GC3 [2009] QBCCMCmr 52 (16 February 2009)

Last Updated: 9 March 2009

REFERENCE: 0999-2008

ORDER OF AN ADJUDICATOR

MADE UNDER PART 9 OF CHAPTER 6

BODY CORPORATE AND COMMUNITY MANAGEMENT ACT 1997

Number of Scheme:	38396
Name of Scheme:	GC3
Address of Scheme:	803 Stanley Street WOOLLOONGABBA QLD 4102

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

Rick Ng, a co-owner of lot 458

I hereby order that the application for an adjudicator’s order declaring that the body corporate committee’s calling of the extraordinary general meeting (EGM) to be held on 4 December 2008 has not followed the requirements of the Act and the applicable Regulation. is dismissed.

STATEMENT OF ADJUDICATOR’S REASONS FOR DECISION - REF 0999-2008

“GC3” CTS 38396

Scheme

GC3, CTS 38396 was registered as a building format plan of subdivision in April 2008 and consists of 154 lots. It is regulated by the Body Corporate and Community Management (Accommodation Module) Regulation (the Accommodation Module).

Application

This application was lodged on 20 November 2008 by a co-owner of lot 458 who is seeking the following Final Outcome:

An adjudicator’s order declaring that the body corporate committee’s calling of the extraordinary general meeting (EGM) to be held on 4 December 2008 has not followed the requirements of the Act and the applicable Regulation.

The applicant also previously sought the following Interim Order:

An order directing the proposed Extraordinary General Meeting on 4/12/08 to be cancelled or postponed (or alternatively, directing resolutions of the EGM to be suspended from being carried until a determination on this Adjudication Application and a determination on the related adjudication application reference no. 860-2008 are made.

On 8 December I declined to make the interim orders sought for the following reasons:

• the balance of convenience did not favour an order to prevent the Extraordinary General Meeting from proceeding because a good deal of preparation and expense is involved in organising a general meeting for a scheme of this size, and motion 2 regarding the Shared Facilities Agreement was only one of numerous motions to be considered at the EGM.
• on the available evidence, I was also of the view that the resolution upon motion 2 was most probably a valid resolution of the body corporate and therefore declined to prevent the implementation of the resolution upon motion 2.
  

However, I also advised that the application for final orders remained outstanding and that I proposed to afford the body corporate and all lot owners an opportunity to make submissions before making a decision upon the final orders sought by the applicant.

Background

For the purposes of this final order it is appropriate to revisit background material contained in the statement of reasons accompanying the interim orders.

The applicant states that on 12 November 2008, the body corporate manager distributed the following papers to all lot owners:

• “Final version” of the minutes of the first committee meeting held on Friday 10 October 2008;
• “Flying Minute” of vote outside committee meeting on Wednesday 19 November 2008; and
• Notice of EGM to be held on Thursday 4 December 2008.
  

However, the applicant does not believe that the meeting was properly called for a number of reasons including the following:

• The “flying minute” resolution does not specify any motions and/ or matters authorised by the committee to be included on the agenda of the proposed EGM;
• The resolution allowing the Secretary to call an EGM at any time on any date is not in the best interests of all owners;
• The flying minute was dated 19 November but distributed on 12 November;
• The flying minute has not been ratified by a formal committee meeting;
• Only 5 of the 7 committee members voted on the motion;
• A 7 day period has not been allowed for any Notice of Opposition against a committee resolution to be raised by lot owners in accordance with the Act and Regulation prior to the Notice of EGM being distributed to lot owners.
  

In reply, the body corporate made the following submissions:

• Section 63(1) of the Body Corporate and Community Management (Accommodation Module) Regulation 2008 states that a resolution of the committee is required to give a member of the committee authority to call a general meeting, but there is no requirement for the resolution to contain motions and/ or matters to be tabled at that general meeting;
• The Secretary is entitled to determine the date, time and venue of the meeting;
• If, as the applicant contends, a motion voted on outside a committee meeting could not be acted on until after it had been ratified at the next committee meeting, it would defeat the purpose of having a vote outside a committee meeting;
• The motion was to be tabled at the next committee meeting as required by subsection 54(6);
• Subsection 54(1) states that a resolution on a motion is valid if the majority of voting (committee) members agree to vote on a motion and by the applicant’s own admission 5 of the 7 members voted on the motion with a result of Yes – 5, No – 0, abstain – 0.;
• The matter had to be dealt with urgently to ensure that the Shared Facilities Agreement (SFA) could be tabled at the AGM for the principal body corporate and it was not practicable to deal with the matter at a formal committee meeting. The principal body corporate was due to hold its AGM on 11 December 2008 and therefore the subject motion had to be considered at an EGM of the GC3 body corporate which needed to be held by 4 December at the latest, to ensure that the SFA could be tabled at the AGM of the PBC for ratification.
• The resolution to enter into a new SFA and subsequent execution of a new agreement would remove any uncertainty about the validity of arrangements to share the facilities;
• The application should be dismissed.
  

On Friday 5 December, 2008 I was further advised that Motion 2 regarding the SFA was voted upon on 4 December with the following results:
51 votes for; 2 votes against; 0 Abstain.

