Regal Court [2009] QBCCMCmr 48 (11 February 2009)

TAKE NOTICE that pursuant to an application made under the abovementioned Act by Sandra Wise, the owner of Lot 2

I hereby order that the resolution passed on Motion 8 at the Annual General Meeting of the body corporate for Regal Court community titles scheme 59 dated 29 October 2008 that: “Appointment of Body Corporate Manager was agreed to appoint K. Butler as manager from 3 submissions made for the position. S. Wise disputed the standard term of 3 years and requested a 1 year term only, this was over ruled and an agreed term of 3 years as per agreement was accepted. Vote: 4 yes/0 no/0 abst.”, is void.

I further order that in all other respects, the application by Sandra Wise, the owner of Lot 2 is dismissed.

The scheme
“Regal Court” community titles scheme 59 is subject to the Body Corporate and Community Management Act 1997 (Act) and the Body Corporate and Community Management (Standard Module) Regulation 2008 (Standard Module).

Application
This application made on 1 December 2008 by Sandra Wise, the owner of Lot 2 (Applicant) against the Body Corporate seeks outcomes that:

The Applicant has named Mr Butler (body corporate manager) as an affected person.

The Applicant provided a copy of the notice of the AGM. The voting paper for Motion 8 states: “To appoint a Body Corporate Manager (see notes and submissions)”. A document headed “Committee Notes” states for Motion 8: “To appoint a Body Corporate Manager to manage the affairs of Regal Court CTS 59. You are welcome to inspect the three quotations obtained, these have been provided by Archers B/Corporate Services, Trimble Real Estate and Keith Butler (past manager) if you wish to discuss details of these agreements you can also contact Archers Body Corporate Management on Phone ... Trimble real Estate on Phone ... and Keith Butler on Phone ... Brief details of costs are Archers B/Corp $200 per unit annum + expenses. Trimble R/Est $300 per unit annum + expenses. K. Butler $180 per unit annum min expenses”.

The Applicant also provided a copy of the minutes of the AGM which stated for Motion 8: “Appointment of Body Corporate Manager was agreed to appoint K. Butler as manager from 3 submissions made for the position. S. Wise disputed the standard term of 3 years and requested a 1 year term only, this was over ruled and an agreed term of 3 years as per agreement was accepted. Vote: 4 yes/0 no/0 abst.”

The Applicant submits that the documentation for the AGM sent out by Mr Butler did not include any quotations for body corporate management and that no-one sighted the quotation from Mr Butler or any other quotation before the meeting. The Applicant also provided a copy of a proposed Administration Agreement for “Regal Court” dated 20 November 2008 by Strata Link Services Pty Ltd. Although not stated as an outcome sought, the Applicant also questions the administrative and sinking fund budgets and the increased fees stating there was not a specific budget provided.

Submissions to the Commissioner
The Commissioner provided a copy of the application to Mr Butler for distribution to the owner of each lot (excluding the Applicant) and the committee, with an invitation to respond to the matters raised in the application (s 243, Act).

Mr Kelly of Lot 1 submits he understood the 3 management agreement quotes were available for inspection and were available at the extraordinary general meeting he attended. He states he can only assume the fee increases are in line with inflation and necessary expenses. Mr Kelly is happy with the current body corporate manager.

Mr Butler of Lot 3 states copies and viewing of the documents have always been available either at his office or at the offices of the companies quoting. He submits that a brief summary of the 3 quotes and details of where to obtain further details were included in the AGM paperwork. Mr Butler says the complete 3 quotes were presented at the AGM for perusal and owners had the opportunity to inspect the quotes prior to the meeting. He submits that the Applicant and Mr Elliott of Lot 7 declined from voting on Motion 8. Mr Butler questions the stated 28% increase in Body Corporate fees. He states the AGM was conducted in a proper manner complying with the legislation.

Mr Kenyon of Lot 6 believes the correct procedures were followed at the AGM and he thinks the fees are reasonable.

