Riverleigh Gardens [2010] QBCCMCmr 3 (5 January 2010)

I hereby declare that the purported appointment by the committee of Riverleigh Gardens GTP 104105 of Jason Gerard as nominee to the Hope Island Principal Body Corporate at a committee meeting held on 18th June 2009 was invalid.

I further order that an application for an order that -
“in respect of the appointment of a person to represent the Riverleigh Gardens Body Corporate and to vote for the Body Corporate at general meetings of the Hope Island Resort Principal Body Corporate, in the circumstance where the previous appointee is removed by means of a resolution of a general meeting of the Riverleigh Gardens Body Corporate, that appointment must be decided by the Riverleigh Gardens Body Corporate in general meeting” is dismissed.

This is an application dated 29th July 2009 and amended on 30th July 2009 by Vincent Vine and Oonah Vine, (the Applicants) co-owners of Lot 11, against the body corporate for Riverleigh Gardens GTP 104105 (the subsidiary body corporate) for orders as follows –

“1. Jason Gerard’s purported ‘appointment’ by the Riverleigh Gardens Body Corporate committee on 18 June 2009 to represent and to vote on behalf of the Riverleigh Gardens Body Corporate at meetings of the Hope Island Resort Principal Body Corporate be declared invalid; and

The Applicants also sought an interim order that Mr Jason Gerard be prevented from representing and voting on behalf of the Riverleigh Gardens Body Corporate at the AGM of the Hope Island Resort Principal Body Corporate on 3rd August 2009. I made an order in this matter on 31st July 2009, dismissing the interim application.

“Riverleigh Gardens” Group Titles Plan 104105 is a plan for the Integrated Resort Development Act 1987 (IRDA). The scheme is a subsidiary scheme in Hope Island Resort Principal Body Corporate. There are 94 Lots in the scheme

The Building Units and Group Titles Act 1980 (BUGTA) applies for the operation of IRDA (section 5A, BUGT Act) and continues to apply to a group titles plan subject to IRDA (section 328, Body Corporate and Community Management Act 1997). Section 179A IRDA provides as follows –

“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, division 3 BUGTA makes provision for orders by a referee. Within division 3, section 77(1) provides a general power for a referee, on application of a body corporate, a body corporate manager, a proprietor, a person having an estate or interest in a lot or an occupier to “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”.

Given section 179A of IRDA, the Applicants as the proprietors of a lot in Riverleigh Gardens may make an application against the subsidiary body corporate seeking an order under section 77(1) of the BUGTA.

The Applicants say that the appointment of Jason Gerard (Mr Gerard) as the subsidiary body corporate delegate to the Principal Body Corporate of Hope Island Resort (the PBC) at a committee meeting of the subsidiary body corporate on 18th June 2009 in lieu of at a general meeting of the body corporate, was unlawful.

The Applicants say that in practice the subsidiary body corporate has appointed a delegate to represent it and to vote at meetings of the PBC, at each of its annual general meetings. The Applicant Vincent Vine (Mr Vine) was appointed as the delegate at the annual general meeting held on 16th September 2008. On 28th May 2009, at a requested extraordinary general meeting (the EGM) of the subsidiary body corporate, a motion to cancel Mr Vine’s position as the delegate to the PBC and to notify the PBC was passed at Motion 5.

Motion 6 of the EGM was that Mr Gerard be endorsed as the nominee of the subsidiary body corporate, pursuant to IRDA, and also fill a vacant position as a subsidiary body corporate committee member, pursuant to BUGTA. This motion was ruled out of order by Mr Vine, who was chairing the meeting, although the position of chairman had been declared vacant by Motion 2 of the EGM, and the position filled by Duncan De Berry (Mr de Berry) in the same motion.

As chairperson, Mr Vine ruled Motion 6 out of order because it sought to combine two processes from two distinct pieces of legislation in one motion. He said that one motion could not deal with the two appointments, and the Applicants say the EGM motion(s) were wrongly drafted.

On 18th June 2009, the new committee, largely composed of numbers who had requested the EGM, voted to appoint Mr Gerard as the delegate to the PBC, although the body corporate manager advised that it was her view that this could only be achieved at a general meeting. The committee said that it had sought legal advice on the matter.

