Cathedral Place [2009] QBCCMCmr 439 (5 November 2009)

TAKE NOTICE that pursuant to an application made under section 77(1) of the Building Units and Group Titles Act 1980 by the Proprietors of Kensington and Sandringham BUP 106966 through Todd Raumer, their elected representive for general meetings of the Cathedral Place MCP 106902

I hereby order that the application for two interim orders as follows -

“1. that no action is taken by the Cathedral Place Community Body Corporate, or anyone acting under instruction from the Body Corporate or the committee, to implement any of the purported decisions of the purported extraordinary general meeting of the Cathedral Place Community Body Corporate to be held on 12th October 2009 until final orders are made in this matter;

2. that if any action is taken by the Cathedral Place Community Body Corporate, or anyone acting under instruction from the Body Corporate or the committee, prior to issue of an interim order, that steps necessary to withdraw, reverse or undo this action is taken by the Cathedral Place Community Body Corporate or anyone acting under instruction from the Body Corporate or the committee.”

is dismissed.

This is an application dated 13th October 2009 by Kensington and Sandringham BUP 106966 (Kensington and Sandringham), care of Todd Raumer (the Applicant) as the representative of a “subsidiary” body corporate which is a member of Cathedral Place MCP 106902 (the principal body corporate) against the principal body corporate for orders as follows –

“Cathedral Place” MCP 106902 is a mixed community plan development established under the Mixed Use Development Act 1993 (MUD Act). Section 214A MUD Act provides that “Unless otherwise provided in this Act, a dispute about the operation of this Act or the rights and obligations of persons under this Act may be dealt with under the Building Units and Group Titles Act 1980,
part 5”.(BUGTA)

BUGTA continues to apply regarding the operation of the MUD Act despite the subsequent commencement of the Body Corporate and Community Management Act 1997 (BUGTA, section 5A).

Section 77(1) BUGTA provides a general power that a referee may on application of (amongst others) a body corporate “...make an order on any person entitled to make an application under this subsection ... 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.”

I am satisfied that the Applicant is the representative of Kensington and Sandringham body corporate, a “subsidiary” body corporate and a member of the principal body corporate. The Applicant is seeking an order against the principal body corporate, regarding the exercise or performance of a power or function conferred on it as the “community body corporate.” Accordingly I am satisfied that I have jurisdiction as a referee to determine the present dispute under section 214A of the MUD Act and section 77(1) of BUGTA.

Section 76(1) BUGTA also provides for the making of interim orders, if the referee is satisfied on reasonable grounds that, “by reason of the urgent circumstances of the case”, the referee should do so. Under section 76(3) BUGTA a referee may make interim order notwithstanding that notices have not been issued pursuant to section 73(1)(c) and (d) BUGTA inviting submissions. However, I am of the view that in the interests of natural justice, submissions, albeit brief, should be sought from relevant parties where possible. I therefore invited submissions from the principal body corporate and the principal body corporate manager, Body Corporate Services.

On 16th October 2009, John Gilliland (Mr Gilliland), secretary of the principal body corporate, contacted this Office saying that the principal body corporate might be unable to respond as one since committee members were divided on the issue. He was told that individual committee members could make submissions if they wished.

The Applicant provides in support of the application a copy of the draft minutes of a meeting of the committee of Kensington and Sandringham on 5th October 2009 showing a vote 4 – 0 in favour of making this application.

The Applicant says that he did not receive the required notice of a general meeting of the body corporate of the principal body corporate, which general meeting was held on 12th October 2009. The notice of the meeting (the notice) was dated 1st October 2009 but handed to him on 5th October 2009 at about 6.35pm during the Kensington and Sandringham committee meeting. The envelope which contained the notice was addressed to “Mr M. Pointing, Unit H72 Cathedral Place, 586 Ann Street, Fortitude Valley QLD 4006.”

At 12.37pm on 12th October 2009, the Applicant advised the committee of the principal body corporate and the body corporate manager that he had not had sufficient notice of the general meeting, asking them to reconvene the meeting. The principal body corporate did not call the meeting off as requested.

