Peninsula [2010] QBCCMCmr 39 (3 February 2010)

Number of Scheme:	9865
Name of Scheme:	Peninsula
Address of Scheme:	5 Clifford Street SURFERS PARADISE QLD 4217

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

I hereby order that pending a final order, the Body Corporate for Peninsula is not to implement or put into effect Motion 10 or Motion 13, if passed, at the Annual General Meeting scheduled for 6 February 2010.

I further order that this interim order expires when a further interim order is issued, or when the application is finally determined or discontinued, or upon the expiry of 12 months from the date of this order, whichever is the earliest.

Peninsula community titles scheme 9865 (Peninsula) consists of 246 lots and common property. The Community Management Statement (CMS) for Peninsula indicates that the Body Corporate and Community Management (Standard Module) Regulation 2008 (Standard Module) applies to the scheme.

This is an application for interim orders lodged by Alexander Commercial Properties Pty Ltd, Owner of Lot 2 (applicant) on 15 January 2010 under the Body Corporate and Community Management Act 1997 (Act).

The applicant seeks an interim order against the Body Corporate for Peninsula (respondent) in the following terms:

We are seeking orders to prevent the Members voting at the next Annual General Meeting on either Motion 10 and 13.

We believe that the Motions are in regards to the same issue and under section 72 of the Act should have been presented to the members as a motion with alternatives, and to do otherwise is in contravention of the regulations.

We are unsure if the Committee received any advice from Body Corporate Manager, or otherwise, in relation to the framing of the Motions. However, our understanding of the Body Corporate and Community Management (Standard Module) Regulations 2008 is that:

72(5) If more than 1 motion about the same issue is listed on the agenda, or stated in a voting paper, for the meeting, all [sic] motions about the issue are void.

We request that orders be given requiring the Body Corporate to re-submit a lawful motion to the members of the Peninsula Apartments providing one motion with alternatives at either the next Annual General Meeting (or earlier if the Committee chooses).

Further, we have been unsuccessful in obtaining from the files of the Peninsula Apartments any information pertaining to:

We have requested this information, and the Chairman is either unable or unwilling to provide this information (Annexure 5).

We request that prior to the motion being voted on by members of the Peninsula Apartments body corporate that this information be made available.

We note that the building does not have the benefit of a independent quantity surveyors advice regarding the sinking fund; and relies upon an excel spreadsheet prepared by the committee to determine future sinking fund expenses (Annexure 6).

It is unacceptable that critical information relating to the single largest expense in the buildings history ($7,000,000 to $10,000,000) be not readily available to owners, through formal searches of the Body Corporate records or by way of informal requests to the committee.

In accordance with section 247 of the Act, the Commissioner for Body Corporate and Community Management has referred the application to me to decide whether the nature or urgency of the circumstances of the application warrant an interim order. The Commissioner has referred the application notwithstanding that affected persons have not been given notice of the application or afforded an opportunity to make submissions about the application[1]. In the circumstances, I have provided the Body Corporate Committee (committee) with a limited opportunity to make a written submission in response to the interim application.

This application relates to motion 10 and motion 13 to be considered at the Annual General Meeting (AGM) scheduled for 6 February 2010, regarding the amendment of by-law 20. The circumstances of the dispute are as follows:

The AGM for the scheme is scheduled for 6 February 2010. Motion 10 of the AGM (Motion 10), submitted by the committee, is set out below:

Motion 13 of the AGM (Motion 13), submitted by the applicant, is set out below:

That By-Law 20 of the Community Management Statement for Peninsula Community Titles Scheme 9865 be modified to read as follows:

The Body Corporate must maintain, repair and replace as necessary all fixed and movable window frames located on the exterior walls of the building.”

The applicant argues that Motion 10 and Motion 13 should have been presented as a motion with alternatives in the AGM voting paper (instead of two separate motions) because the substance of the motions relates to the same issue. Consequently, the applicant argues that Motion 10 and Motion 13 are in contravention of section 72 of the Standard Module and should not be voted upon at the upcoming AGM.

On 22 January 2010 we received an email from Body Corporate Services stating that it is the “intention of the Chairman to rule the motions Out of Order”. On 25 January 2010 a member of our Office called the applicant and enquired as to whether the applicant wanted to proceed with the application for an interim order.[2] A file note of the conversation indicates that the applicant wants to proceed with the interim order application.

