The Beechwoods [2011] QBCCMCmr 429 (30 September 2011)

Last Updated: 17 October 2011

ADJUDICATOR’S ORDER
Office of the Commissioner
for Body Corporate and Community Management

CITATION:	The Beechwoods [2011] QBCCMCmr 429
PARTIES:	Suzanne Oldham and Don Price-Beck (applicants) The body corporate (respondent) All owners (affected persons)
SCHEME:	The Beechwoods CTS 20997
JURISDICTION:	Sections 227(1)(b) and 229(3)(a) of the Body Corporate and Community Management Act 1997 (Qld) (Act), applying the Act and the Body Corporate and Community Management (Standard Module) Regulation 2008 (Standard Module).
APPLICATION NO:	0167-2011
DECISION DATE:	30 September 2011
DECISION OF:	P Dowling, Adjudicator
CATCHWORDS:	BODY CORPORATE ADMINISTRATION – whether the body corporate made decisions on matters stated in the agenda for a general meeting; whether the body corporate prepared a proper statement of accounts; whether a person is a service contractor; whether the body corporate provided insurance details to owners; whether the body corporate has maintained common property in good condition; whether the body corporate disclosed payments made to a committee member; whether an administrator should be appointed. Act, ss 15, 94, 95; Standard Module, ss 42, 76, 87(5), 154(5), 159(1), 177.

ORDERS MADE:

I hereby order that the motion carried at the annual general meeting held on 20 November 2010 to authorise the treasurer to spend up to $6,000 p.a. to upkeep the property is void. I further order that, within one week of the date of this order, the body corporate must provide to Suzanne Oldham and Don Price-Beck, the owner of Lot 4, the insurance details mentioned in section 177 of the Standard Module that applied at the time of the annual general meeting held on 20 November 2010. I further order that, within one month of the date of this order, the body corporate must provide Suzanne Oldham and Don Price-Beck a statement disclosing all remuneration, allowances or expenses paid to Mr Lang as the secretary/treasurer and a copy of any body corporate decision authorising any such payment to Mr Lang. I further order that in all other respects, the outcomes sought are dismissed.

REASONS FOR DECISION
Introduction

[1] The applicants are concerned about the management of the body corporate. They believe the body corporate wrongly made decisions at the last annual general meeting, has not approved a proper statement of accounts, and does not properly approve spending and work before it is carried out.
[2] The applicants seek seven outcomes, including the appointment of an external administrator to manage the body corporate.

Jurisdiction

[3] After receiving the application, the commissioner invited the other five lot owners and the committee to make submissions about the application (s 243, Act). The other lot owners made submissions. The applicants made a written reply to submissions.
[4] The commissioner has referred the application to departmental adjudication (s 248, Act). An adjudicator may make an order that is just and equitable in the circumstances 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).
[5] Submissions refer to the Body Corporate and Community Management (Small Schemes Module) Regulation 2008. This module does not apply to the scheme. The Standard Module—not the Small Schemes Module—applies as it is the module identified in the community management statement for the scheme (s 66(1)(b), Act).

Analysis

The first outcome
That all motions and statements of intent not included in the agenda of the annual general meeting held on 20 November 2010 (AGM) are invalid.

[6] The applicants submit the agenda for the AGM included only two motions, yet seven motions and various statements of intent are recorded in the meeting’s minutes.
[7] The agenda of the AGM listed nine items. It included:

1. Recording attendance and apologies.
2. Admitting proxies and voting papers.
3. Accepting the minutes of the previous meeting.
4. Presenting the 2009-2010 accounts.
5. Adopting budgets for 2010-2011.
6. Deciding the contributions to be levied on owners and recognising the start of the financial year.
7. Auditing the statement of accounts for the next financial year.
8. Reviewing the insurance policy for public liability.
9. Electing a committee.