The Applicants say that section 140 IRDA means that the nominee to the PBC must be appointed by the body corporate at a general meeting, and that the committee’s action was ultra vires.

At the interim order stage, the body corporate felt unable to make submissions in the very brief time available. Mr De Berry, committee member, provided a brief submission stating as follows –

A late submission at the interim order stage by the PBC was of the view that the appointed nominee required the approval by a member of the PBC, that is the residential body corporate, at a general meeting.

Submissions were invited from all lot owners in accordance with section 73(1)(d) BUGTA.

Mr Gerard, owner of Lot 3174 and a committee member, says that after the interim order, the subsidiary body corporate has now held its annual general meeting on 18th August 2009, (2009 AGM) at which by Item 20 he was approved as the Riverleigh Gardens nominee to the PBC, and that notification of that is to be forwarded to the PBC. He says that he has now been properly authorised by the body corporate at a general meeting and the Applicants’ objection has thus been addressed.

In respect of the ruling sought that a replacement representative should only be appointed at a general meeting, he advises that item 3 of the committee meeting on 18th June 2009 says that the committee noted that as a result of the EGM, the body corporate currently did not have a member’s nominee to the PBC. The committee explored its options since Motion 6 at the EGM, to appoint the nominee, had been ruled out of order, and the committee interpreted the legislation in good faith the words “ and from time to time thereafter” was construed “to not necessarily mean at a General Meeting.”

The committee had sought a verbal legal opinion. The decision was taken with reasonable care to fill an urgent vacancy, without contempt for the legislation, and based on a reasonable interpretation of the “rather ambiguous IRDA provisions” and following input from a lawyer experienced in body corporate matters. It was also known that the matter could be revisited in two months’ time at the annual general meeting which is what occurred.

Scott Williams (Mr Williams), owner of Lot 3164, says that Mr Vine was removed as the member’s nominee by a vote at a general meeting. At that time Mr Vine was also chairman “assuming the position after all other committee members resigned.” At the EGM the second motion was to vacate the position of chairman held by Mr Vine and to elect Duncan de Berry to that position, which was carried. Mr Vine then refused to step down as chairman, saying he was allowed to remain until the meeting closed.

He is now of the view that Mr Vine should have stepped down. Mr Vine ruled out of order the motion which sought to appoint Jason Gerard both as nominee to the PBC and as a committee member, whilst he was illegally holding the chairman’s position. He believes the ruling out of order was a fabrication on the part of Mr Vine to disrupt the democratic process. The voting tally shows that Mr Gerard would have been appointed in both positions if this motion was not ruled out of order.

He also says that the committee interpreted section 140(b) IRDA to mean that a nominee may be appointed from time to time.

The body corporate on 25th August 2009 through its secretary Annelise St Ange says that the committee endorses the submission of Mr Gerard.

A late submission was received from committee member Josseline Boehnert who said that she has not endorsed Mr Gerard’s submission, and that she was excluded from the committee meeting which purportedly approved the body corporate submission, which approval was sought by way of a vote outside a committee meeting. She does not provide a separate submission on the dispute.

Whilst there is no provision in BUGTA for an applicant to make a reply to submissions, I am of the view that natural justice is better served if the Applicant is given the final word to clarify or comment on any issues raised in submissions.

The Applicants say that there was no written legal opinion available to support the committee’s allegation that it has the power to appoint a delegate to the PBC, although the committee has referred to a legal opinion being obtained. If there was a legal opinion, the Applicants doubt that the brief included advice that the previous nominee had been removed from the position at a general meeting which is a specific circumstance.

They say that this application is not about whether the chair should have been vacated by the outgoing chairman. The inference in Mr Gerard’s submission is that Motion 6 would have been passed in any event, but Motion 6 should have been ruled out of order by whoever was chairing the meeting. The motion sought to make two separate appointments deriving from different pieces of legislation, and voters were not given the opportunity to vote for one without the other. The motion was therefore “restrictive” and “unconstitutional” and for this reason he ruled it out of order.

