Tower Mill Motor Inn [2010] QBCCMCmr 7 (6 January 2010)

Number of Scheme:	1918
Name of Scheme:	Tower Mill Motor Inn
Address of Scheme:	239 Wickham Terrace SPRING HILL QLD 4000

TAKE NOTICE that pursuant to an application made under the abovementioned Act by Skafola Pty Ltd, the owner of Lot 13

I hereby order that the application for an order by Skafola Pty Ltd, the owner of Lots 13, 31 and 97 against Burnitt Investments Pty Ltd, the owner of Lots 4, 7, 8, 9, 17, 18, 22, 23, 24, 25, 28, 29, 30, 71, 96 and 103 and Transmetro Corporation Limited, the owner of Lots 6, 33, 36, 57, 62, 70, 73, 77, 78, 79, 95 and 102 seeking an outcome that voting outcomes at the Annual General Meeting held on 16 April 2009 (except for the election of the committee) and the Extraordinary General Meeting held on 16 April 2009 be overturned, is dismissed.

The scheme
“Tower Mill Motor Inn” community titles scheme 1918 is subject to the Body Corporate and Community Management Act 1997 (Act) and the Body Corporate and Community Management (Accommodation Module) Regulation 2008 (Accommodation Module).

Application
This application made on 25 June 2009 is by Skafola Pty Ltd, the owner of Lots 13, 31 and 97 (Applicant) against Burnitt Investments Pty Ltd (Burnitt), the owner of Lots 4, 7, 8, 9, 17, 18, 22, 23, 24, 25, 28, 29, 30, 71, 96 and 103 and Transmetro Corporation Limited (Transmetro), the owner of Lots 6, 33, 36, 57, 62, 70, 73, 77, 78, 79, 95 and 102. The Applicant seeks an outcome that voting outcomes at the Annual General Meeting held on 16 April 2009 (except for the election of the committee) (AGM) and the Extraordinary General Meeting held on 16 April 2009 (EGM) be overturned for the reason that the voting bloc of Burnitt and Transmetro acted in circumstances that constituted conflicts of interest.

The Applicant provided background material with respect to Burnitt and Transmetro saying both voted for motions at the meetings that involved serious conflicts of interest and they sought to vote their majority to achieve their ends and goals. The Applicant states while there is nothing in the Act preventing a member from protecting its interests, a situation has developed where Burnitt and Transmetro have conspired to obtain financial benefits for themselves while denying any benefits to other owners. The Applicant submits Motion 20 was moved by Burnitt to gain Brisbane City Council approval for the illegal work carried out on scheme land and the Motion was passed with their combined vote. The Applicant explains its view about conflict of interest.

Submissions to the Commissioner
On 23 July 2009, the Commissioner provided a copy of the application to the Body Corporate for distribution to the owner of each lot (excluding the Applicant) and the committee, with an invitation to respond to the matters raised in the application (s 243, Act).

Submissions were made by 5 lot owners; 4 expressed concern about the actions of Burnitt and/or Transmetro. The owner of Lots 35, 42 and 61 states Motions 8, 18, 19 and 20 are specifically designed to protect the position of, and benefit, Burnitt and Transmetro. The owner submits the order made in Teneriffe Hill Apartments [2005] QBCCMCmr 71 precluded an owner from voting on a motion dealing with the subject of how the body corporate should respond to an application brought by that owner. The owner says the effect of Body Corporate consent under Motion 20 would be to indicate to the Council that Burnitt has a valid use of parts of common property it unlawfully occupies. The owner argues that due to the terms of leases, Transmetro has to maintain common property and Motions 10 to 17 are about expenditure of money to maintain common property.

Maunsell Pennington Solicitors made submissions on behalf of Transmetro, MHG Brisbane Pty Limited (owner of 8 lots) and Metro Motor Inns Hotels and Motels Pty Ltd (owner of 3 lots) opposing the order sought on the grounds that each motion passed is proper and reasonable. The owners deny there is a conflict of interest. They explain the basis for voting on each of the motions in the agenda of the AGM stating it is demonstrated that the motions passed were either of a budgetary nature, related to maintaining the building, or related to reimbursing Transmetro.

Simmonds Crowley & Galvin Solicitors made submissions on behalf of Burnitt stating the effect of the orders sought is to fetter the exercise of voting rights of an owner in general meeting. It is submitted there is no dispute nor can there ever be a dispute between an owner exercising a vote on a motion in general meeting and another owner as an owner has not right to interfere with how another owner seeks to or does vote.
Burnitt says there is no provision of the Act permitting an order of the nature sought to be made against a lot owner and that the only conflict provisions which do exist relate to the exercise of votes in committee. It is submitted that there is no jurisdiction to make any order about the exercise of voting rights by Burnitt on the application of another lot owner.

Adjudication
A dispute resolution recommendation has been made under section 248 of the Act referring the dispute to departmental adjudication. 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 (s 276(1), Act).

Decision
The Applicant seeks an outcome that decisions made at the AGM and the EGM be overturned. Both are meetings of the Body Corporate (s 104(1), Act and s 62, Accommodation Module). A resolution on a motion stated in the agenda of a general meeting is a decision of the body corporate. Where a lot owner makes a dispute resolution application under chapter 6 of the Act questioning a resolution of the body corporate, the appropriate respondent to the application is that body corporate. A chapter 6 dispute includes a dispute between an owner and the body corporate (s 227(1)(b), Act).

Rather than pursue the Body Corporate with respect to the decisions made on motions in the agenda of the AGM and the EGM, the Applicant has made this application against two other lot owners. The Applicant argues these persons should not have voted at these meetings. The Applicant provided a copy of the minutes of both meetings. It is apparent the representative of the Applicant chaired both meetings and that votes were cast for the lots owned by the respondents. There is no reference in the minutes of any rulings by the person chairing the meeting about voting, including about the capacity of a person to vote on a motion in the agenda. It is clear the Body Corporate made decisions on the motions in the agendas of the AGM and the EGM. I consider the Applicant can not make a dispute resolution application seeking an outcome to overturn a Body Corporate decision at these meetings and name individual lot owners as respondents. In the circumstances, the Applicant could only have named the Body Corporate as the respondent.

Even if the Applicant identified the Body Corporate as the respondent, a conflict of interest is no basis to make an order in the terms sought. I agree with the submissions made by Burnitt on this point. The legislation does not prevent a vote on a motion at a general meeting for the reason the person voting has an interest in the motion. I do not believe the decision in Teneriffe Hill Apartments is applicable in the circumstances.

The Applicant suggests decisions made at the meetings are to the detriment of owners. The general functions of a body corporate include administering common property and body corporate assets for the benefit of lot owners, enforcing the community management statement and carrying out other functions given to the body corporate under the Act or the community management statement (s 94(1), Act). The body corporate must act reasonably in anything it does under section 94(1), including making or not making a decision for the subsection (s 94(2), Act). A lot owner may dispute a body corporate decision on the question of reasonableness. However, in the circumstances of this application where the Applicant has named lot owners as respondents and primarily relied on a claim of conflict of interest, I do not believe there is any scope for any consideration or investigation of this point with respect to any resolution of the Body Corporate at either the AGM or the EGM.

Queensland Body Corporate and Community Management Commissioner - Adjudicators Orders

Tower Mill Motor Inn [2010] QBCCMCmr 7 (6 January 2010)