[8] The minutes of the AGM indicate:

• Three owners were present, two other owners gave proxies and the applicants emailed their voting intentions.
• Motions were carried:
  • (i) Accepting the minutes of the previous meeting.
  • (ii) Correcting the financial year and accepting the treasurer’s report.
  • (iii) Agreeing on projected figures for the administrative and sinking funds.
  • (iv) Authorising the treasurer to spend up to $6000 p.a. for the upkeep of the property.
  • (v) Deciding the contributions to be levied on owners and the dates when instalments of the contributions were to be paid. The minutes note late fees would attract 2.5% per month interest.
  • (vi) Not to audit the statement of accounts.
• The secretary/treasurer will present members with information and quotes at the time of renewal of the insurance policy.
• The committee consists of six persons.
• The secretary/treasurer agreed to remain provided he is paid $1,000 for the year.

[9] The owner of Lot 2 (Mr Lang was elected as secretary/ treasurer at the AGM) states there was no discussion, except in general business, of any topic not mentioned in the agenda. The motions and statements of intent are an agreement by the parties present on matters such as accepting the minutes of the previous meeting and accepting the treasurer’s report. They do not see any requirement to change anything with regard to the AGM.
[10] The owner of Lot 5 says it is unreasonable to raise this issue without stating a specific concern, they are confident due process was followed in the meeting and it is critical the body corporate is able to impose interest on fees paid late.
[11] The owner of Lot 7 submits annual general meetings have involved discussing the past year and any perceived problems or costs for the coming year. He realises the body corporate has been a little casual with meeting procedures in the past and says it is endeavouring to correct this.
[12] In reply, the applicants’ state motions or statements of intent were agreed on matters including blanket expenditure by the secretary/treasurer, penalty interest charges and an additional payment to the secretary/treasurer.
[13] I am satisfied the agenda for the AGM stated the substance of each statutory motion to be considered (s 76(3)(a), Standard Module; statutory motion defined schedule, Standard Module). The agenda also correctly included a motion to confirm the minutes of the last general meeting (s 76(2)(a)(v), Standard Module) and it proposed choosing a committee (s 13(1), Standard Module).
[14] An agenda must be included in the notice of a general meeting (s 70(3)(a), Standard Module). Submissions do not explain if the notice of the AGM included other required documents. A notice of a general meeting must include the documents stated in section 70 of the Standard Module. A notice of an annual general meeting must also include a copy of proposed budgets, a copy of the statement of accounts and details about each body corporate policy of insurance (ss 139(6), 154(6) and 177, Standard Module). The notice may also include documentation relating to the election of the committee (ss 21 and 22, Standard Module).
[15] The composition of the AGM notice is not questioned by the applicants. They are concerned about decisions made at the meeting on matters not listed in the agenda. The limited scope of the outcome sought does not necessitate investigating the notice of the AGM. Neither does the general claims made by the applicants in the seventh outcome.
[16] The relevant consideration is whether a resolution was passed on a motion not stated in the agenda. A general meeting may pass a resolution on a motion only if the motion is included in the agenda and stated in the voting paper accompanying the notice of the meeting (s 87(5), Standard Module).
[17] On the basis of the submitted material and because these matters were stated in the agenda, I am satisfied the body corporate could decide: to accept the minutes of the previous general meeting; to accept the treasurer’s report; to adopt budgets; to recognise the new financial year; to fix the contributions to be paid by the lot owners; not to audit the statement of accounts and not to review its insurance policies.
[18] However, the body corporate could not decide to authorise the treasurer to spend up to $6,000 p.a. to upkeep the property. Nor could it fix a penalty to be paid by a lot owner if the person had not paid a contribution by the decided date for payment. Further, it could not agree to pay $1,000 to the secretary/treasurer. The body corporate could not make these decisions because there is no evidence these matters were stated in the agenda for the meeting.
[19] The only matter which is recorded in the minutes as being carried is the treasurer’s authorisation at item 6 of the minutes. There is no evidence the body corporate passed a resolution to fix a penalty or to pay $1,000 to the secretary/treasurer. Therefore, I consider the only question is whether to void the resolution relating to the treasurer’s authorisation.
[20] On balance, I am satisfied an order in the terms sought with respect to the authorisation is warranted. The body corporate could not make the decision given the agenda for the AGM. It is not relevant the persons voting for five of the six lots supported the proposition raised at the meeting. Neither are factors such as the scheme location or its characteristics. It would seem some owners may prefer relaxed meeting procedures. However, the body corporate has little opportunity to adopt such procedures under the Standard Module. This module contains detailed provisions with respect to calling and holding general meetings, including annual general meetings.
[21] In conclusion, I have made an order voiding the resolution relating to the treasurer’s authorisation. If the treasurer has relied on this resolution to spend money, the body corporate will need to properly consider ratifying work which has been carried out.

