Sylvan Beach Resort [2009] QBCCMCmr 387 (8 October 2009)

Number of Scheme:	25728
Name of Scheme:	Sylvan Beach Resort
Address of Scheme:	21-23 Sylvan Beach Esplanade BRIBIE ISLAND QLD 4507

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

I hereby order that the application for orders as follows-

“ An order for the proper conduct of meetings as agreed to during the Conciliation discussions..Complete Agendas including correspondence to be presented. Minutes to accurately reflect the conduct of the meeting. Chairman to chair meetings not the Body Corporate Manager;

Disclosure to Rus and Cathy of all correspondence, both inward and outward since the last AGM of 30th August 2008;

Committee motions to be asked for from all Committee Members not decided upon by Body Corporate Manager and Chairman.”

is dismissed

APPLICATION

This is an application dated 15th May 2009 by Rus Thomas and Cathy Tomas (the Applicants) co-owners of Lot 1, against the Sylvan Beach Resort body corporate (the body corporate) for orders as follows —

“An order for the proper conduct of meetings .....Complete Agendas including
correspondence to be presented. Minutes to accurately reflect the conduct of the meeting. Chairman to chair meetings not the Body Corporate Manager;

Disclosure to [Applicants] of all correspondence, both inward and outward since the last
AGM of 30th August 2008;

Committee motions to be asked for from all Committee Members not decided upon by Body Corporate Manager and Chairman.”

JURISDICTION

“Sylvan Beach Resort” CTS 25728 is a community tiles scheme governed by the Body Corporate and Community Management Act 1997 (the Act) and the Body Corporate and Community Management (Accommodation Module) Regulation 2008 (Accommodation Module). There are 24 lots in the scheme.

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
(c) a claimed or anticipated contractual matter about-

(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)).

Reference is made in the application to a conciliation session conduction by this Office. I have no access to, or any information about, such conciliation which must remain confidential. In an application for adjudication, the applicant’s case is considered “de novo” on its merits and the applicant must prove his or her case on documents and information provided with the application for adjudication.

SUBMISSIONS

The Applicants say that the “rules providing the proper conduct of meetings” are not observed. They attach a copy of an agenda for a committee meeting held on 16th May 2009 wherein motion 6 states “Other areas of dispute with Rus and Cathy Thomas.” They describe this as “Discuss other issues regarding Rus and Cathy Thomas.” They say that they were asked to leave the room whilst discussions took place, which they see as deliberately withholding information from owners.

The Applicants have not been provided with correspondence as requested. They also say that all committee members should be provided with an opportunity to present motions prior to the printing of the agenda for a committee meeting, and that no request was made for any agenda items prior to the agenda for the meeting held on 16th May 2009, nor on 21st February 2009.

In accordance with section 243(23)(a) Act submissions were sought from all lot owners.

The body corporate made a submission through Phil Priestley (Mr Priestley), chairman of the scheme. It refers to the conciliation session which is not a part of this application. It denies that it is not complying with the legislation and says the requests of the Applicants are “being actioned.” It says that by reference to one meeting on 16th May 2009, the Applicants cannot demonstrate that the body corporate is not complying with the legislation. It says that the committee is legally entitled to ask parties to a dispute to leave the room when a matter is being discussed by the committee. It says that the application does not detail what “rules providing the proper conduct of meetings” are alleged to have been breached or to what these rules refer.

In respect of correspondence requested, the body corporate again says that it unsure what correspondence is referred to. The minutes of all meetings refer to correspondence received and sent. It says that it is correct that in October 2008 a letter of complaint about the Applicants from an owner was tabled at a meeting to which the Applicants were not invited and was kept from the Applicants because to show it would have been a “breach of trust.” It says the Applicants have threatened legal action against the body corporate and/or the committee a number of times. The committee has “on a number of occasions... had meetings to plan its response” and the Applicants have no access to such information. The body corporate is willing to disclose any correspondence to the Applicants to which they have ” a legal right.” However, in view of the threats of legal action, the body corporate feels that it should not have to disclose “any matter that it feels would be
prejudicial to itself at any subsequent legal proceedings.”