Subsequently, the applicant made further submissions including the following:

• He believes that the body corporate is not complying with the legislation;
• Minutes of the 10 October committee meeting were redistributed as the original minutes were erroneous;
• He believes that minutes of the committee meeting and AGM, both held on 4 December were also erroneous in certain respects;
• The on-site caretaker is not entitled to vote at general meetings but his vote was recorded at the EGM;
• He believes that the minutes of the committee meeting should record that two lot owners who did not attend a committee meeting abstained from voting;
• The original owner/ developer still holds approximately 25% of the lots (approximately 40);
• He does not believe that Mr Stamp or Ebsworth Lawyers were authorised to make submissions on behalf of the GC3 or principal body corporate;
• Many purchasers did not conduct proper searches prior to purchase of their property which would have revealed that the shared facilities were not available to all lot owners;
• He believes that many of the submissions made by Ebsworth Lawyers are misleading;
• No lot owner has been prevented from using the facilities within the GC3 community titles scheme.
• He believes that the resolution carried at the 4 December 2008 EGM involved a decision to ratify the original agreement which was invalid;
• 51 persons voted in favour of the above resolution at the EGM but the applicant believes that the caretaking service contractor was not entitled to vote at the EGM;
• He questions why the 50 persons who voted in favour of the resolution at the EGM did not make submissions regarding his dispute resolution application.
  

JURISDICTION

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 authorization 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)).

DETERMINATION

This application was lodged on 20 November 2008 by a co-owner of lot 458 who is seeking the following Final Outcome:

An adjudicator’s order declaring that the body corporate committee’s calling of the extraordinary general meeting (EGM) to be held on 4 December 2008 has not followed the requirements of the Act and the applicable Regulation.

The subject resolution reads as follows:

That in accordance with By-law 12 of the Community Management Statement that the shared facilities agreement between the Body Corporate for Gabba Central CTS 37104 and the body corporate for GC3 CTS 38396 in the terms of the agreement whereby facilities located on GC3 CTS 38396 common property are shared with Gabba Central CTS 37104, be approved and executed by the Body Corporate for Gabba Central CTS 37104.

The applicant has argued that resolutions of the EGM, and in particular, the above resolution, are invalid because the resolution by the committee to convene the subject extraordinary general meeting, was invalid. In support of this argument the applicant has argued that:

• The “flying minute” resolution did not specify motions and/ or matters authorised by the committee to be included on the agenda of the proposed EGM;
• The resolution allows the Secretary to call an EGM at any time on any date;
• The flying minute was dated 19 November but distributed on 12 November;
• The flying minute had not been ratified by a formal committee meeting;
• Only 5 of the 7 committee members voted on the motion;
• A 7 day period was not been allowed for a Notice of Opposition to be raised by lot owners.
  

However, I am unable to accept the above arguments. Firstly, while section 63(1) of the Body Corporate and Community Management (Accommodation Module) Regulation 2008 requires a resolution of the committee to give a member of the committee authority to call a general meeting, there is no requirement for such resolution to contain motions to be tabled at that general meeting.

Secondly, section 54 of the Accommodation Module Regulation provides as follows:

54 Voting outside committee meetings
(1) A resolution on a motion before the committee is a valid resolution of the committee, even though the motion is not decided at a meeting of the committee called and conducted
under this part, if—
(a) notice of the motion is given to all committee members or, in an emergency, as many members as it is practicable to contact; and
(b) a majority of all voting members of the committee entitled to vote on the motion agrees to the motion.
(2) The notice must be given in writing, and the members’ agreement to the motion must be given in writing but, in an emergency, the notice may be given, and the members’ agreement expressed, orally or by another appropriate form of communication.
(3) Advice of the motion must be given, at the same time notice of the motion is given or, in an emergency, as soon as reasonably practicable, to each owner of a lot, other than an owner who—
(a) has instructed the secretary that the owner does not wish to be given advice of committee meetings; and
(b) has not withdrawn the instruction.
(4) The notice and advice of the motion may be given by—
(a) the secretary; or
(b) another member of the committee who is authorised by a majority of voting members of the committee to give the notice and advice.
(5) For the operation of section 53(1) and (2), the committee, in dealing with a resolution under this section, is taken to deal with the resolution at a meeting of the committee.
(6) A motion voted on under this section must be confirmed at the next meeting of the committee held after the motion is voted on.

Subsection 54(1) states that a resolution on a motion is valid if the majority of voting members agree to vote on a motion and as 5 of the 7 members voted on the motion with a result of Yes – 5, No – 0, abstain – 0. Consequently, I believe that the committee was entitled to act upon a resolution outside a committee meeting and call an EGM. It should be noted that unlike the Standard Module Regulation, the Accommodation Module Regulation does not give lot owners the opportunity to submit a notice of opposition with the Secretary in order to prevent a committee resolution from coming into effect

Finally, I note that the EGM was held on 4 December 2008 and lot owners decided to vote in favour of the Shared Facilities Agreement (51 votes for; 2 votes against; 0 Abstentions). The 51 votes in favour of the motion include the vote cast by the caretaking service contractor. Contrary to the arguments presented by the applicant, a caretaking service contractor is not disqualified from voting at a general meeting although such a contractor is prohibition from voting at meetings of the committee

Accordingly, it is my view that the resolution of the body corporate committee to call the extraordinary general meeting on 4 December 2008 was made in accordance with the requirements of section 54 of the Body Corporate and Community Management (Accommodation Module) Regulation and was a valid resolution of the body corporate. For these reasons I believe that the application should be dismissed.