The second outcome
That the body corporate prepare and disseminate accounts for the 1 September 2009 to 30 August 2010 financial year including comparison figures from the previous year.

[22] The applicants submit the 2009-2010 statement of accounts was not prepared in accordance with the Act as the accounts were not for the financial year and did not include comparison figures from the previous year.
[23] The owner of Lot 2 refers to the minute of the AGM at item 4: “As there was no treasurer’s report for the previous year it was not possible to offer comparative figures”. They state it was not possible to offer comparative figures and the 2011 treasurer’s report will provide a two year comparison.
[24] The owner of Lot 5 states the budget reflects the secretary’s efforts to improve record keeping and the statement of accounts was approved with opposition from the applicants.
[25] In reply, the applicants submit the previous financial documentation (purportedly an excel spreadsheet) is a detailed document that would enable comparative figures to be generated.
[26] Both the applicants and the secretary/treasurer refer to section 88(5) of the Small Schemes Module. As I have stated, this module does not apply to the scheme. However, the incorrect reference is of no consequence as section 154(5) of the Standard Module contains equivalent requirements.
[27] There clearly is a difference of opinion between the secretary/treasurer, the body corporate and the applicants about the information that could be included in the 2009-2010 statement of accounts. However, it is relevant the body corporate resolved to correct the financial year (the corrected year is not questioned by the applicants) and to provide a two year comparative report this year.
[28] In my view, this decision is a reasonable and satisfactory way to resolve the issue. It would seem the primary purpose of providing corresponding figures for the previous financial year in the statement of accounts is to provide some context not only to the income and expenditure for the completed financial year, but also to proposed budgeted expenditure. The applicants have not raised an issue with the content of the treasurer’s report to make it now necessary to change the 2009-2010 statement of accounts.
[29] For these reasons, I have dismissed the outcome sought.

The third outcome
The body corporate provide details of all expenditure for regular services carried out (eg mowing, slashing, weed control) for the 2009-2010 financial year, including the basis on which those payments were made (ie the functions of the service contractor and the basis for calculating their payment) and information on the authority for the body corporate to make payments for these services. If there is no documentation, the body corporate prepare written contracts for each service provider.

