Cathedral Place [2010] QBCCMCmr 249 (3 June 2010)

Name of Plan:	Cathedral Place
Number of Building or Parcel:	MCP 106902
Address of Parcel:	41 Gotha Street FORTITUDE VALLEY QLD 4006

I hereby order that the decision of the executive committee at its meeting dated 2 November 2009 to authorise the payment of the Gadens invoice in the amount of $1,639.95 (Motion 9a), is void.

I further order that the decision of the executive committee at its meeting dated 4 June 2009 to proceed with the Aspark quote (minuted at Item 1 under ‘Resident Managers Report’), is void.

I further order that in all other respects the application for order by The Proprietors Kensington Sandringham Building Units Plan 106966 against the Cathedral Place Community Body Corporate, is dismissed.

Application
This application is by The Proprietors Kensington Sandringham BUP 106966 (Applicant) seeking orders against the Cathedral Place Community Body Corporate (CPCBC):

Jurisdiction
The Applicant is a member of the CPCBC. It has been demonstrated the committee of the Applicant resolved to make this application. A committee decision is a decision of the body corporate (s 46(2), Building Units and Group Titles Act 1980).

The CPCBC was established under the MUD Act. Section 214A of the MUD Act provides: “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”. Part 5 of the BUGT Act concerns disputes. Section 77(1) provides: “A referee may, pursuant to an application of a body corporate,...a proprietor...in respect of a parcel, 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.”

The Applicant questions decisions made at committee meetings of the CPCBC. I am satisfied the dispute is about the operation of the MUD Act and given the stated parties, it may be dealt with under section 77(1) of the BUGT Act.

Submissions
Pursuant to section 73 of the BUGT Act, submissions were sought from the members of the CPCBC (excluding the Applicant) and the committee for the CPCBC. The time for making submissions was subsequently extended.

Submissions were made by Gadens Lawyers for the CPCBC. The Applicant made a written reply to these submissions.

Decision
Outcome 1
The Applicant provided a copy of the minutes of the executive committee meeting dated 2 November 2009 where, at Motion 9a, the committee resolved to “authorise the payment of the Gadens invoice in the amount of $1,639.95 for advice regarding the requisitioning of the Extraordinary General Meeting be paid”.

The Applicant submits this payment was for the reimbursement of expenses incurred by two member nominees (Mr Edwards and Mr Rich) for Gadens solicitors to provide advice about the requisition of an extraordinary general meeting by the members. It states the expenditure is contrary to section 190 of the MUD Act as it was not approved in general meeting.
The CPCBC submits the Gadens invoice related to work performed under the specific instructions of Mr Edwards, nominee for the Duhig body corporate and Mr Rich, nominee for the Canterbury & Westminister body corporate; the work was not under the instructions of the executive committee of the CPCBC. It states the invoice is not expenditure undertaken by the executive committee and is not subject to section 190. In response, the Applicant submits the disputed resolution clearly purports to authorise expenditure.

The CPCBC has the powers and duties stated in section 176 and 177 of the MUD Act. There must be an executive committee (s 185(1)). A decision of the executive committee on a matter that is not a restricted matter is a decision of the CPCBC (s 189(2)). A restricted matter includes a matter on which a decision may only be made by the CPCBC under a comprehensive resolution or in general meeting of the CPCBC (s 189(1)(d)). Section 190 restricts the power of the executive committee to undertake expenditure. Section 191 provides that the CPCBC may, in general meeting, decide that a matter may be determined only in general meeting.

(1) The executive committee of a body corporate may undertake expenditure only if—

(2) In relation to any proposed expenditure that the executive committee is unable to undertake because of subsection (1), the executive committee must—

(a) submit the proposal for determination at an extraordinary general meeting of the body corporate convened for the purpose of, or for purposes that include, consideration of the proposal; and

(b) if the proposed expenditure is for work to be performed or the purchase of personal property—submit at least 2 tenders to the meeting with the proposal.

(a) in payment of any premium for insurance taken out for the body corporate; or

(b) to comply with a notice or order served on the body corporate by a court, a local government, the State, the Commonwealth or a provider of a public utility service; or

(c) in discharge of a liability incurred in relation to an obligation of the body corporate authorised by the body corporate in general meeting.”

This section restricts the power of the executive committee to undertake or authorise expenditure of CPCBC money. The power of the executive committee to undertake expenditure is, unless subsections (1)(b), (3)(a) or (3)(b) applies, subject to decision of the CPCBC in general meeting. Firstly, the executive committee may undertake expenditure authorised by comprehensive resolution in general meeting (s 190(1)(a)). Secondly, if the executive committee cannot undertake expenditure on a proposal because of an authorisation made under subsection (1), it must submit the proposal for consideration in general meeting (s 190(2)). Thirdly, expenditure is permitted to discharge a liability authorised in general meeting (s 190(3)(c)). Lastly, the CPCBC may direct that a matter can only be determined in general meeting (s 191).