Chairman of the executive committee for the principal body corporate (the executive committee) , Randall Edwards (Mr Edwards), submitted that the main purpose of the general meeting held on 12th October 2009 was to engage a caretaker. There has been a history of difficulty in conducting a fair tendering process for a new caretaker over the past two years.

He says that the Applicant is not a member of the executive committee, but that he has held the proxy of committee member Michael Pointing (Mr Pointing) for the last two months, and has discussed the issues of the caretaking contracts on the executive committee.

He provides copies of minutes of an executive committee meeting which show that on 28th September 2009, the executive committee resolved to hold an extraordinary general meeting on 8th October 2009 at 5pm at the Meeting Room, Cathedral Place (General Business - Motion 3) to determine the engagement of a caretaker subject to contract documents being provided to the body corporate manager for inclusion in the notice and agenda of the meeting. It was also agreed that if the time frame could not be met, the general meeting should be held at the same time and place on 12th October 2009. All six persons present at the meeting, including the Applicant, voted in favour of this.

It says that the Applicant was “initially handed the notice of the general meeting on the 1st October 2009” in an envelope along with a copy of the proposed contract with the recommended caretaker, and other documents. He was told what the envelope contained by David Gordon (Mr Gordon), of the body corporate management company, Body Corporate Services, as were others present, following a committee meeting on 1st October 2009. He says that the application is misleading in that “it gives the impression that [5th October] is the “first” time he received the notice which is simply incorrect.”

By section 1(4) of Schedule 2, Part 2 BUGTA and section 172(9) MUD Act, there is no requirement for notices to be posted, but only served. The appropriate notice was handed to the Applicant in an envelope with Mr Pointing’s address on it. It “would be expected” that as his proxy the Applicant would have opened the envelope.

He says that as chairperson, he acted in good faith in continuing with the meeting on 12th October 2009, knowing that the Applicant had received the notice on 1st October 2009, eleven days before the meeting.

Further, he says that a contract has now been entered into between the principal body corporate and a caretaker and any order to reverse the contract would “place a serious financial burden” on the owners and would not be in their best interests. He says that the Applicant voted against the engagement of the caretaker now engaged “and it would appear now, that because the motion was carried, Mr Raumer is now seeking ways to subvert the process.” This is part of the “ongoing games” relating to the appointment of a caretaker.

He says that if the Applicant had handed the envelope to Mr Pointing, then Mr Pointing also knew of the contents before handing it back to the Applicant. It was in their hands for up to four days before it is acknowledged being received by the Applicant.

There was no submission from the body corporate manager, although an email dated 21st October 2009 from Mr Gordon is attached to Mr Randall’s submission. In that email, Mr Gordon says that on 1st October 2009 at an executive committee meeting, he “personally placed into the hands of the members present, which included all BUP representatives, the Notice and Agenda for the requested Extraordinary General Meeting... to be held on 12 October 2009......” and, “I stated that the envelopes contained the Notice and Agenda for the requested Extraordinary General Meeting..... .”

There is also attached to Mr Randall’s submission a copy of an email dated 21st October 2009 from Mr Gilliland. He says that he witnessed six envelopes “handed to all six CPCBC members’ representatives” by Mr Gordon on 1st October 2009, one to the Applicant, and that in his own package was the notice of the meeting, as was stated by Mr Gordon.

There is also attached a copy of an email dated 21st October 2009 from Tony Rich, the representative for “D&E”. He says that he was at the meeting when Mr Gordon distributed to everyone the notice for the 12th October meeting, although he did not open his envelope until he got home, but “because of the comment made at the meeting was aware of the contents of the envelope when it was handed to me...”

Following receipt of these submissions, and since the submissions deny that the required notice was not given to the Applicant, I gave the Applicant an opportunity to reply to them.

In reply, the Applicant says that the submission from Mr Edwards has not been authorised by the principal body corporate as far as he is aware.

He says that it is undisputed that he was elected to be the representative for Kensington and Sandringham for meetings of the principal body corporate and the body corporate manager should be appraised of that in accordance with section 169 of the MUD Act. It is also undisputed that Mr Pointing is a member of the executive committee, and is not the representative for Kensington and Sandringham.