[30] The applicants submit there is a lack of accountability for body corporate spending. They state there are no service contracts for regular maintenance, and expenses are not agreed and documented. The applicants argue service contracts provide greater transparency and accountability for regular spending. The applicants claim they do not have information about the basis on which money is spent, the functions of the service contractor, the basis for working out their payment and the authority to make the payments.
[31] The owner of Lot 2 submits Peter Mitchell has the role of gardener and does work for approximately $300 a month. They state he is left to his own devices and does work according to his own schedule. The owner says Len Gorsch does slasher work about three times a year and Hans Erkin sprays noxious weeds. They believe it is insulting (after more than a decade of regular work) to ask these people to provide a written breakdown of the work they do or to seek comparative quotes from other contractors. The owner claims the body corporate is getting excellent service and the cost is cheap. They submit the Pump House look after the pump, and they would love to have another contractor given the price charged but the Pump House is the only local contractor. They value the relationship with the contractors. The owner believes the applicants do not understand the protocols of a country town. The owner states if there was any cause for concern, the body corporate would seek quotes elsewhere.
[32] The owner of Lot 5 submits the budget accurately broke down maintenance and operation costs. They are happy with the costs and productivity of the contractors who charge rates approved in general meeting.
[33] In reply, the applicants’ state submissions do not provide any agreement or authorisation to spend monies. They believe the body corporate should document the details of expenditure on regular services carried out by a contractor such as the basis of the payments made, the contractor’s functions and the basis of working out how the contractor is paid. The applicants say they are after a simple one page statement of works which would have the benefit of transparency and enable any changes to be made on a clear basis.
[34] The contractors mentioned in submissions would appear to carry work on common property. There is nothing to suggest otherwise. The body corporate must administer, manage and control the common property reasonably and for the benefit of lot owners (s 152(1), Act). It must maintain common property in good condition (s 159(1), Standard Module).
[35] The body corporate may enter into contracts (s 95(1)(a), Act). It may engage a person as a service contractor. A service contractor is a person engaged for at least one year to supply services to the body corporate (s 15, Act). The engagement must be in writing and state the term of the engagement, the functions the service contractor is required or authorised to carry out, and the basis for working out payment for services (s 116(2), Standard Module).
[36] It would seem the abovementioned contractors are the persons being referred to in the outcome sought and that they have performed work on common property for a number of years. The work is of a nature that would be performed by a person engaged as a service contractor. However, this does not mean the person is a service contractor. It depends on the circumstances.
[37] In this case, I am not satisfied the applicants have established each person is a service contractor as defined in section 15 of the Act. Even though these persons have performed work for a number of years, it is not demonstrated the body corporate has engaged any of them for at least one year. The minutes of the AGM (at item 5) suggest the body corporate sought to authorise the treasurer to manage the maintenance of common property. The owner of Lot 2 suggests the contractors (other than Mr Mitchell) are engaged to work as necessary. The arrangement may be longstanding (and this may be because of the location of the scheme and the availability of other similarly skilled persons) but this does not make any person a service contractor. With respect to Mr Mitchell, it is not evident he is engaged other than on a monthly basis.
[38] The way these people are engaged is one of the issues raised by the applicants. In my view, they raise a valid question. The resolution at item 5 of the AGM minutes authorising the treasurer to spend up to $6,000 p.a. would not allay their concerns. As owners, they may be concerned about the spending controls. Ordinarily, regular or irregular work would be approved by the committee (if it had the authority). The committee decision would normally specify the work to be carried out and the cost of the work. The record of the committee decision is distributed to owners (s 55, Standard Module). In this way, owners (the members of the body corporate) are kept informed.
[39] The committee can, unless otherwise authorised by the body corporate, authorise spending up to $1,200 (s 151, Standard Module; relevant limit for committee spending, schedule, Standard Module). Unless it has decided otherwise, the body corporate may specifically authorise the committee to spend up to $6,600 (s 151(1)(a) and (3), Standard Module; relevant limit for major spending, schedule, Standard Module). If the committee’s spending limit is $1,200, any spending above the relevant limit for major spending must be authorised by owners in general meeting and normally after the owners have been given at least two quotations (s 152, Standard Module).
[40] The legislative spending controls and disclosure requirements ensure there is accountability and transparency. The body corporate has a record of its authorisation to do work, the work is evidenced by an invoice and an ensuing payment is evidenced by for example, body corporate financial institution records. These safeguards protect the committee, its members and lot owners. A general authorisation (such as that made at item 5 of the AGM) can lead to uncertainty and questions from owners.
[41] It would seem the applicants could have obtained most of the information sought in this outcome under section 205 of the Act. A lot owner can (on payment of the prescribed fee) inspect body corporate records and/or obtain a copy of a body corporate record (s 205, Act). A body corporate record would include documentation evidencing body corporate expenses and the minutes of meetings or other records of body corporate decisions. There is no evidence the applicants have sought and been denied access to this information. Ordinarily, the absence of any such denial would raise a question as to whether a dispute exists between the applicants and the body corporate. The applicants could have also submitted an appropriate motion/s about these matters for consideration in general meeting.
[42] In conclusion, I am not persuaded the body corporate has to prepare written contracts for each service provider. I am not satisfied from the material presented that the body corporate did not include the expenditure for regular services in the 2009-2010 statement of accounts. It may have included the expenditure under one line item. There is nothing to suggest it had to account for each item separately. The body corporate would seem to have dealt with the authorisation to make the payments under the treasurer’s authorisation. As I have voided the resolution, the body corporate will, as I have stated need to consider ratifying any unauthorised expenditure. It should also give some thought to dealing with this spending into the future.
[43] If the applicants would like to see some controls in place, they may consider submitting an appropriate motion or motions to the body corporate for its consideration. There are benefits to having a scope of works; both the body corporate and the contractor know the work that is expected to be carried out.
[44] For these reasons, the outcome sought is dismissed.

