LA Provence [2010] QBCCMCmr 109 (8 March 2010)

Last Updated: 14 April 2010

REFERENCE: 1024-2009

ORDER OF AN ADJUDICATOR

MADE UNDER PART 9 OF CHAPTER 6

BODY CORPORATE AND COMMUNITY MANAGEMENT ACT 1997

Number of Scheme:	5123
Name of Scheme:	LA Provence
Address of Scheme:	12 Canal Avenue RUNAWAY BAY QLD 4216

TAKE NOTICE that pursuant to an application made under the abovementioned Act by Thomas O’Keeffe and Judith Burrows, the owner of Lot 12

I hereby order that the application for an order by Thomas O’Keeffe and Judith Burrows, the owner of Lot 12 against the body corporate for LA Provence community titles scheme 5123, is dismissed.

STATEMENT OF ADJUDICATOR’S REASONS FOR DECISION - REF 1024-2009

“LA Provence” CTS 5123

The scheme
“La Provence” community titles scheme 5123 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 dated 27 October 2009 is by Thomas O’Keeffe and Judith Burrows, the owner of Lot 12 (Applicants) against the Body Corporate.

The Applicants submit the chairperson and the other members of the committee should be dismissed and an administrator appointed to restore integrity to the management of the Body Corporate. They say the attitude, disdain and derision of the committee members and the body corporate manager towards the legislation cannot be tolerated. The Applicants state that due to the serious nature of this matter and the fact that Mr Dariush-Far is a candidate for election as chairperson at the forthcoming annual general meeting, it is imperative that an interim order is made to prevent any further deterioration of the situation. They submit that Mr Dariush-Far has no legal or moral right to continue to defy attempts to remove him from the committee. Ultimately, the Applicants seek the appointment of an administrator to replace the present committee which they say has been complicit in Mr Dariush-Far’s actions. The Applicants state Mr Dariush-Far has been convicted of an offence.

The Applicants provided a copy of:

• The minutes of the Annual General Meeting dated 10 November 2008 (2008 AGM) highlighting Motions 3 to 5 relating to adopting budgets and fixing contribution to be levied on owners.
• A letter to the secretary dated 14 January 2009 from Tom O’Keefe expressing concern about a number of matters including two members of the committee, the occupiers of Lot 8 and the actions the Body Corporate Manager at the last annual general meeting stating “My resignation from the Committee is effective immediately”.
• A letter to the secretary dated 30 March 2009 from Tom O’Keefe about “the “appointment” of the owner of Unit 8 to the position of Chairperson”.
• A letter to all owners dated 16 July 2009 from Tom O’Keefe about his “very grave concerns regarding management...management...have embarked on a spree of reckless spending which if it continues will almost certainly result in a huge increase in Body Corp levies.” The letter expresses concern about gardening and cleaning costs, and costs to maintain stairwell walls saying the BCCM commissioner is well aware the “Committee has been completely uncooperative and irresponsible”.
• A Certificate of Order certified on 21 August 2009 by the Clerk of the Magistrates Court at Southport “that on the 12/08/2009 One Alexander Dariush-Far...was charged in the Magistrates Court at Southport...in relation to the following offences”: “Using a caariage service to menace, harass or cause offence”. The Certificate refers to section 474.17(1) of the Criminal Code Act 1995 (Cwlth) and states: “And the said defendant having found guilty of the said charge was convicted...”
• A proposed voting paper for the Annual General Meeting to be held on 10 November 2009 (2009 AGM) highlighting Motions 3 to 5 relating to adopting budgets and fixing contribution to be levied on owners and which includes a written note that the “proposed increase in levies is just over 40%”.
• The Balance Sheet and Income Statement for the financial period 1 September 2008 to 31 August 2009 and the proposed budgets for the year ending 31 August 2010 with a written note on the Balance Sheet that “these documents in my opinion would not stand up to an audit”.
  

Interim order
On 4 November 2009, I made an interim order “that Alex Dariush-Far’s position as chairperson of the committee for the body corporate for La Provence community titles scheme 5123 is vacant”.

Submissions to the Commissioner
On 9 November 2009, the Commissioner provided a copy of the application to Mr Dariush-Far, and to the Body Corporate for distribution to the owner of each lot (excluding the Applicant and Mr Dariush-Far) and the committee, with an invitation to respond to the matters raised in the application (s 243, Act).

Mr Dariush-Far submitted he was not convicted of an indictable offence as he was not sentenced to any imprisonment and the increase in levies is needed to maintain the building.