Mr Elliott of Lot 7 supports the application stating the Applicant’s recollection of events at the AGM is accurate and that the minutes are not accurate. He says he was not given sufficient time to view the body corporate quotes and was not given a copy of the one voted in. Mr Elliott expressed concerns about the management of the Body Corporate and the fees voted in at the AGM.

Adjudication
A dispute resolution recommendation has been made under section 248 of the Act referring the dispute to departmental adjudication.

Jurisdiction
An adjudicator may make an order that is just and equitable in the circumstances to resolve a dispute about a claimed or anticipated contravention of the Act; or the exercise of rights or powers, or the performance of duties, under the Act (s 276(1), Act). An order may require a person to act, or prohibit a person from acting, in a way stated in the order (s 276(2), Act). An adjudicator's order may contain ancillary and consequential provisions the adjudicator considers necessary or appropriate (s 284(1), Act).

The application was made within 3 months of the AGM satisfying the time limit for an application that includes an outcome proposing voiding a resolution passed at a general meeting (s 242, Act).

Investigation
An adjudicator must investigate the application to decide whether it would be appropriate to make an order on the application (s 269(1), Act). An adjudicator’s investigative powers are stated in section 271 of the Act. After consideration of the submissions made by the Applicant in making the application and the submissions made in response to the Commissioner’s invitation, I have decided further investigation is not necessary.

Decision
Motion 8
The Motion proposed the engagement of a body corporate manager, a matter regulated by the legislation. Section 122(1) of the Act provides that the regulation module applying to the scheme may prescribe things about the engagement of a person as a body corporate manager including the requirements with which the engagement must comply and the consequences of not complying with these requirements. A body corporate may engage a person as a body corporate manager only if the body corporate passed an ordinary resolution approving the engagement and the material forwarded to members of the body corporate for the general meeting that considers the motion approving the engagement includes the terms of the engagement, including when the term of the engagement begins and ends (s 114, Standard Module).

A motion to be decided by ordinary resolution must be considered in general meeting. Section 104 of the Act provides that a body corporate must hold and conduct general meetings for the purposes and in the way prescribed under the regulation module. A motion proposing the engagement of a person as a body corporate manager may be submitted by a lot owner or by the committee (s 69, Standard Module). The agenda for a general meeting must include a motion submitted under section 69 (s 76(2), Standard Module). The notice of a general meeting must also be accompanied by a voting paper that states each motion and enables a person who is a voter for the meeting to cast a written vote on each motion to be considered at the meeting (s 71(4)(a) and (e), Standard Module). Where 2 or more motions propose alternative ways of dealing with the same issue are submitted as motions for consideration in general meeting, the agenda and the voting paper must include the motions as a motion with alternatives (s 71(5)(b), s 72, s 76(2)(a)(i), Standard Module).

The copy of the notice of the AGM provided by the Applicant has not been disputed by the owners who made submissions to the Commissioner. It would seem Motion 8 was proposed by the committee. The agenda for the meeting included the substance of the Motion: “Appointment of Body corporate manager”. The voting paper stated the Motion and referred to notes and submissions. The attached “Committee Notes” refers to three quotes, how the quotes could be inspected and a unit cost. The Applicant has questioned the material given to owners.

In my view, there are a number of irregularities in those parts of the notice that relate to Motion 8.

Firstly, the information given to owners with the notice of the AGM does not constitute the material required by section 114 of the Standard Module. In proposing the Motion, the committee had an obligation to provide owners with the material required by the legislation. The committee did not have the option of simply referring owners to the companies who apparently had quoted to provide administrative services to the Body Corporate. Owners were entitled to be given substantially complete information about what was proposed to be considered including for example, the functions proposed to be carried out by each proposed manager, their proposed costs and the term of each proposed engagement. Referring owners to places where they can inspect a quote does not represent proper disclosure or compliance with the legislation. Neither does having the quotations available for inspection at the meeting. Owners were entitled to this information with the notice of the meeting which must be given at least 21 days before the meeting (s 74, Standard Module). The notice period allows owners to: give consideration to each of the proposals; to possibly discuss the proposals with for example, other owners or the committee; and then to decide whether to participate in the voting at the meeting. Owners should have proper opportunity to make an informed decision. This was not possible given the notice given for the AGM.

