Markham Court [2011] QBCCMCmr 549 (9 December 2011)

Last Updated: 22 December 2011

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

CITATION:	Markham Court [2011] QBCCMCmr 549
PARTIES:	Jeffrey William English (applicant) The Body Corporate (respondent) All owners (affected persons)
SCHEME:	Markham Court CTS 6320
JURISDICTION:	Sections 227(1)(b) and 229(3)(a) of the Body Corporate and Community Management Act 1997 (Act), and the Body Corporate and Community Management (Accommodation Module) Regulation 2008 (Accommodation Module).
APPLICATION NO:	0672-2011
DECISION DATE:	9 December 2011
DECISION OF:	R Miskinis, Adjudicator
CATCHWORDS:	Whether purported resolution appointing body corporate manager valid, sections 79 and 112 of the Accommodation Module.

ORDERS MADE:

I hereby declare that the resolution on motion 9, considered at the last AGM, is invalid. I hereby order that within 3 months of the date of this order, the body corporate is to call and hold an extraordinary general meeting for the purpose of considering a motion to appoint a body corporate manager.

REASONS FOR DECISION
Introduction

[1] Markham Court consists of 68 lots and common property. The Community Management Statement indicates that the Body Corporate and Community Management (Accommodation Module) Regulation 2008 (Accommodation Module) applies to the scheme. Department of Environment and Resource Management records show the scheme is registered on a Building Unit Plan.
[2] This is an application made by Mr. Jeffrey English, a committee member, on 14 July 2011 under the Body Corporate and Community Management Act 1997 (Act).
[3] The final outcome sought by the applicant relates to the outcome of voting on Motion 9 at the last AGM. The applicant seeks an order that the vote on Motion 9 – option C be upheld based on the clear preference for this option (37 votes of 44 counted)”.

Procedure and jurisdiction

[4] 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.
[5] 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) a claimed or anticipated contravention of the Act or the CMS; or

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

(c) a claimed or anticipated contractual matter about -

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

(ii) the authorisation of a person as a letting agent.

Matters in dispute

[6] The applicant is the current Chairman/ Secretary and has concerns regarding the way that Motion 9 dealt with at the last Annual General Meeting on 23 June 2011.
[7] Motion 9 was titled “Engagement of Body Corporate Manager” and read as follows:

“That under the authority of Section 112 of the BCCM Act 1997 Markham Court CTS 6320 engages a Body Corporate Manager for the supply of administrative services to the body corporate commencing on 18/7/11.
Alternative A – Submitted by Committee

Sargeant Strata Pty. Ltd. in accordance with the Administration Agreement provided by them attached to this notice marked “A”.
OR
Alternative B – Submitted by Committee

Gold Coast Body Corporate Specialists in accordance with the Administration Agreement provided by them attached to this notice marked “B”.

OR
Alternative C – Submitted by D. Nelson of lot 55
Archers BCCM (Gold Coast) Pty. Ltd.

[8] The minutes of the meeting state that there were 44 votes in favour of appointing a body corporate manager, 7 votes in favour of “Alternative A” and 0 votes in favour of “Alternative B”. Although 37 owners voted in favour of Alternative C, this is not mentioned in the minutes.
[9] The minutes go on to state that “Motion 9 was submitted by the committee as alternative motions were submitted dealing with the same matter. As required by section 70 of the BCCM Accommodation Module the committee submitted motion 9 and listed the substance of each of the original motions as alternatives. Motion 9 was carried but when the alternatives were to be considered, Alternative C, submitted by D Nelson was ruled out of order by the Chairman as the original motion submitted by Mr Nelson was required to include a copy of the agreement which could be circulated with the Notice of Meeting. No such agreement was provided with the motion and explanatory material supplied by Mr Nelson. As the motion was not in accordance with legislative requirements Section 112 (c) the Chairman ruled the submission from Mr. Nelson Out of Order. Accordingly Alternative “C” did not have votes recorded against it”.
[10] The owner who submitted Option C for consideration at the AGM states that he provided a copy of the motion, an explanatory note and a copy of a draft Administration Agreement to Sargeant Strata. When he became aware that a copy of the agreement was not distributed, he personally sent copies of the draft Administration Agreement to all owners.
[11] The applicant states that when this matter was raised at the AGM, a number of owners produced copies of the agreement, confirming that copies of the agreement had been received by owners well before the AGM. It is therefore submitted that owners had enough information to make an informed decision to appoint Archers BCCM (Gold Coast) Pty. Ltd. as body corporate manager and that this is reflected by the fact that 37 of the 44 votes were for Option C.
[12] When the Chairman made his ruling regarding motion 9, the meeting was not advised that the decision of the chairman could be overruled as required by section 79(2) of the Accommodation Module.
[13] Further submissions made by the applicant include the following:

• Approximately 82% of owners who submitted a voting paper were in favour of appointing Archers body Corporate management;
• It is probable that the whole of motion 9 was invalid as it did not refer to the proposed terms of the agreements or the remuneration payable;
• It was not appropriate to only rule part of motion 9 out of order;
• When the Chairman made his ruling regarding motion 9, the meeting was not advised that the decision of the chairman could be overruled as required by section 79(2) of the Accommodation Module.

