Calais [2010] QBCCMCmr 449 (29 September 2010)

Last Updated: 8 October 2010

REFERENCE: 0836-2010

INTERIM ORDER OF AN ADJUDICATOR

MADE UNDER PART 9 OF CHAPTER 6

BODY CORPORATE AND COMMUNITY MANAGEMENT ACT 1997

Number of Scheme:	4596
Name of Scheme:	Calais
Address of Scheme:	17 - 23 Peak Avenue MAIN BEACH QLD 4217

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

John Grima, a co-owner of lot 9

I hereby order that the application for the following Interim an orders: That our Body corporate Manager (Gold Coast Body Corporate Specialists) be advised of this application and that the validity of their appointment is being assessed. In the meantime they are to act in a “caretaker” role on a pro-rata basis pending the outcome of the adjudication. That Mr. Hanson’s appointment as the Treasurer at the AGM is not confirmed pending the outcome of the adjudication process and that the committee appoints an interim “caretaker” treasurer. In the meantime Mr Hanson is not to act as a committee member. is dismissed.

STATEMENT OF ADJUDICATOR’S REASONS FOR DECISION - REF 0836-2010

“Calais” CTS 4596

The scheme

“Calais“ is a community titles scheme under the Body Corporate and Community Management Act 1997 (Act) and the Body Corporate and Community Management (Standard Module) Regulation 2008 (Standard Module). Lot boundaries in this scheme are designated under a building format plan, previously known as a building unit plan and the scheme contains 14 lots.

Application

This application is brought by Mr John Grima, a lot owner and committee member, who seeks the following interim orders:

That our Body corporate Manager (Gold Coast Body Corporate Specialists) be advised of this application and that the validity of their appointment is being assessed. In the meantime they are to act in a “caretaker” role on a pro-rata basis pending the outcome of the adjudication.

That Mr. Hanson’s appointment as the Treasurer at the AGM is not confirmed pending the outcome of the adjudication process and that the committee appoints an interim “caretaker” treasurer. In the meantime Mr Hanson is not to act as a committee member.

Background

The applicant states that he is the Chairman of the body corporate committee and has certain concerns regarding the manner in which the last AGM was conducted on 24 August 2010. At the meeting he asked all attendees to sign the attendance record and everyone indicated that they had done so. He asked the body corporate manager if there were any proxies and she replied that there were none. He also asked the body corporate manager if she had received voting papers from all owners and she replied that she had, but then corrected herself by saying that the owner of lot 10 who resides in Melbourne, had not sent in voting papers.

The body corporate manager subsequently informed the meeting that motions 1 to 9 were carried but motion 10 had been lost. She then purported to declare the meeting closed before the applicant reminded her that the election of committee members had not been addressed.
She declared the results of the election and the applicant noted that Mr. Arnold Hanson had been elected as treasurer.

The applicant challenges the validity of Mr. Hanson’s appointment as treasurer. He states that four people were named on the Notice Papers as nominees for the positions prior to the AGM. At the meeting the applicant suggested that the appointment of Mr. Arnold Hanson may not be valid because he may not have nominated for the position of Treasurer before the end of the financial year i.e. 31 May. However he did not believe that the nomination was received by the due date. The body corporate manager was unable to present evidence of his nomination at the AGM but by email communication dated 31 August, subsequently stated that “In relation to Arnold Hanson’s nomination, we hold a valid nomination form and our acknowledgement on file.”

During the AGM, when the body corporate manager was declaring the outcome of voting on each of the motions, one of the owners, Mr Wallace, arrived late. The applicant states that the body corporate manager did not ask for his voting paper or indicate that he had not voted in advance.
After the results of voting were declared the body corporate manager purported to close the meeting although a number of owners stayed and had some discussion with the body corporate manager. He further states that within half an hour of the closure of the meeting the body corporate manager sent an email to committee members and owners declaring that there had been a change to the declared results of voting on motion 10 as a result of accepting a “yes” vote from Mr Wallace which meant that there were 7 “yes” votes and 6 “no” votes.

Submissions

In accordance with the Act, submissions were sought from the committee regarding the application for interim orders. One submission was received from Messrs Dennis and Williams. A second submission was received from another committee member, Mr Shakespeare and a third submission was received from Mr Hanson.