Secondly, while the Motion stated in the voting paper and the accompanying notes related to the same issue, there was no connection for the purposes of voting on the Motion. Given the wording of the Motion, owners could not decide to engage a particular person. The only decision that could have been made was to agree to engage a body corporate manager. The engagement of a particular person required the submission and consideration of a proper motion to another general meeting.

Thirdly, if the intent of the Motion was to engage a person as stated in the minutes, then the Motion was improperly presented. Given the material presented, an owner could not vote for a particular person. It may be argued that owners could do so at the meeting after consideration of the tabled quotes. As I have already indicated, tabling quotes at the meeting does not constitute compliance with the legislation. It should also be noted that a voter must be able to cast a written vote or if decided by the body corporate—may cast an electronic vote (s 86(1), Standard Module). A written vote must be cast by giving the voting paper to the secretary before the start of the meeting (s 86(2), Standard Module). While the voting paper included provision for recording a yes/no/abstain vote on the Motion, it was not possible for a voter reading Motion 8 as stated in the voting paper (or the information in the accompanying notes) to record a written vote for a particular person.

Lastly, it is apparent from the minutes that three alternative persons were actually proposed for engagement. Each of these alternatives should have been submitted for consideration by the Body Corporate as individual motions and, given section 72 of the Standard Module; the motions should have been presented to owners in the voting paper as a motion with alternatives. This is the only way alternative proposals could be considered. The fact this procedure was not applied constitutes a significant error. There was no way an owner could indicate a vote for the Motion and for one of the submitted alternatives.

While the Motion presented to the AGM was not contrary to the legislation, the resolution passed by the Body Corporate is. Given the material stated in the notice of the AGM, the Body Corporate could not engage a person as a body corporate manager at the meeting. The fact that the Body Corporate did so was contrary to the legislation. For this reason, I have ordered that the resolution passed on Motion 8 at the AGM is void.

The Strata-Link Services quotation
The Applicant has also sought an order that Strata-Link Services be engaged for an interim period of three months. The Applicant has not stated the basis of this engagement.

It is evident from the minutes of the AGM that a committee was elected. A body corporate manager is essentially engaged to supply administrative services to the body corporate (s 14, Act). In most cases, a manager is authorised to exercise powers of an elected executive member of the committee — chairperson, secretary and treasurer (s 119, Act).

A body corporate is not compelled to engage a person as a body corporate manager. In the absence of the engagement of a body corporate manager, the elected committee members perform their elected functions. As I have voided the resolution passed on Motion 8, the elected members will now have to perform these functions. However, the order does not prevent the Body Corporate from properly deciding to engage a person as a body corporate manager. For example, the committee may decide to call an extraordinary general meeting to consider the engagement of a person.

In the circumstances, I do not consider the outcome sought by the Applicant is warranted.

Mr Butler not be permitted to vote or participate on the committee when in the position of body corporate manager.
The Applicant has not provided any grounds to support this outcome sought. She has not referred to specific instances where Mr Butler has voted at a committee meeting when he has been engaged as a body corporate manager.

Certainly, a person engaged as a body corporate manager is a non-voting member of the committee (s 12, Standard Module). However, in the absence of evidence that a vote has been improperly made, there is no basis for making an order.

Other issues
The Applicant also expresses concern about the contributions passed at the AGM payable to the administrative fund and the sinking fund. As the Applicant has not sought an outcome with respect to the relevant motions passed at the AGM, I cannot make an findings with respect to the claims being made.

Number of Scheme:	59
Name of Scheme:	Regal Court
Address of Scheme:	22 Barret Street Bungalow Qld 4870

Queensland Body Corporate and Community Management Commissioner - Adjudicators Orders

Regal Court [2009] QBCCMCmr 48 (11 February 2009)