Bellcarra Retirement Resort Residents [2010] QBCCMCmr 26 (19 January 2010)

Last Updated: 19 March 2010

REFERENCE: 0603-2009

ORDER OF AN ADJUDICATOR

MADE UNDER PART 9 OF CHAPTER 6

BODY CORPORATE AND COMMUNITY MANAGEMENT ACT 1997

Number of Scheme:	31743
Name of Scheme:	Bellcarra Retirement Resort Residents
Address of Scheme:	17 Carree Street CALOUNDRA QLD 4551

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

David Lavis, the co-owner of lot 84

I hereby order that the application for “an order making Motion 2 of extraordinary general meeting of Friday 26th June 2009 invalid.” is dismissed.

STATEMENT OF ADJUDICATOR’S REASONS FOR DECISION - REF 0603-2009

“Bellcarra Retirement Resort Residents” CTS 31743

APPLICATION

This is an application dated 17th July 2009 and amended on 20th July 2009 by David Lavis (the Applicant) co-owner of Lot 84, against the body corporate for Bellcarra Retirement Resort Residents CTS 31743 (the body corporate) for “an order making Motion 2 of extraordinary general meeting of Friday 26th June 2009 invalid.”

JURISDICTION

“Bellcarra Retirement Resort Residents” CTS 31743 is a community titles scheme governed by the Body Corporate and Community Management Act 1997 (the Act) and the Body Corporate and Community Management (Standard Module) Regulation 2008 (Standard Module). There are 124 lots in the scheme created under a Building Format Plan of subdivision.

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 authorisation 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)).

SUBMISSIONS

The Applicant says that on receipt of the agenda for an extraordinary general meeting to be held on 26th June 2009, he noted some clauses in Motion 2 which he thought unreasonable and inequitable. He sought to submit a motion to amend Motion 2 at the meeting in accordance with section 94 Standard Module, and was told by the chairperson and the body corporate manager, after the chairperson read out the motion, that he could not move an amendment to Motion 2. The motion was passed as it stood.

Motion 2 was the only motion on the agenda, and was a general approval for all lots, if lot owners so wished, to mount solar panels in the common property roofs of their respective villas. The approval was given subject to eight conditions. The applicant thought that the fifth condition, that “the lot owner is responsible for ancillary repairs that may arise, such as roof leaking and the like” and the sixth condition that “the lot owner is responsible for removal and replacement of the solar panels when the body corporate requires access for replacement of rooftop sheeting” were unreasonable and inequitable.

In accordance with section 243(2)(b) Act submissions were invited from all owners.

The application attracted several submissions divided fairly evenly on the issue. Several owners said that the Applicant was rudely denied the opportunity to propose an amendment, and that the committee attitude was dictatorial in refusing the Applicant’s proposal. Other submitters say that the move to make an amendment was made after the motion had been called and that the result of the voting should be left alone; that owners could have voted against the motion if they did not like all or some of the conditions of the motion; and that the Applicant had time between receipt of the agenda and the day of the meeting to propose the amendment.

Chairperson Len Dixon (Mr Dixon) says that “Motion 2 had been put and [he] had called for votes when [the Applicant] interjected.” He took advice from the body corporate manager who explained “that an amended motion would fail as residents not present personally or by proxy would be recorded as having voted “No” to an amended motion.” The motion was passed by a majority of 55 – 6 so it was clearly wanted by owners. He is also of the view that if the amendments had been put, it would have changed the subject matter of the motion, contrary to the legislation, given the “extensive future cost burden that would have to be transferred to the Body Corporate as a whole” instead of individual owners.

In addition, applications for a government subsidy for putting in solar panels had to be made by 30th June, giving owners only four days to apply. The body corporate needed to get the motion through for the benefit of owners who wanted to put in roof panels. The body corporate had already canvassed owners on their wishes about whether they wanted to have the opportunity to put in solar panels and there was overwhelming support. Over 50 owners have since the meeting put in an application for the government subsidy, so if the motion was held to be invalid now, it would upset all those applications and owners.