John Hopkinson made submissions on behalf of the committee (before the interim order was made) that Mr Dariush-Far was chosen by the committee to fill a vacancy created by Mr O’Keefe’s resignation in January 2009. He said the committee reviewed maintenance matters, and were concerned about fire installation inspections and maintenance of the basement pump. Mr Hopkinson stated levies had to increase to account for a deficit in the administrative fund. He submitted that the Body Corporate had agreed to audit the 2007-2008 financial statement. Mr Hopkinson said there is an active committee of seven members, it has not received any letters from other owners regarding the committee’s performance and it sees no need for the appointment of an administrator.

The owner of Lot 5 submitted the appointment of an administrator is an unnecessary cost and Mr Dariush-Far should be prevented from being on the committee if the criminal conviction prevents him from holding a position.

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 to resolve a dispute about a claimed or anticipated contravention of the Act or the community management statement; or the exercise of rights or powers, or the performance of duties, under the Act or the community management statement (s 276(1), Act).

Investigation
In accordance with the investigative powers of an adjudicator stated in section 271 of the Act, on 1 March 2010 I asked the Body Corporate Manager to provide a copy of the minutes of the 2009 AGM. The Manager provided a copy of the minutes on the same date. In my view, it is not necessary to conduct any further investigations before determining this application.

Decision
Mr Daruish-Far’s membership of the committee
In making the interim order, I stated (at pages 2 to 3 of the statement of reasons):

“In effect, the Applicants argue Mr Dariush-Far has been convicted of an indictable offence. Other than the Certificate of Order, the Applicants have not provided any basis for this claim. They have not provided any authoritative evidence that the offence stated on the Certificate is an indictable offence. Neither the committee nor Mr Dariush-Far has disputed the Certificate. Nor has either party argued that the offence is not an indictable offence.

The Certificate refers to section 474.17(1) of the Criminal Code Act 1995 (Cwlth) with provides: “A person is guilty of an offence if the person uses a carriage service; and the person does so in a way (whether by the method of use or the content of a communication, or both) that reasonable persons would regard as being, in all the circumstances, menacing, harassing or offensive”. The provision carries a penalty of imprisonment for 3 years. Section 1.1 of the Code provides: “The only offences against laws of the Commonwealth are those offences created by, or under the authority of, this Code or any other Act. Section 4G of the Crimes Act 1914 states: “Offences against a law of the Commonwealth punishable by imprisonment for a period exceeding 12 months are indictable offences, unless the contrary intention appears.”

Given this legislative scheme, it would seem the offence stated in the Certificate is an indictable offence. There is nothing to suggest that the kind of offence is altered because it was dealt with summarily. “An offence does not cease to be indictable because it is dealt with summarily: Ross v R [1979] HCA 29; (1979) 141 CLR 432 (21 June 1979)”: Encyclopaedic Australian Legal Dictionary. In the absence of any information to the contrary or suggesting otherwise, I am satisfied there is a question about the current position of chairperson to warrant making an interim order. There is nothing to suggest that section 33(2)(e) does not apply. In the circumstances of this dispute and given the annual general meeting would seem to be imminent, any uncertainty about Mr Dariush-Far’s position as chairperson on the basis of an election or appointment made before the decision of the Magistrate would not, in my view, be constructive. For these reasons, I have made the interim order. It should be noted that while I have made an interim order on the basis of the submissions made, the parties may want to make detailed submissions on this point before the matter is finally determined.

It should also be noted that this order does not affect Mr Dariush-Far’s eligibility to be a voting member of the committee. I am not aware of a legislative provision, and the Applicants have not referred to a specific provision, prescribing that a person eligible to be a voting member of the committee under section 10 of the Standard Module becomes ineligible to hold a committee position if the person is convicted of an indictable offence. It would seem a conviction only has an effect if the person is an existing member of the committee. There would appear to be nothing to suggest that a conviction prevents an eligible person from being elected or appointed as a member of a committee.”

I do not consider any further consideration of whether Mr Dariush-Far was convicted of an indictable offence is necessary. It is apparent that Mr Dariush-Far’s position as chairperson became vacant as a consequence of the interim order. I have also noted that neither the Body Corporate nor Mr Daruish-Far provided any persuasive argument contrary to the views I expressed in the interim order. However, I do not consider it has been demonstrated the Body Corporate failed to act on indisputable evidence that Mr Daruish-Far was convicted of an indictable offence, and that this inaction caused for example, the Body Corporate to act or be administered contrary to the legislation.

I note that Mr Daruish-Far became a member of the committee at the subsequent 2009 AGM. In reasons for making the interim order, I indicated there “would appear to be nothing to suggest that a conviction prevents an eligible person from being elected or appointed as a member of a committee”. While there is no evidence the election at the 2009 AGM has been disputed, I do not consider there is any legal basis, given the material presented, to suggest this view is incorrect.

In my opinion, the issue relating to Mr Daruish-Far’s involvement as a committee member is not a basis for making an order to appoint an administrator.

