Royal Pines Resort Principal Body Corporate [2010] QBCCMCmr 259 (10 June 2010)

I hereby order that the members of the Committee for the Royal Pines Resort Principal Body Corporate purportedly elected at the annual general meeting of the Body Corporate on 23 March 2010, are deemed to hold those Committee positions from 23 March 2010 until this application is finally resolved or they are otherwise removed from their position pursuant to section 159 of the Integrated Resort Development Act 1987.

I further order that Committee for Royal Pines Resort Principal Body Corporate shall provide a copy of this order and the statement of reasons to each of its members within seven (7) days of the date of this order.

This interim order has effect until three (3) months have elapsed from the date of this order, a further interim or final order for the application is issued, or until the application is withdrawn or otherwise ended (whichever is earlier).

Royal Pines Resort is an approved resort established under the Integrated Resort Development Act 1987 (IRDA). The Royal Pines Resort Principal Body Corporate (PBC) is an entity created by virtue of section 139 of the IRDA.

This application was made by the PBC (applicant) on 7 June 2010, pursuant to the resolution of the PBC Committee dated 29 April 2010. The application seeks the following interim order

A declaration that members of the Committee for the Principal Body Corporate for Royal Pines Resort are deemed to have been validly elected on 23 March 2010 and are to hold those positions until a final resolution of this application or otherwise by removal pursuant to s. 159 of the Integrated Resort Development Act 1987.

The IRDA is one of a number of pieces of legislation defined as a ‘specified Act’ under section 326 of the Body Corporate and Community Management Act 1997 (BCCMA). Section 325(2)(a) of the BCCM Act provides that the previous Building Units and Group Titles Act 1980 (BUGTA) continues to apply to plans registered under the BUGTA for a specified Act.

Section 179A(1) of the IRDA provides that a dispute about the operation of the IRDA or the rights and obligations of persons under the IRDA may be dealt with under part 5 of the BUGTA. Part 5 of the BUGTA concerns disputes, and sections 75 to 94B provide for orders by a referee. Section 77(1) of BUGTA provides general powers of a referee to make orders, as follows.

(1) A referee may, pursuant to an application of a body corporate, a body corporate manager, a proprietor, a person having an estate or interest in a lot or an occupier of a lot in respect of a parcel, make an order on any person entitled to make an application under this subsection or on the chairperson, secretary or treasurer of the body corporate 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.

I am satisfied that the applicant, as the body corporate, is a party entitled to lodge this application and that the application relates to the exercise of a legislative duty or function of the PBC. Section 77(1) provides that a referee may only make an order to settle a dispute or rectify a complaint. I am of the view, therefore, that this section requires that there be a respondent to the application – being the party with whom the applicant is in dispute, or the party who has made the complaint or against whom the complaint is made. I consider that applicant cannot be in dispute with, or make a complaint against, itself. BUGTA contains no provision akin to section 227(2) of the BCCMA which provides for declaratory orders in the absence of a respondent.

The applicant has declined to name a respondent, and considers this is not necessary. While the application does not seek orders against the Body Corporate for Archer Hill, I am of the view that the application arises because of a complaint made by, or a dispute with, the Body Corporate for Archer Hill and as such I consider Archer Hill to be the respondent to the dispute.

(2) Where an applicant for an order under section 77(1) states in his or her application that the applicant requests an interim order, the referee may, if the referee is satisfied on reasonable grounds that, by reason of the urgent circumstances of the case, the referee should do so—

(a) make, under this subsection, any order that may be made under section 77(1) with respect to the application; and

(b) before the expiration of 3 months from the date on which it takes effect and upon a further request made by the applicant, renew an interim order that is in force by serving notice in accordance with subsection (6) that the order is renewed.

(a) that any power or duty of the referee under section 73(1) has not been exercised or performed with respect to the application; or

(b) where the referee has given written notice of the application under section 73(1)(c)—that any time specified under section 73(1)(d) or (e) in that or any further notice has not expired.

(4) An interim order made pursuant to an application for an order under section 77(1) ceases to have effect—

(a) at the expiration of 3 months from the date on which it takes effect or, where the referee has renewed the interim order, at the expiration of 6 months from that date; or

(b) where the interim order is revoked by a tribunal under section 107(1)(c) or by the referee under subsection (5)—when it is so revoked; or

(i) the referee makes an order under section 77(1) with respect to the application; or

(ii) the referee dismisses the application; before the interim order ceases to have effect under paragraph (a) or (b), when the order is made under section 77(1) or the application is dismissed, as the case may be.

(5) The referee may revoke an interim order and, if the referee does so, the referee shall serve notice in accordance with subsection (6) that the order has been revoked.

(6) A notice of the renewal or revocation of an interim order shall be served—

(a) except as provided in paragraph (b), on the body corporate for the plan to which the order relates; or

(b) where the order requires a person to do or refrain from doing a specified act—on that person.

(7) A person shall not in, or in connection with, a request for an interim order or for the renewal of any such order, make a statement that the person knows is false or misleading in a material respect.

This application relates to the election of the PBC Committee at the Annual General Meeting (AGM) for the PBC on 23 March 2010, and the validity of the current Committee.

On 27 January 2010 the then manager for the PBC issued notices inviting nominations for the PBC Committee. On 1 March notice of the AGM was sent to all PBC members. A Committee was then elected at the AGM.