Submissions from Messrs Dennis and Williams included the following:

• The applicant is a co- owner of lot 9 and the current Chairman.
• He fallen out with several members of the body corporate and the body corporate manager who has acted for this body corporate for almost 20 years;
• Mr Wallace, the owner of lot 8, is of advanced years and in poor health. Nevertheless he has attended every meeting since 2002 and voted from the floor;
• Mr Wallace arrived a few minutes late , sat at the far end of the room and was unaware that the Chairman was discussing the motions with the body corporate manager;
• They were waiting for the Chairman to go through each motion of the AGM so that those attending the meeting could change their vote if they so wished;
• The chairman failed to read through each of the motions at the meeting;
• The Chairman recorded his lot as lot 8 on the voting paper when in fact he is the owner of lot 9 and therefore his vote should be ruled invalid;
• The body corporate manager did not state that votes had been received from all owners and then correct herself but rather, she advised that votes had been received from all lots excluding lot 10;
• When the chairman challenged the nomination of Mr Hanson, the body corporate manager advised that he had nominated before the expiry date;
• They believe that the meeting was conducted too quickly and many of the owners left in haste. Mr Dennis challenged the count on motion 10 as the body corporate manager said that there were 6 votes in favour of motion 10 and 6 votes against. However, she also said that 13 out of 14 lots voted which raised the question of what happened to the 13th vote;
• The nomination from Mr Hanson was received in order on time and is on file in the office of GCPBCS;
  

Submissions from Mr Hanson included the following:

• He did nominate within the specified timeframe;
• He was unable to attend the AGM but submitted an apology;
• He has resided in the scheme since 1996 and believes they have received excellent service from GCBCS;
• The applicant incorrectly recorded his lot as lot 8 on the voting paper when in fact he is the owner of lot 9;
• He believes that the chairman should have read out each of the motions and questioned why only 12 and not 13 voting papers had been received;
• A denial of the vote by Mr Wallace would result in a denial of the wishes of the majority of owners.
  

Submissions from Mr Shakespeare included the following:

• At the AGM the body corporate manager could not find a copy of Mr Hanson’s nomination;
• It is highly unusual for a vote to be accepted and a recount conducted after the meeting had closed and many attendees had left the venue;
• 6 of the 11 attendees at the meeting have complained to the body corporate manager that the minutes are not a true and accurate record;
• There is a certain amount of hostility between certain committee members;
  

Decision

In accordance with section 247 of the Act, the Commissioner for Body Corporate and Community Management has referred the application to me. Section 276(1) of the Act provides that an adjudicator may make an order to resolve a dispute about a claimed or anticipated contravention of the Act; or the exercise of rights or powers, or the performance of duties, under the Act. An order
may require a person to act, or prohibit a person from acting, in a way stated in the order (s 276(2), Act). An adjudicator's order may contain ancillary and consequential provisions the adjudicator considers necessary or appropriate (s 284(1), Act).

The making of interim orders is further governed by sub-sections 279(1) & (2) of the Act which provide as follows: -
(1) The adjudicator may make an interim order if satisfied, on reasonable grounds, that an interim order is necessary because of the nature or urgency of the circumstances to which the application relates.
Examples
1. The adjudicator may stop the body corporate from carrying out work on common property until a dispute about the irregularity of proceedings has been investigated and resolved.
2. The adjudicator may stop a general meeting deciding or acting on a particular issue until it has been investigated and resolved.
(2) An interim order
(a) has effect for a period (not longer than 1 year) stated in the order; and
(b) may be extended, varied, renewed or cancelled by the adjudicator until a final order is made; (c) may be cancelled by a later order made by the adjudicator; and
(d) if it does not lapse or is not cancelled earlier, lapses when
(i) the application is withdrawn; or
(ii) the commissioner gives the person who made the application a written notice under section 241 rejecting the application; or
(iii) a final order is made by an adjudicator to whom the application is referred. ...

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[1] and any order granted must be just and equitable in the circumstances.[2] In determining whether it is just and equitable to grant interim relief it is relevant to briefly consider whether the application raises any serious questions for final determination. It is also relevant to consider whether any inconvenience likely to result from the interim order is outweighed by the potential detriment alleged in the application. Any evidence that an interim order is necessary to prevent serious or irreparable harm will be significant.