In respect of chairing a meeting after a vote to vacate the chairman’s position has been passed, BUGTA Schedule 2 Part 2 section 7 says that the chairperson is to preside, which the Applicants say means that the “incumbent” chairperson is to preside. When read in conjunction with section 43(2) BUGTA about the new chairman holding office “for the balance of the predecessor’s term”, the Applicants submit that the proper interpretation is that chairman should chair until the meeting is over. The chairperson could always fix such a motion to be at end of the agenda in fact. They say that if Mr Vine stepped down as chair after Motion 2, the rest of the meeting “was void.”

The Applicants refute that any such legal advice about the chairman stepping down was received, as submitted by Mr Williams. The Applicants point out that Mr Vine is still a member of the PBC committee, and he never sought to be chairperson of Riverleigh but it was forced upon him by reason of being the last committee member when all others had resigned.

The Applicants seek two outcomes, firstly a declaration that the committee’s “appointment” on 18th June 2009 of Jason Gerard as Riverleigh Gardens’ representative to the PBC was invalid; and secondly, a declaration that a replacement representative to the PBC following a “cancellation” by a general meeting may only be chosen at a general meeting of the subsidiary body corporate.

I note that there is now no dispute remaining, in that on 18th August 2009, the body corporate convened an annual general meeting at which a motion for the nominee for the PBC was decided, and a nominee appointed. In respect of a declaration about a past event which has been the subject of a dispute, I am satisfied that I have jurisdiction. However, I am of the view there is no general power in an adjudicator to make declarations about the conduct of future events, and I therefore dismiss this part of the application. Nevertheless, in an endeavour to forestall future disputes, I hope the following remarks will be helpful to the Applicants and to the body corporate.

Appointment of Mr Gerard as nominee on 18th June 1009
At the time when this application was lodged on 29th July 2009, section 140 IRDA , which regulates the appointment of a person by the “subsidiary” body corporate to represent it and to vote on behalf of it at meetings of a principal body corporate, provided as follows-
“140 Member’s nominee

(a) being a body corporate created by the registration of a building units plan or a group titles plan—shall at its annual general meeting and may from time to time thereafter (my underlining); or

appoint a person to represent the member and to vote on behalf of the member at meetings of the principal body corporate.

(2) The appointment of a person pursuant to subsection (1) shall not be effective until notification in writing signed by the member or, in a case referred to in subsection (1)(a), by the chairperson and secretary of the body corporate is received by the secretary of the principal body corporate.

(3) The appointment of a person to represent a member of the principal body corporate at meetings of the principal body corporate shall continue until—

(b) notice of the cancellation of the person’s appointment;
is received by the secretary of the principal body corporate.”

Section 140 IRDA was amended by the Resorts and Other Acts Amendment Act 2009, the amendments coming into force on 1st December 2009. The section now reads -

(1) This section applies to a member of a principal body corporate for appointing a person (a nominee) to represent and vote on behalf of the member at meetings of the principal body corporate.
(2) A subsidiary body corporate of the principal body corporate—

(3) A member of the principal body corporate, other than a subsidiary body corporate, may appoint a nominee from time to time.

(4) Subject to section 140A, a nominee appointed by a subsidiary body corporate must be a member of the subsidiary body corporate.

(5) The appointment of a nominee has no effect until written notice of the appointment is received by the secretary of the principal body corporate.

(6) A nominee appointed by a subsidiary body corporate must represent the subsidiary body corporate—

(b) subject to subparagraph (a), in a way that is in the best interests of the subsidiary body corporate.

(7) The appointment of a nominee for a member ends when the first of the following happens—

(b) the secretary of the principal body corporate receives written notice of—

(ii) the appointment of another nominee for the member.
(8) A written notice under subsection (5) or (7)(b) must be signed—

(a) for an appointment or cancellation made by a subsidiary body corporate—by the chairperson and secretary of the subsidiary body corporate; or

A nominee must be appointed at an annual general meeting “and from time to time thereafter” (prior to the amendment) and now “from time to time.” The body corporate notes that the provisions of IRDA are “rather ambiguous” in this regard. The ordinary meaning of the words are “and at intervals after that event”. It seems to me that the provision allows the body corporate to appoint another nominee if for some reason the position becomes vacant within the year and prior to the annual general meeting.