[14] The application is supported by the other committee members.
[15] Submissions made on behalf of Sargeant Strata included the following:

• Although the applicant states that the Chairman/ Secretary provided them with written instructions, there were no resolution by the committee to give these instructions to the body corporate manager;
• The Chairman ruled Alternative C out of order so no votes could be recorded on that part of the motion;
• They therefore believe there is a valid decision of the body corporate to appoint Sargeant Strata as the body corporate manager.

Analysis

Motion 9 was a motion relating to the appointment of a body corporate manager and read as follows:

“That under the authority of Section 112 of the BCCM Act 1997 Markham Court CTS 6320 engages a Body Corporate Manager for the supply of administrative services to the body corporate commencing on 18/7/11. Alternative A – Submitted by Committee

Sargeant Strata Pty. Ltd. in accordance with the Administration Agreement provided by them attached to this notice marked “A”.
OR
Alternative B – Submitted by Committee

Gold Coast Body Corporate Specialists in accordance with the Administration Agreement provided by them attached to this notice marked “B”.

OR
Alternative C – Submitted by D. Nelson of lot 55

Archers BCCM (Gold Coast) Pty. Ltd.”

[16] Mr. Nelson, who submitted Alternative C for consideration at the AGM, states that he provided a copy of the motion, an explanatory note and a copy of a draft Administration Agreement to Sargeant Strata for distribution to all owners. Mr. Nelson further states that when he became aware that a copy of the Archers Agreement was not distributed, he personally sent copies of the draft Administration Agreement to all owners. This is confirmed in a submission from the building manager.
[17] Out of the 44 owners, 37 owners made submissions calling for their vote in favour of Archers Body Corporate Management to be counted. Many of these owners confirmed that they received a copy of the Archers contract a few days after receiving the Notice of the AGM and voting papers.
[18] Nevertheless, Alternative C, submitted by Mr. Nelson, was ruled out of order by the Chairman on the basis that a copy of the Archer’s agreement was not circulated with the Notice of Meeting.
[19] I am of the view that the Chairman’s ruling was incorrect in certain respects. Paragraph 112(2)(c) of the Accommodation Module provides that the material forwarded to members of the body corporate for the general meeting should include:

(i) for an engagement or authorisation the terms of the engagement or authorisation, including

(A) when the term of the engagement or authorisation begins and ends; and

(B) the term of any right or option of extension or renewal of the engagement or authorisation.

[20] In my view it is not necessary for the complete contract to be distributed provided owners are given sufficient details regarding the terms of the agreement including details of its duration and any rights of renewal or extension.
[21] Secondly, paragraph 112(2)(c) does not specifically require that such material be distributed with the Notice of meeting. Obviously, owners should receive this information well in advance of the meeting but I do not believe it is essential that this material should arrive with the Notice of Meeting.
[22] Further, although it was obvious that the majority of owners had voted in favour of Alternative C, the Chairman failed to advise the meeting as to how his decision could be overruled as required by section 79 of the Accommodation Module which provides as follows:

79 Power of person chairing meeting to rule motion out of order

(1) The person chairing a general meeting of the body corporate must rule a motion out of order if -

(a) the motion, if carried, would-

(i) conflict with the Act, this regulation or the by-laws or a motion already voted on at the meeting or

(ii) be unlawful or unenforceable for another reason; or

(b) except for a procedural motion for the conduct of the meeting, or a motion to correct minutes - the substance of the motion was not included in the agenda for the meeting.

(2) The person chairing the meeting must, when ruling a motion out of order-

(a) give reasons for the ruling; and

(b) for a ruling given under subsection (1)(a)-state how the ruling may be reversed by the persons present and entitled to vote on the issue.

(3) The persons present and entitled to vote may reverse a ruling given under subsection (1)(a) by passing an ordinary resolution disagreeing with the ruling.

(4) The reasons given by the person chairing the meeting for ruling a motion out of order must be recorded in the minutes of the meeting.

[23] I am therefore of the view that the resolution on motion 9 was invalid and the body corporate did not validly resolve to engage Sargeant Strata Pty. Ltd. as body corporate manager.

[24] This leads to the question of whether it is appropriate to order that there was a valid resolution to adopt Alternative C – Archers BCM (Gold Coast) Pty. Ltd. It is not disputed that 37 of the 44 owners voted in favour of this option. However, at least two owners claim that they did not receive a copy of the Archers Agreement, and suggest that a copy of this document may have only been provided to those owners whose lots are in the rental pool. It is therefore difficult for me to determine with any certainty, whether every lot owner received a copy of the Archers Agreement before casting their vote.

• [25] I believe that the most appropriate orders to make are
  • That the resolution on motion 9 is invalid; and
  • that within 3 months of the date of this order the body corporate is to call and hold an extraordinary general meeting for the purpose of considering a motion to appoint a body corporate manager.

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[1] See sections 227, 228, 276 and Schedule 5 of the Act.