The fourth outcome
That the body corporate did not provide insurance policy details to the AGM and the policy was not reviewed.

[45] The applicants submit the body corporate did not provide the required insurance policy details at the AGM.
[46] The owner of Lot 2 states comparative quotes were sought. The owner of Lot 5 says this should be rectified at the next annual general meeting.
[47] At each annual general meeting, the body corporate must consider a motion to review its insurance policies (s 76(3)(a), Standard Module; statutory motion defined, schedule, Standard Module). The notice of the meeting must include policy details mentioned in section 177(2) and (3) of the Standard Module.
[48] While the agenda for the AGM made reference to insurance, there is not a minuted decision. The information given to owners in the notice of the meeting is not apparent. Submissions do not demonstrate the applicants were given the details stated in section 177(2) and, if applicable, section 177(3).
[49] As an owner, the applicants are entitled to this information. The statutory motion allows owners, based on the details they have been given, to make a decision about reviewing insurance. The minutes do not demonstrate the body corporate made any decision about whether or not to review any policy.
[50] The applicants are entitled to the details specified in section 177(2) and (3). In the circumstances, I have made an order that the body corporate must provide these details to them.

The fifth outcome
That the body corporate follow up with Superior Asphalt to complete the unfinished work as part of the 2010 roadwork contract dated 11 February 2011.

[51] The applicants submit the body corporate decided in February 2010 to engage Superior Asphalt to repair a road. They state the contractor did not complete the contracted work and the secretary/treasurer refuses to raise this matter with the contractor. The applicants say the uncompleted work includes failing to repair all damaged edges that had been marked for repair and not completing the cracked sealing on the corner.
[52] The owner of Lot 2 states all other body corporate members have accepted the final payment to the contractor. The owner of Lot 5 submits the work has been approved by all owners except the applicants.
[53] In reply, the applicants dispute the finished result of the work.
[54] There is no question about engagement of Superior Asphalt or the scope of the approved work. It would seem the work related to maintaining common property in good condition (s 159(1), Standard Module).
[55] There clearly is a difference of opinion as to whether the agreed work has been completed. The majority of owners do not appear to have a problem with the work. The applicants believe Superior Asphalt should be doing further work. This, in my view, is a matter for the body corporate to decide. If it considers the agreed work has been completed, that is the end of the matter. I am not satisfied from submissions the body corporate would be acting unreasonably making this decision (s 94(1)(a) and (2), Act).
[56] If the applicants believe a part of common property is not in good condition, this is a matter the applicants can initially pursue through the body corporate. Ultimately, if they believe the body corporate is not maintaining common property in good condition, the applicants could make a dispute resolution application.
[57] For the above reasons, the outcome sought is dismissed.

The sixth outcome
That the body corporate provides details of all monies paid to the secretary/treasurer since taking office and the agreement made by the body corporate to do so.