Finally, it says that any committee member is free at any time to present agenda items for inclusion at the next committee meeting and that the legislation does not require them to be invited to do so. Issues not on the agenda may also be discussed, and the Applicants are free to raise any issue at a meeting. The Applicant Rus Thomas, as caretaker, has previously acknowledged that he has a duty to raise relevant issues with the committee which is by nature contrary to a stance of having to be invited to submit motions.

Shirley Crowe, owner of Lot 24, does not address the outcomes sought in the adjudication application, but summarises that the she finds the friction between the Applicants as caretakers and the body corporate committee to be extremely non-productive. She notes that meeting minutes are now more detailed than they were previously.

The Applicants exercised their right of Reply. They doubt that the committee has sanctioned the response on its behalf from Mr Priestley. They say that Motion 6 of the committee meeting on 16th May 2009 was “clear evidence of “non specific” motions still being put at Committee meetings...” They also point to Motion 1 of the meeting of 30th August 2008 and Motion 6 of an extraordinary general meeting of 21st February 2008 (sic), copies of which were provided by Mr Priestley.

The Applicants aver that the ‘lack of correspondence in or out is self evident in the material supplied by Mr Priestley.”

They deny ever threatening legal action to the committee or the body corporate (by their management company).

Their concern about not seeing correspondence as managers of the resort is that they cannot do their job properly. A civil engineer Brian English was engaged by the committee to report on the poor state of the concrete driveways. The engineer asked for resort plans and quoted for the report, but he is still waiting for the plans and has not yet done the report. The Applicants are concerned that the driveways present a trip hazard.

The committee has not fixed the swimming pool fence because the quotation received, now shown to the Applicants, was too high. However, the body corporate has a duty to take action to fix the pool fence.

They say that there is correspondence “somewhere” and a report from a company detailing work which needs to be carried out in respect of compliance with fire regulations. The Applicants’ management company pointed out that a fire door had been replaced with an internal door and the committee obtained a report. The Applicants say they could not get access to that report so they asked a QFRS inspector to do a fire compliance inspection which shows that the scheme does not comply with fire regulations as of 1st July 2009. Mr Thomas attempted to engage a company to complete the works, the body corporate manager cancelled the planned works. In his letter to Fire Worx he says: “I have assumed responsibility now for this work to be carried out ASAP. The invoices are to be set to Life Style Body Corporate Management Services for payment.”

The Applicants are concerned about the body corporate’s and their own company’s liability.

The Applicants conclude by seeking an administrator for the scheme. They say that they have never received a complaint from an owner in 10 years, and if the committee has one they should have passed it on so that the company could deal with the problem.

In additional material sent to this Office on 2nd October 2009, upon which the body corporate has not been able to make submissions, the Applicants advise that the body corporate has on 2nd October 2009 been fined $2500 by QFRS for non compliance.

DETE RM I NATION

In this matter, the Applicants seek three outcomes. The first outcome is effectively that the body corporate complies with the legislation. Whilst the Applicants have supplied scant evidence that the body corporate has not complied with the legislation, even if such evidence was provided, to make such an order would be meaningless. All persons are required to comply with the legislation, whether in respect of the conduct and calling of meetings or the production of “full and accurate” minutes.

The chairperson must chair committee meetings if he or she is present. The engaged body corporate manager for a scheme may only chair a general meeting if there is not a quorum present. (Section 78(3)(b) Accommodation Module.) There is no evidence that the body corporate manager has chaired any meetings.

The Applicants say that Motion 6 of the committee meeting on 16th May 2009 was “clear evidence of “non specific” motions still being put at Committee meetings....” I do not agree. Further, reference to “motion — 30th Aug 2008” in the body corporate submission is not explained and the complaint about Motion 6 of the extraordinary general meeting of “21st February 2008” (by which I take the Applicants to mean 21st February 2009) is not made out by the Applicants. In the minutes of that meeting there is no motion 6, but a “discussion item” about the pool fence. Items may be discussed at meetings if there is no vote taken and no decision of the body corporate made. This minute merely notes that Mr. Thomas will report back to the body corporate later.