Appointment of an administrator
The Applicants have argued that an administrator is necessary to restore integrity to the management of the Body Corporate. In letters to the secretary, Mr O’Keefe has expressed concern about some committee members, spending, increased contributions being levied on owners and some maintenance matters. The Applicants provided a copy of some Body Corporate documentation containing handwritten notes.

The request to appoint an administrator has not been supported by owners. While the absence of support from owners is not a reason to dismiss the Applicants’ claims, the onus rests with the Applicants to establish there is a substantive basis to make an order in the terms sought.

In making the interim order, I referred to an appeal decision in the Commercial and Consumer Tribunal stating (at page 3 of the statement of reasons):

“The appointment “of an administrator...is a significant step since it takes responsibility for the conduct of the affairs of the body corporate out of the hands of the committee and vests it in the administrator. An applicant must therefore demonstrate to the required standard that such a step is appropriate. Typically, without attempting to be exhaustive, there will be evidence that the body corporate is so dysfunctional that it cannot operate properly within the statutory framework that governs it, or that there is a well founded suspicion, on the part of an applicant for appointment of an administrator of financial malpractice within the body corporate, or that there is conduct that amounts to undue oppression in the conduct of its affairs. Without more, mere disagreements between the members, especially when the disputes are due to reasonably held differences of view and there are means available to resolve them by reference to external processes” [SURACE V COMMISSO [2009] CCT KA002-09, paragraph 44]. At paragraphs 54 and 55, the Tribunal stated: “The fundamental problem...is that it is not explained on what basis the fact that there have been differences of opinion between the parties justifies the appointment of an administrator. To justify that conclusion it was, in my view, necessary, to make a sufficient analysis of the nature of the disagreements to show that they demonstrate that there is a need for an administrator to be appointed because for example, the attitudes of the parties demonstrate that the Body Corporate cannot function in accordance with the legal framework within which it operates, or they are evidence of oppression of one by the other. The mere fact that there are disagreements between parties is not enough. The existence of legitimately held but divergent points of view which are not unreasonable does not demonstrate that the Body was dysfunctional merely because the parties do not agree...”

Integral to the administration of any body corporate is that it has an annual general meeting each year within the prescribed timeframe. An annual general meeting must be held within 3 months after the end of the scheme’s financial year (s 66, Standard Module). The agenda of an annual general meeting must include particular motions (statutory motions) about: reviewing the past financial year’s income and expenditure; considering future spending needs through the adoption of an administration fund budget and a sinking fund budget; fixing contributions to be paid by lot owners; determining whether the next financial year’s accounts should be audited; and reviewing insurance (s 76(3) and dictionary, Standard Module). A committee must be chosen at each annual general meeting (s 13(1), Standard Module).

While it was held subsequent to the making of the application, the minutes of the 2009 AGM indicate that participating owners supported, without opposition, the motions stated in the agenda, including the statutory motions. It is also apparent that a committee of 7 persons was elected. Nothing has been presented demonstrating the election was held contrary to the legislation. In my view, the unchallenged resolutions of the Body Corporate are significant. The resolutions indicate the Body Corporate is dealing with the business required by the legislation and that there is support from owners. There is no evidence that any decision has been disputed.

Neither have the Applicants questioned any annual general meetings held before the application was made. Nor have they argued that meetings are being called and held incorrectly or that the committee has made decisions contrary to the legislation. There is nothing to suggest the committee has made decisions outside its legislative powers or that it has refused to act in a way required by the legislation. There is no evidence the Applicants have had reason to dispute Body Corporate actions on a regular basis or that there are clear and undeniable reasons to support a view that the administration of the Body Corporate should be taken away from the lot owners.

They would seem to have some issues about financial matters. However, the Applicants have not provided any persuasive material to support their views or to cast doubt on the decisions made by the Body Corporate. The Applicants have expressed concern about the increase in contributions fixed to be levied on lot owners. This concern is not a reason to appoint an administrator. If the Applicants have grounds to support a view that a contribution levied on lot owners is unreasonable and the matter was not resolved internally, an order could be sought for example, to reduce the amount of the contribution to a reasonable amount (see s 276(3) and s 11, schedule 5, Act). Further, if the Applicants believe there is argument to support having Body Corporate accounts audited and the Body Corporate refused to do so, a dispute resolution application could be made proposing the appointment of an auditor for this purpose (see s 276(3) and s 12, schedule 5, Act).

The Applicants may have a difference of opinion with other owners about the direction of the administration of the Body Corporate. However, they have not provided any material which demonstrates that, on balance, their views prevail over those expressed by owners.

For these reasons, I do not consider it is appropriate or necessary in the circumstances to make an order in the terms sought.