Secretary Randall Roberts (Mr Roberts) says relevantly that “discussion took place at the official table as to the best way to proceed with the meeting and it was decided that in view of the wishes of the majority of Lot owners that was revealed in the survey, that it was not in their best interests to entertain any variation to the motion as distributed to all lot owners.”

The Applicant exercised his right of reply.

He says that the point is that he was not allowed to propose a motion to amend the motion. Everyone at the meeting could then have supported the amendment or not. He denies any “vote had been called.” He says that Motion 2 had been read out to the meeting when he requested leave to make an amendment. The motion to amend the motion should have been voted on first, and not to have allowed this was “an abuse of the intent of the Act and the Regulation.”

He also denies that the body corporate manager explained to him about the reversal of votes on an amended motion. The body corporate manager just told him that; “you can’t amend a motion when you are in a motion.” It was clear that the body corporate did not want to lose the votes which they had.

He says that the 50 plus owners who have applied for the government subsidy before the cut-off date and now await approval will not be disadvantaged, because the government is preparing legislation to prevent bodies corporate from preventing the installation of energy saving solar panels on rooftops, and the owners could propose another motion at a requested extraordinary meeting under section 67.

DETERMINATION

The basis of the Applicant’s complaint is that he was not allowed to put a motion to amend a motion at a general meeting on 26th June 2009. He says that this was an abuse of the intent of the legislation. It seems to me that the dispute concerns principally a question of law.

Section 94 Standard Module states as follows –

Amendment of motions at general meetings

(1) A motion may be amended at a general meeting by the persons present, and having the right to vote, at the meeting.

(2) However, an amendment can not be made that changes the subject matter of the motion.

(3) In counting the votes cast for and against a motion to amend a motion, or an amended motion , a person who is not present at the meeting personally or by proxy, but would, if present, have the right to vote—

(a) if the person has not cast a written or electronic vote on the motion—must not be counted as voting for or against the motion; or

(b) if the person has cast a written or electronic vote on the motion—must be counted as voting against the motion.

The legislation is silent on when the motion to amend the motion should be put. There is dispute about whether the chairperson had called for votes or not. It is agreed that Motion 2 had been read out, and there were only two motions on the agenda, the first being only confirmation of the minutes of an earlier general meeting.

Submitters have suggested that the Applicant might have proposed his amendment earlier, and even between the time when he received the agenda and the day of the meeting. I am of the view that the legislation does not enable any amendments (or additional motions) to be added or made after the agenda is sent out. An agenda for a general meeting, unlike an agenda for a committee meeting, is fixed, so that owners may vote by voting paper on motions of which they have had prior notice. Section 87(5) Standard Module says that a general meeting may pass a resolution on a motion only if the motion is included as an item of business on the agenda and stated in a voting paper.

Joske’s Law and Procedure at Meetings in Australia says that –

“Amendments should be put to the meeting before the motion is put; they cannot be subsequently moved.” [1]

The amended motion is then put to the meeting to vote on.

This does not consider the case where a person entitled to be at a meeting asks to move an amendment and is refused. We do not in fact know what the Applicant’s amendments were to be. It seems that they were not in writing and were not given to the chairperson. If the Applicant’s amendment was a “direct negative” of the motion, or was such that the original motion “lost its identity” the chairperson might have refused to put the motion to amend to the vote since the “competency of the amendment depends upon the general scope and not the particular terms of a motion.”[2]

However, it seems that the reason now given by the chairperson for not hearing the proposed amendment and not putting it to the meeting (the motion to amend the motion) was that he understood that “an amended motion would fail” and that in the light of a government deadline for claiming a subsidy, he did not want to disappoint the majority of lot owners, whose votes he anticipated because of a prior survey undertaken in the scheme. The body corporate knew the outcome which voters wanted and did not want Motion 2 to fail.

Whilst I appreciate the reasoning of the chairperson and the secretary, I am of the view that the chairperson was mistaken in not inviting the Applicant to state his amendment(s) and to propose a motion to amend Motion 2 as it stood.