[58] The applicants submit the secretary/treasurer has decided to pay himself expenses without proper authority. The applicants provided an extract from an email by Mr Lang dated 31 March 2010 which discusses spending and refers to work he carried out for which he put an invoice to the body corporate (he stated he would not charge for his labour). The applicants say the secretary/treasurer again sought payment for labour on 26 January 2011 without the authority of an ordinary resolution.
[59] The owner of Lot 2 states all monies paid to the secretary will be declared in the treasurer’s report and the only sum other than the $1,000 paid by the body corporate to the secretary/treasurer as agreed at the AGM is for road work. They say no funds have been paid to the secretary/treasurer that has not been cleared with all lot owners. The owner says it has been made clear to the secretary/treasurer that the role includes maintaining the property with a certain degree of autonomy.
[60] The owner of Lot 3 submits she has respected and appreciated when Mr Lang has acted quickly to make repairs. The owner of Lot 5 says payments have been approved by owners except the applicants.
[61] In reply, the applicants submit the only ordinary resolution passed is to pay the secretary/treasurer $1,000. They say the body corporate has not approved an hourly rate or other work. The applicants argue the secretary cannot act autonomously if it is contrary to the Act and requires an ordinary resolution. They believe the body corporate should agree to work before it is done and money is spent. The applicants say the secretary should not be permitted to invoice work already done without approval as it will lead to a situation where people feel they have no choice but to pay the invoice.
[62] Firstly, I am not satisfied the body corporate properly agreed at the AGM to the secretary/treasurer being paid $1,000 for the year. The minuted record under general business is not authority to pay the secretary/treasurer. Secondly, any response to an email such as that of 26 January 2011 from Mr Lang asking if anyone had any objections to a charge for material and labour to construct a concrete strip is not a body corporate decision.
[63] A body corporate decision can only be made in general meeting (ss 65 to 97, Standard Module) or by the committee. The committee can make a decision at a meeting (ss 44 to 53, Standard Module) or by voting outside a committee meeting (s 54, Standard Module).
[64] As argued by the applicants, there is a question about the committee being able to authorise the payment. The committee cannot make a decision on a restricted issue (s 100(1) and (2), Act). A restricted issue includes paying remuneration, allowances or expenses to a member of the committee without any authorising decision in general meeting (ss 42(1)(f) and 43, Standard Module).
[65] The applicants are entitled to be concerned about payments to the secretary/treasurer or to any other committee member when an authorisation such as the record from the AGM or a response to the above email is taken to evidence body corporate approval. The module regulates the payment of monies to committee members. It enables the body corporate in general meeting (if necessary) or the committee to make decisions authorising work, including work required in emergency circumstances.
[66] A committee member who does work on an assumption he or she will be paid an hourly rate carries the risk the payment will not be subsequently approved by the body corporate or will be disallowed under the dispute resolution provisions of the Act. While it would seem the majority of owners currently support the secretary/treasurer, it should be noted the body corporate and the committee must act reasonably making a decision (ss 94(2) and 100(5), Act). The fact a majority of owners may support an unauthorised action does not, of itself, constitute a reasonable decision.
[67] This outcome is not about a purported body corporate decision. It primarily concerns access to body corporate records. The applicants could have obtained this information under section 205 of the Act. A body corporate record would include financial documentation evidencing body corporate expenses and the minutes of meetings or other records of body corporate decisions. There is no evidence the applicants have sought and been denied access to this information.
[68] Ordinarily, the absence of any such denial would raise a question as to whether a dispute exists between the applicants and the body corporate. However, the annual statement of accounts must disclose all remuneration, allowances or expenses paid to committee members (s 154(5)(b), Standard Module). This statement must be included in the notice of each annual general meeting.
[69] It is not clear this disclosure has been made to owners. For this reason, I have ordered the body corporate must disclose the payments made to the secretary/treasurer, Mr Lang. It must also provide a copy of any body corporate decision authorising a payment to Mr Lang.

The seventh outcome
That North Shore Body Corporate be appointed as administrator/body corporate manager for 12 months so the necessary controls can be put in place to run the body corporate in accordance with the Act and to provide greater financial transparency and accountability.