I am satisfied that this is a matter which falls within the legislative dispute resolution provisions.[3] 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:

(b) the exercise of rights or powers, or the performance of duties, under the Act or the CMS; or

(i) the engagement of a person as a body corporate manager or service contractor; or

An order may require a person to act, or prohibit a person from acting, in a way stated in the order.[4] An adjudicator's order may contain ancillary and consequential provisions the adjudicator considers necessary or appropriate.[5] Section 279(1) of the Act allows an adjudicator to make an interim order if satisfied, on reasonable grounds, that an interim order is necessary because of the nature or urgency of the circumstances of the application.

At this time, I am concerned with the application for an interim order and the threshold issue of whether interim orders are warranted. An interim order will not be granted unless is it necessary due to the nature or urgency of the circumstances to which the application relates.[6] Any order granted must be just and equitable in the circumstances.[7] The examples in section 279 of the Act indicate the usual circumstances where an interim order might be made and are in the nature of injunctive relief. While it is not possible to define the range of matters that might be the subject of an interim order, an applicant needs to establish that the circumstances warrant an interim order. An interim order will not be made if the only urgency relates to an applicant’s desire to resolve or expedite the matters in dispute, or where the nature of the circumstances are such that the matter is not capable of being dealt with in the context of 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, an adjudicator 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.

The applicant raises objection to Motion 10 and Motion 13 on the basis that they are two separate motions dealing with the same issue, that is, amendments to by-law 20. The applicant argues that pursuant to section 72 of the Standard Module, Motion 10 and Motion 13 should have been presented in the AGM voting paper as a motion with alternatives and consequently should not be voted upon at the upcoming AGM.

Section 72 of the Standard Module provides for motions with alternatives, and states that if two or more motions proposing alternatives ways of dealing with the same issue are submitted, the voting paper must list the substance of each motion as an alternative under one motion submitted by the Committee. If more than one motion about the same issue is listed on the agenda or voting paper, all motions about the issue are void.

Motion 10 proposes that by-law 20 be removed from the CMS. Motion 13 proposes an amendment to the wording of by-law 20. There appears to be an overlap between these two motions in that they both present alternative approaches to dealing with by-law 20. Accordingly, there is a prima facie argument that these two motions may be invalid because they have been included in the AGM agenda as separate motions rather than a single motion.

In considering whether to grant the interim order sought, it is relevant to 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.

I am satisfied that any inconvenience caused to the body corporate now by postponing the implementation of Motion 10 and Motion 13 pending a final order, is less than the inconvenience of refusing any relief now if final orders are ultimately granted. If Motion 10 and/or Motion 13 were purportedly passed at the AGM and implemented, it may be difficult, and cause additional expense for the body corporate, to ‘undo’ any such actions if the motions were ultimately found to be invalid.

On balance I am satisfied that the applicant has presented sufficient evidence of genuine concerns relating to the validity Motion 10 and Motion 13 scheduled to be voted upon at the AGM dated 6 February 2010. Accordingly I have ordered that pending a final order, the body corporate is not to implement or put into effect Motion 10 or Motion 13, if passed, at the Annual General Meeting scheduled for 6 February 2010.

I note the abovementioned email dated 22 January 2010 stating that it is the intention of the Chairman to rule Motion 10 and Motion 13 out of order. Should the Chairperson rule the motions out of order and this ruling is not subsequently reversed by the persons present at the AGM,[8] the applicant may wish to consider withdrawing the application.

EFFECT OF AN INTERIM ORDER

If this matter continues with our Office, I intend to refer the application to the Commissioner with a recommendation that conciliation be conducted in respect of the dispute. If conciliation is unable to resolve the dispute, the matter will proceed to the investigation of the final order, including calling further submissions.

I have provided that this interim order has effect for a period of not longer than twelve months. It is the responsibility of the applicant to apply to extend this order if no final determination has been made within that period. This Office will not automatically renew an interim order and the order will automatically lapse upon a final order being made or this application being withdrawn.

[1] Section 247(3) of the Act.
[2] See the investigation powers of an adjudicator pursuant to section 271 of the Act.
[3] See sections 227, 228, 276 and Schedule 5 of the Act.
[4] Section 276(2) of the Act.
[5] Section 284(1) of the Act.
[6] Section 279 of the Act.
[7] Section 276 of the Act.
[8] See section 81 of the Standard Module for the power of a person chairing a meeting to rule motions out of order.

Queensland Body Corporate and Community Management Commissioner - Adjudicators Orders

Peninsula [2010] QBCCMCmr 39 (3 February 2010)