The second outcome sought is that undefined correspondence “since 30th August 2008” is made available to the Applicants. All correspondence to the body corporate or from the body corporate is a body corporate record and is open to inspection by any “interested person” which includes lot owners such as the Applicants. The body corporate should not be secreting any correspondence unless it believes that such material is defamatory or covered by legal privilege. (Sections 202(2) and 202(3) Accommodation Module) Whether a document is, or is not, privileged may require a legal opinion.

The Applicants do not make clear what correspondence they wish to see, but in their Reply, it appears that they think that there exist relevant “health and safety” reports which they have not seen. Any such report commissioned by the body corporate on the state of the buildings or the legal requirements of the body corporate is most unlikely to be covered by any kind of privilege. Such reports are open to all interested persons, and the Applicants should request an inspection of such reports in writing and if after 7 days notice has been given, and payment of the prescribed fee, the body corporate has still not provided a time for inspection, then the Applicants might make an application to this Office, or seek a penalty in the Magistrates Court. (Section 205(2) Act)

The Applicants have failed to demonstrate to me that they have been refused access by the body corporate to specific documents.

There is some evidence that the body corporate has deliberately excluded the Applicants from committee meetings by failing to invite them to committee meetings at which the body corporate has planned strategies in the event of legal proceedings being taken by the Applicants. There is also evidence that the body corporate has deliberately withheld a complaint about the Applicants from the Applicants. Neither of these courses of action can be condoned. A person complained about has a right to put his or her side as a matter of natural justice, and possibly, provide an improved service.

The legislation is specific about when a non-voting committee member, (and it appears that the Applicants are non-voting committee members as representatives of the caretaking service contracting company), may be excluded from a meeting. A non-voting member must not be present for an item of business about a dispute between the body corporate and that non-voting member (section 50(1)(a) Accommodation Module) or the vote by committee members to exclude that person. This would appear to cover the complaint laid about Motion 6 of the committee meeting on 16th May 2009. The committee may also lawfully exclude a non-voting member from the meeting about another item of business. (Section 50(3) Accommodation Module.)

That is not to say that the committee should hold committee meetings without advising non-voting members that a committee meeting is to be held. Section 45 Accommodation Module requires that all committee members are given notice of committee meetings. At committee meetings matters not on the agenda may also be discussed. If a matter on the agenda, or which arises, falls into a category for which the voting members wish to exclude a non-voting member, then a vote on excluding the non-voting member should be taken at the time of the meeting.

The third outcome sought is that the committee should be ordered to invite motions from all its members and that the chairperson and body corporate manager do not prepare the agenda alone. There is no legislative requirement that the committee, or members of it, invite motions from other members. All members are free to propose motions to the next meeting for the agenda. Members may also deliberate and decide on matters which are not on the agenda and which arise at the meeting.

It appears to me that the outcomes sought by the Applicants do not address their real concerns with the body corporate and I am unable to make the orders requested since there is no evidence provided. The application is therefore dismissed.

The Applicants seem to have concerns about the maintenance and safety of the grounds and the compliance of the scheme with fire regulations. They have been active in requesting that outside authorities inspect the premises and in complaining to such authorities about the standards found within the body corporate. However, they have not brought an application to this Office requiring the body corporate to maintain, and/or make safe the premises, or saying that the body corporate is failing in its duty to maintain the premises. They have provided very little, if any, evidence about the failure of the body corporate to maintain scheme land, and none upon which the body corporate has been able to make submissions. These matters were raised in the Reply and are not relevant to this application.

I note that the Applicants of their own volition engaged contractors to perform works in connection with a fire safety report, asking the bill to be sent to the body corporate. The Applicants should take note that such action is quite contrary to the spirit and letter of the legislation and that if the Applicants, or any lot-owner, is concerned about the safety or maintenance of the scheme, the legislated process is to bring the matter to the attention of the committee, requiring the committee to take urgent action. Whilst it is noted that the Applicants say that the body corporate has been fined $2,500 by QFRS within the last week, the Applicants have provided no evidence whatsoever that such a course was taken by them, or that the committee failed to act.

Queensland Body Corporate and Community Management Commissioner - Adjudicators Orders

Sylvan Beach Resort [2009] QBCCMCmr 387 (8 October 2009)