He confirms that a package was handed to him on 1st October 2009 at the close of the executive committee meeting but at no time during that meeting was he or any other member of the committee advised that a general meeting of the community body corporate had been called for 12th October 2009.
David Gordon was not present at the start of this meeting, and was said to be stuck in traffic, although “in subsequent discussions... on 2nd October 2009” he advised that he was not at the start of the meeting “because he was preparing the notice of the general meeting.” When the meeting closed the Applicant was not aware of the contents of the package. He “recollect(s) a statement was made as I was leaving out the door that a general meeting had been called for 12th of October 2009” but he expected that any notices relating to him would be addressed to him or sent to him at his address. There are no minutes of this executive committee meeting yet available.

The package was addressed to “Mr M. Pointing” so he did not open it. Mr Pointing would not receive notices of general meetings. On 1st October 2009 the Applicant rang Mr Pointing to say he had a package for him and they arranged to meet on 4th October 2009.

On 2nd October 2009, the Applicant spoke to “Notre Dame” representative Peter Zunker who “alerted him to the fact that Randall Edwards and Tony Rich had requisitioned the meeting of the community body corporate” and also about what was on the agenda, including a motion about a new contract for the caretaking company which “did not include important clauses to protect lotholder’s interests....” The Applicant then telephoned Mr Gordon and asked what could be done to stop this motion from going ahead in the interests of Kensington and Sandringham owners.

Mr Pointing did not make the meeting on 4th October, but they knew they would meet on the following day. There was no notice of the meeting in the mail on 5th October 2009 as the Applicant had expected. On the evening of 5th October 2009, he gave the package to Mr Pointing who opened it and passed the notice of meeting to him. At that point the Applicant saw in detail the items on the agenda, and the Kensington and Sandringham committee authorised him to challenge the legitimacy of the notice.

Mr Edwards was advised that the requirements of BUGTA had not been met, and the Applicant denies that he only challenged the legitimacy of the general meeting after the vote about the caretaker’s appointment was known to him. If a new contract has been signed with the caretaker, those entering into it knew of the challenge to the validity of the meeting and thus that the validity of any motion is in doubt. There is now also a second application lodged with this Office about the validity of Motion 2 of the general meeting.

The Applicant seeks two interim orders, firstly, that no action is taken by the principal body corporate to implement any resolution passed at the extraordinary general meeting on 12th October 2009; and secondly, that if any action is taken, then “steps necessary to withdraw, reverse or undo this action is taken by the principal body corporate or its committee.”

An interim order will not be granted unless is it necessary due to the urgent circumstances to which the application relates. Further, a referee must be satisfied that the application raises a serious legal question to be decided and that the balance of convenience between the parties justifies injunctive relief.

Section 172(9) MUD Act provides that Part 2 of Schedule 2 of the BUGT Act applies to the meetings of bodies corporate established under the MUD Act, and to voting at meetings. Item 1(4)(a) of Schedule 2, Part 2 BUGTA provides that the notice of a general meeting of a body corporate shall be served on each proprietor as ascertained from the roll, at least 7 days before the meeting. As the Applicant has pointed out by reference to another order concerning Cathedral Place, section 38 of the Acts Interpretation Act 1954 provides for the calculation of times prescribed in legislation. This section suggests that the words ‘at least’ in item (1)(4)(a) means that both the day on which notice was given and the day of the meeting should be excluded from the calculation of the seven day period. That would mean that for a meeting held on 12th October, notice should have been ‘served’ no later than 4th October.

The Applicant says that he did not receive the notice and agenda of the meeting until 5th October 2009 although it is not in dispute that the envelope which contained the notice of the meeting was put into his hand on 1st October 2009. The envelope was addressed to another individual, at Unit H72, not the Applicant’s home or postal address.

Part 2 Schedule 2 BUGTA carries no references to “principal” or “subsidiary” schemes, and does not contemplate that a member of a body corporate might itself be a body corporate with a representative. Notice is to be served on each “proprietor as ascertained from the roll.” It would seem to me that it is the intention of the MUD Act, that subsidiary bodies corporate stand in the place of “the proprietor” when a community development lot has been subdivided by a building units plan. (section 167(6)(b) MUD Act). It follows that notice of a general meeting should therefore be sent to the body corporate of the subsidiary scheme at its registered address.