As I stated in the interim order, and following Rosebank[1], in my view, a committee is not authorised to appoint a member’s nominee. There is some support to be gained for this view in the new section 140A which prevents the original owner from being a nominee after having sold 50% of lots in the scheme. If the original owner, or an ineligible associate, is already the nominee for a subsidiary body corporate, a general meeting must be held within two months (presumably of the sale of 50%) and “the owner’s or associate’s appointment as the nominee ends at the next general meeting of the subsidiary body corporate.” (Section 140A(3) IRDA 1987 as amended).

The explanatory notes to the Resorts and Other Acts Amendment Act 2009 do not address the meaning of the words “from time to time.” They say –

“Clause 31 replaces section 140 (Member’s nominee) with a new section 140 which governs who can represent a subsidiary body corporate (a member of the principal body corporate) to the principal body corporate, and requires that the nominee must be appointed at the annual general meeting, that the nominee must be a member of the subsidiary body corporate and that the nominee must represent the subsidiary body corporate as directed by, and in the best interests of that subsidiary body corporate. It also articulates that a member of the principal body corporate, other than a subsidiary body corporate, may appoint a nominee from time to time.”

Section 46 BUGTA looks at restricted issues for the committee. A “restricted issue” includes any matter which seeks to alter the rights, privileges or obligations of proprietors[2], and any matter “ a decision on which may, in accordance with any provision of this Act, only be made by the body corporate pursuant to a.....general meeting of the body corporate.”[3] The reference to an annual general meeting in section 140 IRDA aligns the appointment of the nominee with the election of committee members, that is, the appointment of representatives who must be chosen once a year.

When a casual vacancy occurs on the committee of either the PBC or the subsidiary body corporate, the remaining committee members may, by virtue of section 159 IRDA, or section 43 BUGTA respectively, appoint a person eligible to be elected to the committee to hold the office for the remainder of the term.

However, there is no such provision about the nominee to the PBC. The nominee is the sole representative of the lot owners, and as I am of the view that he or she must be chosen by the lot owners. Unlike a committee which by its nature discusses the administration of the body corporate and makes decisions by majority vote, the nominee is the spokesperson for the body corporate on the PBC, and, as clarified in the amended section 140 IRDA must represent the subsidiary body corporate in the way the subsidiary body corporate directs.

I also have the view that there is about the matter of a committee which represents the body corporate itself appointing a representative or nominee to a principal body corporate, a sense of the legal maxim ‘delegatus not potest delegare, that is, that a delegate cannot himself appoint a delegate, a maxim from which one should not veer unless there is clear indication that the delegate is empowered particularly by legislation to act in that way.

In addition, the BUGTA requirement for notice of a subsidiary body corporate general meeting is only 7 days, so that there is unlikely to be any injustice caused by the body corporate being without a nominee to the PBC for any length of time.

I am therefore of the view that the committee had no power to appoint a nominee to the PBC on 18th June 2009, and that the appointment of Mr Gerard by the committee was ultra vires. It was therefore invalid as a decision of the body corporate, and the effect was that Mr Gerard was not so appointed as a nominee at that time.

If the body corporate was again to find itself in the situation where there was no nominee and a meeting of the PBC was imminent, I suggest that an application is made to this Office for a temporary appointment to be authorised as an emergency measure.

I trust that the abovemade remarks will give guidance to the body corporate in the interpretation of IRDA. It may be that the recent amendments will also assist as different circumstances arise.

The Applicant notes that I am not asked to rule on the matter of whether or not a chairperson who is removed from office during a meeting should continue with a meeting; nor on whether a motion which purports to decide two items under two separate pieces of legislation is valid.

Section 43(1)(j) BUGTA says that a person “elected as chairperson” vacates the position if the body corporate in general meeting pursuant to a resolution determines that the person’s office is vacated. Upon a vacancy occurring, a person appointed by the body corporate holds office for the balance of the person’s predecessor’s term of office; (section 43(2) BUGTA).

The Applicant Mr Vine, points out that he was not “elected as chairperson”, but became chairperson by dint of being the last remaining serving committee member.