It is not argued that the subject of Motion 9a was a matter reserved by the CPCBC for decision only in general meeting. In my view, the decision authorised spending CPCBC money. It is argued the section does not apply because the advice obtained from Gadens was not under the instructions of the executive committee. I do not believe the effect of the decision was altered in any way because Gadens was instructed by two members without CPCBC or executive committee authorisation. It was a decision to undertake expenditure. It is not claimed the decision was made in accordance with an authorisation of the nature mentioned in section 190(1). For instance, it is not submitted that the CPCBC had, by comprehensive resolution, authorised the executive committee to undertake expenditure within a specified limit and the amount approved by Motion 9a was within that limit. Further, it is not argued that the expenditure was of a nature mentioned in section 190(3). There is nothing to suggest the expenditure discharged a liability authorised by the CPCBC in general meeting (s 190(3)(c)).

In the circumstances the committee did not have the power to make a decision to undertake the expenditure proposed in Motion 9a (s 189(1)(d)). For these reasons, I have made an order voiding the resolution passed on Motion 9a.

Outcome 2
The Applicant provided a copy of the minutes of the executive committee meeting dated 4 June 2009 where, at Item 1 under ‘Resident Managers Report’, it is minuted: “The Star BMS agenda for maintenance repairs was reviewed by item...The meeting resolved accordingly (by item). 1. Proceed with Aspark quote Carried 4 For, 2 Abstain”.

The Applicant submits the CPCBC has not authorised payment of the electrical works approved by the executive committee and given the cash book provided by the body corporate manager, $12,570.84 was paid on 30 September 2009. The Applicant argues section 190 of the MUD Act has not been complied with. The expenditure has not been approved in general meeting and the executive committee did not have the capacity to approve the quote.

The CPCBC submits section 190 relates only to proposed or future expenditure of the executive committee. It states the executive committee approved the electrical works and the CPCBC paid for the works on 30 September 2009. The Applicant responded section 190(3)(c) cannot apply as the invoice was not approved by the CPCBC before payment.

There is nothing in submissions which suggests the proposal to proceed with the Aspark quote should, in the circumstances, be treated any differently to the subject of the abovementioned Motion 9a. I am satisfied from submissions that the proposal related to the executive committee undertaking expenditure, and that committee did not have the power to make a decision to undertake the expenditure proposed in Motion 9a (s 189(1)(d)).

Outcome 3
The Applicant seeks an order that the abovementioned expenditures need to be put to a general meeting of the CPCBC as a comprehensive resolution for approval for payment.

The CPCBC submits the Gadens invoice and the Aspark invoice will be submitted for consideration in general meeting. On 26 May, I asked the Body Corporate Manager to provide a copy of the minutes of any general meetings of the CPCBC held since January 2010 (s 73(1)(f), BUGT Act). On 27 May, a copy of the minutes of extraordinary general meetings dated 8 January 2010, 25 February 2010 and 18 May 2010 was provided. The minutes of the meeting held on 25 February indicate: Motion 9 submitted by the nominee for Duhig body corporate to ratify, by ordinary resolution, the payment of $11,384.64 to Aspark was carried on the casting vote of the chairperson; and Motion 10 submitted by the nominee for Duhig body corporate to, by ordinary resolution, reimburse Randall Edwards and Anthony Rich costs associated with requisitioning of an extraordinary general meeting by paying Gadens Lawyers $1,639.55 was carried on the casting vote of the chairperson.

There is no evidence that either resolution has been disputed. The validity of either resolution is not a matter for determination in this application. However, the Applicant has argued that business of the nature stated in both motions should have been decided by comprehensive resolution because of section 190. The CPCBC submits a motion seeking reimbursement of the expenses incurred would not be subject to section 190 as it would not be a motion to authorise the executive committee to expend money and the motion could be determined by ordinary resolution. The CPCBC also stated section 190 would not apply to a motion proposing ratification of the payment of the Aspark invoice as the invoice would not be body corporate authorisation of a proposed or future expenditure of the executive committee as the expenditure has been incurred and payment made.

I do not consider the restrictions on the powers of the executive committee to undertake expenditure similarly restrict the power of the CPCBC to, in general meeting, decide to undertake expenditure. With respect to the issue of the type of resolution that would be required to decide each motion, I tend to agree with the CPCBC for the reason I do not believe either motion as submitted proposed the executive committee undertaking expenditure. I also note it is not argued that the legislation required another type of resolution to decide the matters the subject of Motions 9 and 10.

Queensland Body Corporate and Community Management Commissioner - Adjudicators Orders

Cathedral Place [2010] QBCCMCmr 249 (3 June 2010)