This does not appear to have happened. Mr Pointing, to whom the envelope was addressed, is a committee member of both the Kensington and Sandringham BUP and the executive committee of the principal body corporate. It does not appear from the evidence that he is a person who has a vote at the general meeting of the principal body corporate, and therefore not a person who would be given notice of such a general meeting.

The time when a notice is “served” may also not be the same time, or have the same meaning, as when a notice is “received”. A notice may be successfully “served” on someone at a registered address for service, even though that person has not had sight of the document. A person may receive a notice at a residential address, but be on holiday, or ill, or choose not to open an envelope, and therefore not have actual notice of the contents of the notice until he or she chooses to be informed. BUGTA is not concerned with “receipt” but with “service”. Whether a recipient might have constructive, if not actual, notice of a “served” document is a matter which needs further exploration in the context of BUGTA and the MUD Act.

The Applicant refers to a previous adjudication also concerning Cathedral Place, but in that matter, the notice of meeting was dated 14th April for a meeting to be held on 21st April, that is, the notice was not even created within the time limit for service. The adjudicator found that the applicant had not been given seven days notice, and that failure to comply with the legislative requirements in regard to meeting procedures could be a basis to invalidate a general meeting, particularly if it could be shown that the non-compliance could have affected the outcome of or could have affected any member’s right to properly participate in the meeting.

It seems to be on the information presently available that the Applicant knew about the general meeting because he had been in attendance at the executive committee meeting on 28th September 2009; and had been appraised of the general meeting and the contents of the agenda by Peter Zunker on 2nd October 2009; and had contacted the body corporate manager about it on 2nd October 2009; and it seems that he was actually able to exercise his vote as the representative of Kensington and Sandringham.

Whether the prior knowledge of the Applicant is sufficient to displace the legislative requirements is a complex question which may be more properly considered at the determination of the final order. Further, simply knowing “about” a meeting might not be sufficient to give a representative “notice” of it if he has not been able to consider documents contained in the notice, or to take the instructions about those documents from those whom he represents.

However, in the meantime, the Applicant has provided sufficient evidence to demonstrate that he, as the representative of the member body corporate Kensington and Sandringham BUP, was not served with the notice of meeting by the body corporate within the required time period, and perhaps was never served with the notice of meeting by the body corporate since notice of it, when it came, came to him not from the body corporate but fortuitously via the hand of another to whom it was addressed.

In conclusion, I am satisfied that there is a serious question in this matter regarding the validity of a general meeting called without proper or sufficient notice to a voter.

However, there does not now seem to be any urgency about this case, such is required by section 76(1) BUGTA in the making if an interim order. The principal body corporate carried on with its meeting, and voted on motions proposed therein, and has subsequently taken steps, according to members of its committee, and to the consternation of the Applicant, to enter into a contract or contracts with third parties. Whether such motions were validly voted upon or such contracts are open to challenge are not matters which can be determined by an interim order, although if the meeting is held to be invalid, actions done in pursuance of that meeting may also be invalid, unless they are subsequently passed by a valid meeting of the body corporate.

I cannot see that an interim order in the terms sought would have any effect. I therefore dismiss the application.

The Applicant, perhaps understandably, has not proposed any steps by which entry into a contract with a third party may be “withdrawn, reversed or undone”, as required by the second interim outcome sought. The principal body corporate will no doubt take advice on its position should it have entered into contracts relying on a resolution passed at an invalid general meeting.

As sought in the final outcomes, the principal body corporate may of its own volition convene another general meeting making sure that the correct period of notice is given to the correct members of the principal body corporate. This application now pending does not stop another general meeting from being held.

Number of Building or Parcel:	MCP (Mixed Community Plan)106902
Address of Parcel:	41 Gotha Street FORTITUDE VALLEY QLD 4006

Queensland Body Corporate and Community Management Commissioner - Adjudicators Orders

Cathedral Place [2009] QBCCMCmr 439 (5 November 2009)