A person to whom an interest is to be transferred or in whom an interest has been created has a right to have the instrument transferring or creating the interest registered if—(a) the instrument has been executed; and (b) the person lodges the instrument and any documents required by the registrar to effect registration of the instrument; and (c) the person has otherwise complied with this Act in relation to the registration of the instrument” (s 183, LT Act).

There is no indication that there are unregistered dealings on the land register for Lot 26. The Applicant submits that on 26 June 2009, the Body Corporate Manager recorded a change of ownership on the roll for Lot 26 to include him as a co-owner with Paulette Galustian, the owner since 8 May 2007. This is confirmed by the Body Corporate Manager who stated this information was provided to the Administrator on 30 June 2009. The Administrator acknowledges that the Body Corporate Manager recorded the information on the roll. Other than the notice of information for the Body Corporate roll dated 1 June 2009 indicating that the Applicant and Paulette Galustian have become entitled to be the registered owner of the Lot by private arrangement, nothing has been submitted demonstrating that the Applicant is entitled to be the registered owner of the Lot. In this circumstance, there is a question as to whether the Applicant is an owner of Lot 26.

The Applicant argues the Administrator had no reason to doubt the information recorded on the Body Corporate roll about the owner of Lot 26. The Administrator has stated he was obliged to check information he was given on 1 July 2009 about ownership of the Lot, particularly when ownership was fundamental to the nomination made and the motion/s submitted. In the circumstances, I am satisfied it was appropriate for the Administrator to have regard to information given to him about ownership of the Lot.

The submission of motions and a nomination for election to the committee
The Applicant states that the Body Corporate Manager sought nominations and motions from owners before 31 January 2009 (the end of the financial year) and that he and Ms Galustian had submitted a nomination of himself for election to the position of chairperson and secretary as well as motions. He says these nomination and motions were included on the agenda of the annual general meeting to be held on 26 May 2009. The Applicant states that he and Ms Galustian submitted motions and his nomination for election to the Administrator by the required 30 June 2009. He states one motion submitted was a proposal to appoint the Body Corporate Manager. He adds this motion has not been included on the agenda of the AGM and that the only motion proposing the engagement of a person as body corporate manager is that for the Administrator. He submits the Administrator has refused his motions and nomination even though he allowed a nomination from Mr Nicol.

The Applicant provided additional material that the Administrator sent pre-filled ballot papers to some owners. He believes this is an attempt to influence voting outcomes. He says the information is printed on paper clearly identified as coming from the Administrator and is identical to the paperwork required to be distributed. The Applicant states the owners are not sophisticated enough to make a clear judgment as to the validity of what they have received.

The Body Corporate Manager states Ms Galustian submitted a motion and nominated the Applicant for committee positions before the end of the financial year. He says given the order dated 15 May 2009 did not invalidate a nomination or requests for motions made before 31 January 2009, it is arguable they are valid for the purpose of the AGM. The Body Corporate Manager questions the nomination of Mr Nicol stating he is not an owner of a lot.

The Administrator submitted that on 1 June 2009 he invited nominations and motions to be made by 30 June 2009. He states as his appointment required him to call for new nominations and invite owners to propose motions, it was not appropriate or necessary to see the nominations for the 26 May meeting. The Administrator says the Applicant submitted motions on 25 June 2009 (he provided a copy of a notice of motion from the Applicant dated 24 June 2009 and noted ‘Invalid proposer not owner’). The Administrator also provided a copy of two committee nomination forms: the first dated 6 June 2006 signed by the Applicant and Ms Galustian nominating the Applicant as owner for election as chairperson and secretary; the second dated 23 June 2009 signed by the Applicant and Ms Galustian nominating the Applicant as owner for election as chairperson and ordinary member (this form is noted ‘not valid part B not completed by candidate). He states the nomination did not comply with section 19(1)(b) and (2)(d) of the Accommodation Module. He submits with respect to Mr Nicol, an error listing him as owner was detected in the meeting notice and owners were notified of the error by letter dated 6 August 2009. The Administrator states the defect with the Applicants’ nomination and motion could not be rectified after nominations had closed.

With respect to the additional material provided by the Applicant, the Administrator submits no documents were issued by him to selected owners, nor was any correspondence other than the notice of the AGM and the 6 August 2009 correction sent from his office. Mr Abbott stated the Administrator did not issue any papers to selected owners; the papers were published and distributed by owners unknown to Mr Fredric.

Given the context of the interim orders made on the earlier dispute resolution application, for the purposes of making this interim order, I am satisfied the Administrator was not required to have regard to any nominations or motions made before 31 January.
I do not necessarily agree the Administrator had to include nominations and motions in the AGM business for the reason they were included in the business for the 26 May meeting; a meeting ordered not to proceed. It is not evident that any nominations or motions submitted before 31 January have been recognised for the purposes of the AGM. Rather, it would seem that the motions on the agenda of the AGM and the election are proposed to be transacted based on procedures performed by the Administrator.

