Augusta Terraces [2010] QBCCMCmr 219 (20 May 2010)

Number of Scheme:	15130
Name of Scheme:	Augusta Terraces
Address of Scheme:	97-111 Routley Drive KOORALBYN QLD 4285

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

I hereby order that, pending a final determination, the body corporate for Augusta Terraces must not take any action pursuant to any resolutions passed at its extraordinary general meeting called for 22 May 2010.

This is an interim order and will remain in effect for a period of not longer than six months. It is the responsibility of the applicants to apply to extend this order if no final determination has been made within that period. This order will automatically lapse upon a final order being made or this application being withdrawn.

Augusta Terraces Hotel Community Titles Scheme (Augusta) is a 56 lot scheme under the Body Corporate and Community Management Act (Act) and the Act’s Standard Module Regulation (Standard Module).

This is an application for interim orders. It arises out of an application by Pamela Moran, owner of lot 44 (applicant) against the body corporate for Augusta (respondent). The applicant seeks interim and final orders to cancel a proposed extraordinary general meeting on 22 May 2010.

An interim order will not be granted unless is it necessary due to the nature or urgency of the circumstances to which the application relates (Act, 279). Further, any orders granted must be just and equitable in the circumstances (Act, 276).

In determining whether it is just and equitable to grant interim relief it is relevant to briefly consider whether the application raises any serious questions for final determination. It is also relevant to consider whether any inconvenience likely to result from the interim order is outweighed by the potential detriment alleged in the application. Any evidence that an interim order is necessary to prevent serious or irreparable harm will be significant.

The applicant submits that the committee failed to give owners an opportunity to object to the location of the meeting that is more than 15 kilometres from the location of the scheme (Standard Module, 75). It is also submitted that the committee did not include all relevant reports and did not distribute minutes of the committee meeting that proposed the extraordinary general meeting (Standard Module 55-57).

A response from the secretary does not deny the alleged procedural failures but says that the applicant is merely trying to thwart the body corporate taking action against her in relation to a $4,000 fine imposed on the body corporate because she was involved in switching off a mandatory fire alarm system last year. The body corporate manager has responded to the effect that the manager has called the meeting under instructions from the secretary.

The grounds provided by the applicant satisfy me that there are serious questions to be determined regarding compliance with the procedural requirements of the legislation. However, a question arises as to whether anyone has suffered a material disadvantage or prejudice as a result of these alleged failures to strictly comply with the legislative requirements. There is no provision in the legislation that specifically allows for an adjudicator to waive of an irregularity in the calling or conduct of a body corporate meeting. However, it seems that the intention of the legislation is that a failure to comply with the procedural requirements for the holding of meeting set out in the Regulation Modules will not automatically render the meeting void.[1]

The courts have commented that non-compliance with the regulations that is of an insubstantial nature should not be allowed to imperil the actions of bodies corporate or their committees.[2] It has also been held that an adjudicator, in giving directions for the calling and holding of a meeting, is not limited to the time frames provided in the legislation.[3] The intention of the legislature appears to have been that, as with the traditional rules of meeting procedure, the provisions of the Regulation Modules enable a meeting to proceed in an orderly fashion so as to ascertain the will of owners on each proposal but are not a series of mandatory rules that invalidate all of the proceedings of the meeting if one essential step is not followed.[4]

On reading the regulation modules in the context of the legislation as a whole, the intention of the legislature appears to be that a failure to comply with the requirements of the modules will not result in invalidity except where there is a lack of good faith or where an applicant suffers some real prejudice that outweighs the prejudice to the body corporate in requiring that the meeting be held again.[5] Another important consideration is that an owner may be seen to have waived their right to raise an objection if they had an opportunity to raise the issue at the meeting or request a vote seeking to overturn the chairperson’s ruling on the issue.[6]

In the circumstances, it seems appropriate to grant an interim order preventing the body corporate acting upon any of the resolutions passed at the extraordinary general meeting for the time being. Owners will have an opportunity to vote on the motions and submissions can be sought subsequently as to any prejudice suffered from any failures to comply with procedural requirements regarding the calling of the meeting. If a significant majority vote in favour of any particular motion and only very few people indicate that they were unable to properly express their vote then it may well be appropriate to allow the outcome of the voting to stand. On the other hand, it may become obvious from the submissions that a significant number of voters have been materially disadvantaged by non-compliance with procedural requirements in which cast the resolution in question should be declared void.

Of course, if the committee considers urgent action is required on any matters and is unwilling to await the outcome of the present application then there is nothing to prevent the committee calling an additional meeting to consider the same matters in accordance with all procedural requirements.

For these reasons, I make the interim order above. If necessary, a final order will be made in due course.

[1] This follows from section 242 of the Act that effectively deems a meeting to be valid if there is no challenge to the validity of the meeting within the appropriate time limit. This intention can also be inferred from the drafting of section 72 of the Standard Module, section 70 of the Accommodation Module and section 39 of the Commercial Module that specifically provide an action is void for failure to comply with those sections. It may be implied that non-compliance with other sections will not automatically render the resulting resolutions void in the absence of a similar explicit statement.
[2] Wei-Xin Chen v Body Corporate for Wishart Village CTS 19482, Appeal 4080 of 2000, District Court Brisbane, 29 May 2001.
[3] Holloway and Wilson and Watts v Meek District Court (Maroochydore), Appeal 22/1998, Dodds DCJ, 24 December 1998.
[4] Refer Johnson v Beitseen (1989) 41 IR 395 at 415. As to ascertaining the intention of the legislature in circumstances that would traditionally be described as ascertaining whether rules are mandatory or merely directory, see Project Blue Sky Inc v Australian Broadcasting Authority [1998] HCA 28; (1998) 194 CLR 355 at paragraphs 91 to 93.
[5] Wei-Xin Chen v Body Corporate for Wishart Village CTS 19482, Appeal 4080 of 2000, District Court Brisbane, 29 May 2001. See also Canberra Labor Club Limited and the Companies Act 1981 [1986] ACTSC 330, 27 October 1986 at paragraphs 12 to 15, albeit this decision being based on specific statutory provisions. See generally Project Blue Sky Inc v Australian Broadcasting Authority [1998] HCA 28; (1998) 194 CLR 355 at paragraphs 91 to 93.
[6] Re Katoomba Coal & Shale Co Ltd (1892) 13 LR (NSW) (EQ) 70 at 75; Commonwealth v Verwayen 95 ALR 321 per McHugh J at 390-394. See also Johnson v Beitseen (1989) 41 IR 395 at 415. Note that this opportunity to raise a concern at or prior to the meeting appears particularly relevant to challenges to the validity of meetings under the Body Corporate and Community Management Act 1997 due to the section 238 requirement to attempt internal dispute resolution prior to lodging an application for conciliation or adjudication.

Queensland Body Corporate and Community Management Commissioner - Adjudicators Orders

Augusta Terraces [2010] QBCCMCmr 219 (20 May 2010)