The first interim order sought by the applicant is :

That our Body corporate Manager (Gold Coast Body Corporate Specialists) be advised of this application and that the validity of their appointment is being assessed. In the meantime they are to act in a “caretaker” role on a pro-rata basis pending the outcome of the adjudication.

At first glance it seems highly irregular that after the results of voting on lot 10 were declared and the meeting closed, the body corporate manager sent an email to committee members and owners declaring that there had been a change to the declared results of voting on motion 10 as a result of accepting a “yes” vote from Mr Wallace.

This outcome is partially explained in an email from the body corporate manager dated 25 August 2010 which states “The voting count was challenged in regards to motion 10- Body Corporate Administration. Richard Wallace advised he was in attendance at the meeting however did not put in his voting paper as he intended to vote from the floor, but was confused with the process. A recount was carried out and it was noted that John Grima incorrectly noted his lot number – which was the lot number for Richard Wallace plus he was counted as present for his correct lot number. The correct votes are as follows: 7 YES 6 NO: therefore motion 10 is carried. Gold Coast Body Corporate Specialists will continue to be your body corporate managers for next year”.

Although I do not propose to make a decision on this matter at this point in time, I do have concerns regarding the validity of the resolution on motion 10. I therefore propose to seek further submissions and documentary material from the parties. However, I believe it would be premature of me to make the requested order, i.e. Gold Coast Body Corporate Specialists are to act as body corporate manager on a month to month basis. To do so would cause considerable disruption to the operations of the body corporate and I am not satisfied that it would be appropriate to order that the manager be remunerated on a pro-rata basis as suggested by the applicant.

The second interim order sought by the applicant is That Mr. Hanson’s appointment as the Treasurer at the AGM is not confirmed pending the outcome of the adjudication process and that the committee appoints an interim “caretaker” treasurer. In the meantime Mr Hanson is not to act as a committee member. This is because the applicant has a suspicion that Mr Hanson was not nominated for committee membership in accordance with the legislation. In this regard it should be noted that section 16 of the Body Corporate and Community Management (Standard Module) Regulation 2008 provides as follows:

16 Nomination procedures for election of committee other than at first annual general meeting
(1) This section states how individuals are nominated for election at the annual general meeting for the community titles scheme (other than the first annual general meeting) as a voting member of the committee.
(2) The secretary must serve a notice on each owner of a lot shown on the body corporate's roll--
(a) setting out an owner's right of nomination under section 17 and inviting nomination; and
(b) stating that the owner, or a person nominated by the owner, is not eligible to be a voting member of the committee if the owner owes a body corporate debt in relation to a lot or lots owned by the owner at the time the members of the committee are chosen.
(3) The notice must be given at least 3 weeks before, but not earlier than 6 weeks before, the end of the body corporate's financial year.
(4) Nominations must comply with section 18 and must be given to the secretary by the end of the body corporate's financial year.
(5) As soon as practicable after receiving a nomination under this section, the secretary must forward written notice to the candidate acknowledging the nomination has been received.

At this point in time the applicant merely holds a suspicion that Mr Hanson’s nomination was not received before the end of the last financial year and this suspicion is refuted by both Mr Hanson and the body corporate manager. Mr Hanson states that his nomination was given to the Secretary before the end of the financial year. I also note from correspondence between the parties that the body corporate manager is adamant that although she could not locate a copy of the nomination at the AGM, a nomination was received from Mr Hanson on time and is on file in the office of Gold Coast Body Corporate Specialists.

Consequently, I do not believe that the circumstances justify the making of an urgent order for the removal of Mr Hanson from the committee or to prevent him from acting as a committee member.
As the applicant is aware, Mr Hanson is only one of six committee members and there are limits to decisions which can be made by the committee including the level of expenditure that may be incurred by the committee. Obviously, in the course of considering the final outcomes sought by the applicant, further submissions and documentary material will be sought and full consideration will be given to the validity of Mr Hanson’s nomination. If it does transpire that Mr. Hanson’s nomination was in fact invalid, or the appointment of the body corporate manager was invalid, appropriate action can be taken at that time. Given the circumstances of this case I will endeavour to expedite the making of final orders.

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[1] Section 279 of the Act
[2] Section 276 of the Act