On 23 April the Chairperson for the Body Corporate for Archer Hill, a body corporate which is a member of the PBC, wrote to the PBC raising concerns about the notices issued and the validity of the election. The letter was sent with the authorisation of the Archer Hill Committee, pursuant to its meeting on 13 April. The letter asserted that the notices inviting nominations did not comply with the mandatory provisions of Clauses 3(2)(b), 3(3) and (3)(4) of Schedule 3 of the IRDA, pursuant to section 158(7A) of the IRDA. Specifically the concerns were that:

Concerns were also raised in respect of the nominations the Body Corporate for Archer Hill, The Aspects, Circa and The Vistas, and the basis for comment in the AGM minutes that the Executive Committee must comprise three eastern representatives and four western representatives.

The PBC Committee discussed this correspondence on 29 April and resolved to engage legal representation regarding the matter. The meeting also resolved to lodge an application ‘as soon as possible’ to the Referee to seek confirmation of some issues and that all necessary steps would be taken to rectify any incorrect actions.

Various further correspondences occurred between the parties. On 12 May the body corporate manager for Archer Hill wrote to the PBC expressing concern about delays in pursuing the matter and noting that they considered that any PBC decisions made since the AGM were invalid as they were authorised by an improperly elected Committee. On 26 May the PBC solicitors (Hynes Lawyers) wrote to the Chairperson of Archer Hill, including a draft application and seeking their support for the way forward. Some negotiations occurred on the terms of the orders to be sought but the applicant has now provided correspondence indicating that Archer Hill has consented to the interim and final outcomes sought by this application.

The application does not seek to debate the validity of the AGM elections, although it suggests that any non-compliance with the legislative requirements was insubstantial[1]. Rather it asks to conduct a new election so that a Committee can be appointed whose validity is beyond question. The applicant argues that under the IRDA it has no capacity to call a new election itself.

Under section 76(3) of BUGTA a referee may make interim order notwithstanding that notices have not been issued pursuant to section 73(1)(c) and (d) of BUGTA inviting submissions.

The applicant has asserted that application is urgent as there are concerns regarding the validity of the Committee, its decisions, and potential liability issues. I note that it is over two and half months since the AGM was held, a month and a half since the concerns were raised by Archer Hill, over a month since the PBC Committee resolved to lodge this application. However, I accept that it is desirable to provide some certainty for the day-to-day operations of the PBC as soon as possible. Moreover, it is apparent that the principal complainant in the matter, the Body Corporate for Archer Hill, consents to the interim order sought. Accordingly I do not consider it necessary to delay the matter further by seeking submissions before making an interim order.

At this time, I am concerned with the threshold issue of whether interim orders are warranted in this application. In general the purpose of an interim order is to maintain the status quo in regard the matters in dispute until the substantive issues can be properly investigated, particularly with all affected persons being given the opportunity to make a submission. The onus is on an applicant to establish that the circumstances of the dispute warrant an interim order.

It is not appropriate to consider the substantive issues in the application in detail at this time. But to determine whether it is just and equitable to grant interim relief, it is relevant to briefly consider the issues raised in the application. As an interim order can be considered on an ex parte basis, a referee must be satisfied that the application raises serious legal questions and that the balance of convenience between the parties justifies injunctive relief. That is, an adjudicator must balance the inconvenience of granting relief now if final orders are ultimately refused against the inconvenience of refusing relief now if final orders are ultimately granted. Of particular relevance is evidence that an interim order is necessary to prevent serious or irreparable harm.

In this matter it is apparent that issues exist regarding the validity of the conduct of the PBC Committee election at the AGM. The applicant does not appear to dispute that there was some non-compliance with the legislative requirements, although it suggests that any failings were insubstantial in nature such that they were not sufficient to invalidate the election. However the applicant wishes to conduct a new election so that there will be no doubt by anyone at Royal Pines Resort as to the validity of the PBC Committee.

I consider that a referee has the capacity to order the PBC to call a new election, and this may well be an appropriate step. The Body Corporate for Archer Hill supports this step. However, an order of that type is final in nature and pursuant to section 75(1) of BUGTA a final order cannot be made before submissions are sought from affected parties in accordance with section 73(1)(c) of BUGTA. There may be scope to expedite the making of a final order once the submissions process has occurred. However, until that legislative process has been completed, the management of the PBC and the decisions of its current Committee remain in doubt.

In the circumstances I am satisfied that it is appropriate to make an interim order deeming that all members of the PBC Committee elected on 23 March 2010, are valid members of the Committee until the final determination of the dispute. This order will have the effect of securing any otherwise valid actions and decisions of the Committee made since 23 March 2010 and until the finalisation of this application. I will also require a copy of the order to be provided to each PBC member.

I will now proceed to invite submissions from members of the PBC in regard to the final orders sought by the applicant. As required by section 76 of BUGTA, the interim order has effect for a period of three months. I would anticipate that the submissions process and the subsequent investigation of the final orders should be complete within that timeframe however, if it is not the applicant may request a renewal of the interim order in writing.

[1] Wei-Xin Chen v Body Corporate for Wishart Village CTS 19482, Appeal 4080 of 2000, District Court Brisbane, 29 May 2001 (Unreported).

Name of Plan:	Royal Pines Resort Principal Body Corporate
Address of Building or Parcel:	Ross Street, Benowa, Qld 4217

Queensland Body Corporate and Community Management Commissioner - Adjudicators Orders

Royal Pines Resort Principal Body Corporate [2010] QBCCMCmr 259 (10 June 2010)