Lot owners who had cast votes, but were not present at the meeting personally or by proxy would have a vote recorded against the motion to amend; those owners present personally or by proxy (and it appears from the minutes that there were over 52 owners and proxies present in the room) had the choice of voting for or against the amendment. If the motion to amend was successful, the amended motion would then have been put to the vote, with the votes of those not present, who had voted for Motion 2 in its unaltered state, being recorded against the amended motion.

It seems to me from the overwhelming support for Motion 2, that the move to amend it would not have been successful. Be that as it may, the fear of failure was not a reason to prevent the Applicant from having his say at the meeting and seeking to persuade those present that Motion 2 should be amended.

The question then arises, there being a failure in the procedure at a meeting to propose an amendment to a motion, whether the relevant motion becomes invalid.

Joske says that –

“If the chair refuses to put a proper amendment to the meeting, this may invalidate the resolution that is eventually adopted, but only relevant and intelligible amendments should be allowed.[3]

However, there was no “proper amendment” and we do not know if the amendment, if it was proposed, would have been passed. We also do not know if the proposed amendments would have amended the subject matter of the motion.

This is submitted by Mr Dixon. If the amendment would have been to leave out two conditions of the motion, that is, the fifth and sixth conditions set out in the “dot points” of the motion, I am of the view that the “subject matter of the motion” would not have been changed, despite the possible difference in future costs for the body corporate. The subject of the motion was still the body corporate approval en bloc for owners wishing to put in solar panels, as the heading “ Approval for Roof Mounted Solar Panels – All Lots”, suggests.

When an owner applies to the body corporate for approval to make improvements to the common property for the benefit of his or her lot, section 164(3) Standard Module says that authorisation may be given on conditions the body corporate considers appropriate; and that an owner given authority “must comply with the conditions of the authority”, and “must maintain the improvement in good condition unless excused by the body corporate.” (Section 164(4)(a) and section 164(4)(b) Standard Module.)

Motion 2 is unusual in that it is the body corporate giving owners permission before respective owners ask for it, and it is the committee’s motion with conditions set out. If owners had applied to the body corporate individually to mount solar panels on common property roofs, then it seems to me that the eight conditions would have been applied on giving the authorisation since it is the body corporate which has created the conditions and considers them appropriate. An owner who did not feel that the conditions were fair or reasonable would have had only the remedy of making an application to this Office for the conditions to be removed or changed. There would have been no opportunity to make an amendment to the conditions prior to the approval being given.

I am not asked to decide whether the conditions themselves are reasonable and have not here considered the reasonableness of them in their entirety or individually.

I am of the view that the body corporate did not act reasonably and acted in contravention of section 94 Act (that the body corporate must act reasonably in anything it does inter alia to carry out the functions given to the body corporate under the Act), in denying the Applicant the opportunity of proposing an amendment to Motion 2.
However, in the circumstances that the motion was a body corporate global approval for owners to make improvements to common property, and the conditions now objected to by the Applicant could not have been objected to in the ordinary way by an owner seeking such an approval, I am of the view that Motion 2 should not be invalidated. I am also of the view that to invalidate Motion 2 would not be in the best interests of the body corporate. The fact that some owners have subsequently acted pursuant to Motion 2 being carried is also persuasive that to invalidate Motion 2 would cause confusion and uncertainty.

I agree with Mr Roberts that any lot owner might yet propose a motion to a general meeting that the conditions of the bulk approval be amended, or a motion with amended conditions. A “requested general meeting” must be called on the written request of 25% of lot owners. (Section 67 Standard Module). There seems to be some confusion about the notice required in such a situation. Any general meeting requires notice of at least 21 days to be given (section 74 Standard Module). The wording of section 67(3) is that the meeting must be convened, that is the date must be set, in 14 days, and the meeting itself held within 6 weeks.

I therefore dismiss this application, although in doing so, have some sympathy for the Applicant.

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[1] p56 Joske 10th edition 2007 ed. Eilis S Magner
[2] p55 Joske as above
[3] p55 Joske as above