I do not appreciate this distinction. It seems to me that the intention and sense of the legislation is that a person remains in office until another person is chosen. Where a motion is put that the chairperson is removed from office, and a new chairperson is appointed at the same meeting, then the new person takes over the office from the predecessor at that moment of choosing. In my view the new chairperson should be invited to chair the remainder of the meeting, the former chairperson having at that time been removed from the office of chairperson. A chairperson, if present at a general meeting, must preside. (Schedule 2, Part 2, Item 7 BUGTA).

It is true that there is no requirement that a motion for removal or appointment from/to office be put at the beginning or end of a meeting, but it is up to the committee to set the agenda in the usual democratic way. It might thus be a fact that a person newly appointed to office does not take up the position until the end of the general meeting at which he or she is appointed, but I can find no rule of law to this effect.

A chairperson may rule a motion out of order if he or she considers that if carried, it would conflict with the Act or the by-laws or would otherwise be unlawful or unenforceable. (Schedule 2 Part 2 item 4 BUGTA). The minutes say that the Applicant Mr Vine, as chairman, ruled the motion out of order because “it is out of order to have the one motion deal with two appointments”. There was a call from the floor that the meeting be adjourned, and Mr Vine said that an adjournment was at his discretion, and was refused.

“Joske’s Law and Procedure at Meetings in Australia”[4] notes that apart from cases of disorder, “the right to decide whether the meeting should be stopped, either for a short time or a longer period, belongs to the meeting itself,” and should be decided by the majority of those present. A motion suggesting an immediate recess can be made at any time.

There is nothing in BUGTA or IRDA that precludes a motion from dealing with two items at the same time, from whichever source of legislation they derive. It may be unwise, in that persons who wish to vote “Yes” to the first part (or one position for Mr Gerard), but “No” to the second part (or the other position for Mr Gerard) might be disinclined to vote, but there is nothing inherently unlawful or invalid about setting out a motion in that way. The whole framework of BUGTA in its promotion of self-government by the body corporate, means that often motions will be poorly worded. Where poor drafting results in incomprehension or tends to mislead voters, it is up to voters themselves either to seek clarification prior to casting their votes, to vote against the motion if not satisfied, or to make an application to this Office if the motion is passed, relying on the fact that the motion was so ambiguous or unreasonable that it should not be allowed to stand.

It does not seem to me that Motion 2 was unlawful or unenforceable or contrary to BUGTA which are the only reasons upon which a chairperson might rule a motion out of order. The Applicants have not convinced me that the motion was “restrictive” or “unconstitutional” in the sense of being contrary to natural justice or constitutional law.

On 8th August 2009, following the interim order made on 31st July 2009, the Applicants pointed out that Mr Vine was not elected to the position of chairperson, of which mention had been made in the interim order. I have noted this fact in this determination.
The Applicants also wished me to comment, in order to avoid future confusion, on the point that I had mentioned “prima facie irregularities” in that the chairperson continued chairing the meeting after being removed from office, and “ruling motions out of order.” The Applicants point out that only one motion was ruled out of order by Mr Vine at that meeting which is correct. Both these matters are covered in the reasons for this decision given above.

The Applicants also sought clarification as to whether “a late application for an interim order is, per se, a significant ground on which to dismiss such an application.” Circumstances will differ in each case, but since the purpose of an interim order is generally to maintain the status quo where an event which will render relief for the applicant difficult or impossible is imminent, the applicant must act with all speed in the presentation of his/her case. Knowledge of those circumstances, and the understanding of the applicant are both relevant considerations to put into the balance when what is being sought is effectively an injunction against a legal person from acting as it wishes prior to any proper consideration of the issues in dispute. The tenor of the legislation makes it quite clear that there is no need for legal representation or legal drafting in making the application.

[2] Section 46(1)(b) BUGTA
[3] Section 46(1)(d) BUGTA
[4] 10th edition by Eilis S Magner [11.15]

Number of Building or Parcel:	GTP 104105
Address of Parcel:	RIVERLEIGH GARDENS, HOPE ISLAND QLD 4212

Queensland Body Corporate and Community Management Commissioner - Adjudicators Orders

Riverleigh Gardens [2010] QBCCMCmr 3 (5 January 2010)