[70] The applicants submit they have continually raised issues about body corporate management and finances since December 2009. They say meetings are not held in accordance with the Act, statutory motions are not dealt with at annual general meetings, proxies are accepted without the proper documentation, and motions are drafted at meetings and voted on. The applicants state the body corporate has levied contributions without a budget, failed to seek competitive quotations, failed to provide relevant documentation before meetings, not included all motions to be considered on the agenda, and paid monies without body corporate agreement.
[71] The owner of Lot 2 states the proposal has been discussed and it was felt the costs would be prohibitive due to the nature of the roles undertaken by the secretary/treasurer. The owner states the body corporate has been operating very successfully for 25 years. They say they have agreed with the applicants that processes could be tightened and several reforms have been instigated. The owner states the scheme is subject to unexpected treefalls, burst pipes and pump problems; having a body corporate manager organise quotes and actions in emergencies is impractical.
[72] The owner of Lot 3 submits the body corporate has worked harmoniously for around 20 years.
[73] The owner of Lot 5 objects to an administrator being appointed. They say owners identified concerns with the body corporate’s management when Mr Lang was appointed secretary and before the applicants had concerns. The owner submits Mr Lang has made an effort to address the shortcomings.
[74] The owner of Lot 6 states she has been involved in the body corporate for nearly 10 years. The owner submits the body corporate has been run smoothly and in the spirit of openness and co-operation. The owner believes financial and practical matters have been discussed and voted on, and things have proceeded in an orderly and transparent manner.
[75] The owner of Lot 7 submits he has enjoyed a harmonious relationship with owners in the 25 years he has been a resident.
[76] In reply, the applicants feel they are considered to be outsiders who had the temerity to challenge the running of the body corporate and go against the established rule and the way things have always been done. The applicants submit this underlies the need for professional outside body corporate management. They state the committee seems to go along the lines of its okay to do what they want regardless of the Act as long as most agree. The applicants believe the litany of instances of non-compliance with the Act necessitates the appointment of an outside administrator. They say it is a nice sentiment owners are endeavouring to correct issues but compliance has been a long time coming and does not seem to be changing into the future.
[77] There clearly is evidence from the material presented that some things done by or for the body corporate have not been in accordance with the legislation. Submissions indicate some owners recognise this. The question is whether it is demonstrated it is necessary that I appoint an administrator.
[78] The appointment “of an administrator...is a significant step since it takes responsibility for the conduct of the affairs of the body corporate out of the hands of the committee and vests it in the administrator. An applicant must therefore demonstrate to the required standard that such a step is appropriate. Typically, without attempting to be exhaustive, there will be evidence that the body corporate is so dysfunctional that it cannot operate properly within the statutory framework that governs it, or that there is a well founded suspicion, on the part of an applicant for appointment of an administrator of financial malpractice within the body corporate, or that there is conduct that amounts to undue oppression in the conduct of its affairs.”: Surace v Commisso [2009] CCT KA002-09, paragraph 44.
[79] Applying Surace, I am not satisfied from the material the appointment of an administrator is necessary.
[80] There is no evidence the body corporate has not held annual general meetings, has not considered and decided matters (or most of the matters) as required by the legislation, or has not chosen a committee. It may not have done many of these things in strict compliance with the legislation. However, it should be noted the courts have recognised that the very detailed provisions of the regulations make it almost inevitable that there will be failures to comply with the regulations from time to time (Wei-Xin Chen v Body Corporate for Wishart Village CTS 19482, Appeal 4080 of 2000, District Court Brisbane, 29 May 2001).
[81] It is also relevant there is nothing to suggest the body corporate and committee members have not acted in good faith or that there is any financial malpractice. Further, this is the first dispute resolution application made in relation to this scheme. There is no evidence of endemic and fundamental management problems. Neither is there evidence of flagrant disregard for the legislation.
[82] Importantly, emails indicate there has been an attempt to improve some management processes. The fact the body corporate continues to do some things contrary to the legislation does not warrant appointing an administrator. The main issues identified in this application relate to the body corporate properly authorising work and expenditure, and properly making decisions. Many of the issues evident in this application could be dealt with if the body corporate makes and minutes proper decisions and discloses decisions to owners.
[83] These matters can be remedied if owners gain knowledge and understanding of the legislation. Assistance is available from the commissioner’s office, including by telephone during business hours. The commissioner’s website (www.justice.qld.gov.au/bccm) contains extensive material.
[84] The body corporate may engage a person (such as a body corporate manager) to provide some level of administrative assistance. A body corporate manager does not make body corporate decisions. The committee or a properly authorised person could still do things relevant to the scheme such as reading electricity meters or dealing with maintenance issues as they arise. As with any other contractor, it is a matter for the body corporate to decide the scope of work a person is engaged to perform.
[85] The body corporate should now be aware of its legislative obligations or of ways to remedy many of the issues highlighted by the applicants. Continuing problems may, if a similar dispute arises in the future, be a basis for making an order of the nature sought here.
[86] In conclusion, I have dismissed the outcome sought.