As I have stated above, I am not satisfied from the material that the Applicant is entitled to be treated as the owner of Lot 26. The onus rested with the Applicant and/or Ms Galustian to provide authenticating material. In my view, nothing submitted demonstrates ownership. It is not clear that the owner of the Lot otherwise made a proper nomination of the Applicant as an eligible person whi is not the owner a lot included in the scheme or properly submitted a motion to the Administrator. Particularly, I am not satisfied there is a question about not including a motion proposing the engagement of another person as body corporate manager. Given the submissions, I do not consider the issue about lot ownership is a basis for making any of the interim orders sought.

The Applicant made submissions about the nomination of Mr Nicol; a matter responded to by the Administrator. I do not consider this issue warrants making the interim orders sought. The question of Mr Nicol’s eligibility to be nominated and elected as a member of the committee may be a matter for consideration in the event he is elected and the matter proceeds to final determination.

With respect to the additional material, I do not consider the Applicant has provided any evidence which would be a basis for making the interim orders sought. He has made a number of unsubstantiated claims; all of which have been denied by the Administrator. The Applicant’s opinion about how other owners may interpret this information is not a reason to make any of the interim orders sought.

The Applicant sought additional outcomes that no motions be implemented and that no committee members be elected. It would seem these outcomes are based on a view that the Administrator has acted improperly, has denied natural justice, is an inappropriate person to perform these functions and has failed as an independent administrator. I do not consider the Applicant has provided any argument to support any such finding. While he may disagree with some decisions made by the Administrator, there is nothing to suggest for example: the AGM was incorrectly called; improper notice of the meeting was given to lot owners; or there is an issue about the motions on the agenda or about the election of a person to a position on the committee to warrant making the interim orders sought.

Motion 9
Motion 9 proposes the engagement of Judy Gibson FCPA MIIA (Aust) to undertake an examination of books and records for the period of administration by Ian D’Arcy to the AGM. The Applicant states the Motion proposes needless expense and does not add value to owners’ investment in their lots. Mr Abbott submits Ms Gibson is an experienced auditor and owners are entitled to know the status of their funds. While the Applicant opposes the proposition of the Motion, he has not raised a serious question to be answered about the Motion or the way it was submitted.

Motion 10
Motion 10 proposes that the caretaker maintain log books relevant to his duties and that this information be maintained in Body Corporate records. The Applicant states the Motion is redundant as the resident manager already maintains a log book. Mr Abbott questions why the Applicant, and not the caretaker, has disputed this Motion. While the Applicant opposes the proposition of the Motion, he has not raised a serious question to be answered about the Motion or the way it was submitted.

Motions 11 and 12
Both Motions relate to contributions, including a special contribution. I have not been able to locate any specific grounds for the outcome sought. For this reason, I have not given any consideration to making an interim order with respect to these Motions.

However, I note both Motions are stated on the agenda and the voting paper for the AGM as being submitted by Alex Nicol, the owner of Lot 35. Mr Nicol does not appear to be the registered owner of Lot 35 and no information has been provided as to whether he is entitled to be the registered owner. There may be a question about the submission of these Motions in the circumstances; an issue that may need to be considered by the person chairing the AGM. If either Motion is passed, any issue about the submission of the Motions may be dealt with should the application proceed to final determination.

Motions 13 and 14
Motion 13 proposes that owners be given a copy of agendas and minutes of committee meetings held since October 2008. Motion 14 proposes owners being given a copy of the contract of the resident manager. The Applicant submits Motions 13 and 14 propose needless expense and the information is already available on request. Ms Chevalier states she submitted these Motions as she has been unsuccessful in her requests to the Body Corporate Manager to obtain this information, and that this information should have been given to lot owners. She says the Applicant can vote against the Motions.

While the Applicant opposes the proposition of the Motions, he has not raised a serious question to be answered about either Motion or the way each Motion was submitted.

Motion 15
Motion 15 relates to the duties of the caretaker. I have not been able to locate any specific grounds for the outcome sought. For this reason, I have not given any consideration to making an interim order with respect to this Motion.

Conclusion
In my view, the Applicant has not raised a serious legal question in the circumstances to warrant making any of the interim orders sought. In some respects, the Applicant has merely stated his opinion and has not provided evidence to support the claims being made. On the basis of the submissions made and in the circumstances, I have dismissed the application for an interim order.

This application will now be administered in accordance with the Act and the normal processes of this Office. The application will be finally determined in due course.

Number of Scheme:	20846
Name of Scheme:	Surfers Palms North
Address of Scheme:	2 St Kevins Court BENOWA QLD 4217

Queensland Body Corporate and Community Management Commissioner - Adjudicators Orders

Surfers Palms North [2009] QBCCMCmr 315 (25 August 2009)