Merrilaine Crescent 40 [2010] QBCCMCmr 33 (25 January 2010)

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

I hereby order that -

(1) Wendy Steadman of Body Corporate (PO Box 144, Palm Beach Qld 4221) is appointed as administrator to call, hold and chair an annual general meeting (‘the meeting’) of the Body Corporate for Merrilaine Crescent 40 within three (3) months of the date of this order.
(2) The administrator shall hold the appointment for the period beginning from the date of this order until of the close of the meeting ordered.

I further order that for the purposes of the Body Corporate and Community Management Act 1997 (‘the Act’), the meeting shall be deemed to be the First Annual General Meeting of the Body Corporate for Merrilaine Crescent 40.

I further order that for the purpose of calling, holding and chairing the meeting, the administrator shall have all the powers of the chairperson, secretary and treasurer of the body corporate, and of the committee, with the exception of the following powers:

- to further delegate any of those powers to another person; or
- to incur any expenditure apart from that necessary for the calling and holding of the meeting, except in regard to expenses that must necessarily be met and are capable of being authorised and incurred by a committee under the legislation.

I further order that, unless otherwise provided for in this order, the meeting shall be called and held in accordance with the Act and the Body Corporate and Community Management (Standard Module) Regulation 1997.

I further order that the administrator’s fees and outgoings for this appointment are to be paid by the Body Corporate for Merrilaine Crescent 40.

I further order that for the purposes of determining the future financial year of the Body Corporate for Merrilaine Crescent 40., the end of the month preceding the month in which the meeting is held shall be deemed to be the end of the financial year.

Merrilaine Crescent 40 community titles scheme 15143 (Merrilaine Crescent 40) consists of two lots and common property. The scheme’s community management statement indicates the Body Corporate and Community Management (Standard Module) Regulation 1997 (Standard Module) applies to the scheme.

This application was made by Raymond and Suzanne Pallesen, the Owners of Lot 2 (applicants) on 17 November 2009 under the Body Corporate and Community Management Act 1997 (Act). The applicant names Kerrie Duffy, the Owner of Lot 1 (and her partner Nathan McDonald) as the respondent. The applicants sought an order in the following terms:

We are seeking to get the Body Corporate for Merrilaine Crescent 40, back to operating legally with the help of an Administrator. As we have no records, apart from Insurance, this will have to be done properly, and we want our neighbour to realise that there are By Laws, and consequences if ignored.

Under section 243 of the Act, a copy of the application was provided to the respondent with an invitation to respond to the matters raised in the application. No submission was received. An unsuccessful attempt was made to telephone the respondent. A dispute resolution recommendation was then made referring the matter to departmental adjudication.

I am satisfied that this is a matter which falls within the legislative dispute resolution provisions.[1]

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 claimed or anticipated contravention of the Act or the community management statement, or the exercise of rights or powers, or the performance of duties, under the Act or the community management statement.

An order may require a person to act, or prohibit a person from acting, in a way stated in the order.[2] An adjudicator's order may contain ancillary and consequential provisions the adjudicator considers necessary or appropriate.[3]

Specifically, and without limiting the power to make an order under section 276(1), an adjudicator may order the body corporate to call a general meeting of its members to deal with stated business or to change the date of an annual general meeting[4] or alternatively, the adjudicator may order the appointment of an administrator, and authorise the administrator to perform obligations of the body corporate, its committee, or a member of its committee under this Act or the CMS or the obligations of the body corporate under another Act.[5]

An administrator appointed by an adjudicator has the powers given to the administrator under the order.[6] Section 301(4) of the Act provides that the order may:

The applicants say they were advised when they purchased there was no body corporate and that there had never been an annual general meeting (AGM) for the scheme. They got on well with the previous owners of Lot 1 and so it appears the lack of meetings and record-keeping was not problematic until the current Owner of Lot 1 purchased and disputes arose. The applicants say the company who held records went into liquidation or disappeared. They seek an administrator to get the scheme operating property, hold an AGM, set up a sinking fund, and obtain insurance.

The Body Corporate for Merrilaine Crescent 40 was established when the scheme was first registered in 1997. However the scheme has not conducted AGMs each year, and has probably never had an AGM. As such the Body Corporate is not operating on a proper legal footing.

Section 77 of the Standard Module provides that the original owner must call and hold the first annual general meeting of a body corporate within two months after the first of the following:

(a) more than 50% of the lots included in the scheme are no longer in the ownership of the original owner;

(b) 6 months elapse after the establishment of the scheme.
The agenda for the meeting must include the items set out in section 77(3) of the Standard Module.

If the original owner does not call and hold the first annual general meeting as required by the section, the order of an adjudicator under the dispute resolution provisions may include an order appointing a person to call the first annual general meeting within a stated time (section 77(4)). The purpose of such an order is to re-establish the body corporate and to facilitate the Body Corporate conducting its affairs in accordance with the legislation.

The applicants appear to have had considerable dispute with Duffy over a range of issues including pets, use and tidiness of Lot 1 and the common property, a fence, conduct of the Lot 1 tenants and exclusive use areas. These issues are beyond the scope of the order sought by the current application, but may be able to be pursued through agenda items at an AGM. Moreover, it appears that the respondent is selling her lot (although no unregistered dealings are currently recorded on the title search) in which case those issues may be resolved by the departure of the current Owner and tenants, or may be able to be addressed amicably with any new owner.

The applicants have nominated Wendy Steadman of Body Corporate Choice Pty Ltd. Ms Steadman has advised this Office that she would charge a fee of $150 plus GST for a three month appointment as administrator. No objection to Ms Steadman has been raised by the respondent.

In the circumstances, I am satisfied that an order should be made appointing an administrator to call and hold a general meeting, to be deemed the first AGM, in order to put the Body Corporate for Merrilaine Crescent 40 on a proper legal basis.

I would encourage the administrator to ascertain if Lot 1 has in fact been sold, and to make all reasonable efforts to notify any new owner of the AGM, whether or not the Body Corporate is formally notified of a new address for service for Lot 1.

[1] See sections 227, 228, 276 and Schedule 5 of the Act
[2] Section 276(2) of the Act
[3] Section 284(1) of the Act
[4] See Item 6 of Schedule 5 to the Act
[5] See Item 23 of Schedule 5 to the Act
[6] See section 301(2) of the Act

Number of Scheme:	15143
Name of Scheme:	Merrilaine Crescent 40
Address of Scheme:	40 Merrilaine Crescent MERRIMAC QLD 4226

Queensland Body Corporate and Community Management Commissioner - Adjudicators Orders

Merrilaine Crescent 40 [2010] QBCCMCmr 33 (25 January 2010)