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2 Product Information Disclaimer No person should rely on the contents of this publication without first obtaining advice from a qualified professional person. This publication is sold on the terms and understanding that (1) the authors, consultants and editors are not responsible for the results of any actions taken on the basis of information in this publication, nor for any error in or omission from this publication; and (2) the publisher is not engaged in rendering legal, accounting, professional or other advice or services. The publisher, and the authors, consultants and editors, expressly disclaim all and any liability and responsibility to any person, whether a purchaser or reader of this publication or not, in respect of anything, and of the consequences of anything, done or omitted to be done by any such person in reliance, whether wholly or partially, upon the whole or any part of the contents of this publication. Without limiting the generality of the above, no author, consultant or editor shall have any responsibility for any act or omission of any other author, consultant or editor. About Wolters Kluwer Wolters Kluwer is a leading provider of accurate, authoritative and timely information services for professionals across the globe. We create value by combining information, deep expertise, and technology to provide our customers with solutions that contribute to the quality and effectiveness of their services. Professionals turn to us when they need actionable information to better serve their clients. With the integrity and accuracy of over 45 years experience in Australia and New Zealand, and over 175 years internationally, Wolters Kluwer is lifting the standard in software, knowledge, tools and education. Wolters Kluwer When you have to be right. Enquiries are welcome on First edition: April 2018

3 ISBN CCH Australia Limited All rights reserved. No part of this work covered by copyright may be reproduced or copied in any form or by any means (graphic, electronic or mechanical, including photocopying, recording, recording taping, or information retrieval systems) without the written permission of the publisher. Preface The purpose of writing this text has been to draw together the fragmented nature of Body Corporate law and present the legal principles as they currently apply, in a more compartmentalised and conceptualised way. The task of bringing together the various elements on each topic has been challenging on account of the wide-ranging reforms that have occurred since the inception of the Body Corporate and Community Management Act 1997 (Qld) and the significant proposed changes that again herald a re-shaping of the landscape of Queensland strata law in the near future. Recommendations from the Commercial and Property Law Research Centre at the Queensland University of Technology, while not ensconced into the legislation, have also been incorporated as possible directions to future reforms. To this end, the text is designed to provide guidance to practitioners, students and those operating in the strata industry to better navigate the law and practical processes, particularly those relating to debt recovery, meeting processes and voting, and dispute resolution processes generally. The text also addresses matters pertinent to strata development and harnesses applicable laws relevant to the property developer. I have drawn on my own experience in practicing law in the various applicable jurisdictions, as well as my work in Body Corporate management. That legal experience and operational best practice in Body Corporate management permeates through the text. Unavoidably, there is a particular focus on case law which provides the reader with useful direction on the interpretation of the legislative provisions. Conceptual and practical considerations are discussed with reference to applicable forms and flowcharts to diagrammatically break down some highly prescriptive concepts and processes. Certain acknowledgements are in order. I thank the publisher for their support and resolve in seeing a significant need and demand for a pronouncement of the law of Body Corporate in Queensland, being the first of its kind for this jurisdiction. I thank my trusted friend and colleague, Nasrin Jazayeri for her dedication, skill and input in all matters relating to formatting, flowcharts, editing and content. Her encouragement has been invaluable. I also thank my research assistants for their dedication with me in traversing an enormous volume of case law and legislation. Finally, I thank my Body Corporate management team for their input, patience and encouragement throughout the lengthy writing process. It is trusted that the text will assist practitioners in their work and also make the law of Body

4 Corporate more accessible to non-lawyers, whether they be professionals or interested lot owners and Body Corporate committee members. The law is stated as at the end of January Brisbane April 2018 Wolters Kluwer Acknowledgments Wolters Kluwer wishes to thank the following who contributed to and supported this publication: Director, Commercial & Strategy: Lauren Ma Head of Legal Content: Carol Louw Head of Publishing & Digital Strategy: Lilia Kanna Content Coordinator: Nathan Grice Editor: Clare Kent Cover Designer: Jessica Crocker About the author Marc J Mercier About the Author Marc Mercier has a diverse background in the law and alternative dispute resolution in Queensland. Admitted as a Barrister-at-Law of the Supreme Court of Queensland and of the High Court of Australia, Marc specialises in Body Corporate law, commercial law, criminal and family law. Marc is also a Nationally Accredited Mediator and registered Family Dispute Resolution Practitioner through the Commonwealth Attorney General s Department. As a springboard to his areas of practice, Marc draws upon his significant training and qualifications obtained through a Bachelor of Science (majoring in Anatomy, Physiology and Forensics), a Bachelor of Laws and a Master of Laws (specialising in litigation and dispute management), all from the University of Queensland. M J MERCIER

5 Initially, Marc commenced practice as a Barrister-at-Law, engaging as counsel on behalf of the Queensland Office of the Director of Public Prosecutions, prosecuting a broad range of criminal matters, including confiscation of proceeds of crime, complex Supreme Court bail applications, sentencing and prosecution of serious offences. Marc then commenced work at the Private Bar of Queensland as a Barrister-at-Law, undertaking a broad range of matters concerning commercial, property, industrial, family and criminal law. During this time, Marc also conducted mediations through his mediation practice, civil and criminal trials, and applications in a wide-range of jurisdictions. In furtherance to a specialisation in Alternative Dispute Resolution, Marc was engaged in conciliation work at the Residential Tenancies Authority as a Senior Conciliator, and then as a Conciliator at the Office of the Commissioner for Body Corporate and Community Management. During his position as Senior Conciliator in the Residential Tenancies Authority and Conciliator at the Office of the Commissioner for Body Corporate and Community Management, Marc gained expert knowledge of the respective legislation administered by those bodies and remains an expert in the field of Alternative Dispute Resolution. Marc s appointment within the Office of the Commissioner for Body Corporate and Community Management included the undertaking of complex conciliations concerning the jurisdiction of the Body Corporate and Community Management Act 1997 (Qld), associated Regulation Modules and other closely-related legislation. Marc was also Manager of the Conciliation Service in the Office of the Commissioner for Body Corporate and Community Management for a period during Following on from the Office of the Commissioner for Body Corporate and Community Management, Marc was appointed as Principal Conciliator for Queensland with the Anti- Discrimination Commission, where he had carriage of highly complex and media-sensitive matters, at times involving cross jurisdictional matters concerning Body Corporate law. Understanding of the significant issues confronting Body Corporates in Queensland later convinced Marc of the need to establish a Body Corporate Management practice and a Body Corporate property development consultancy in parallel with his legal practice as a means of harnessing a more holistic approach in the Body Corporate and property industry. It is this broad industry-specific experience and high-level qualifications that has allowed Marc to elucidate cogent and incisive interpretation on Body Corporate Law through the practitioner text, Body Corporate Law in Queensland Practice and Procedure. For more background information please visit:

6 CHAPTER 1: BODY CORPORATE HISTORY... 1 History of Strata Titling in Queensland... 1 Building Units Titles Act 1965 (Qld) (BUTA)... 4 Group Titles Act 1973 (Qld) (GTA)... 8 Building Units and Group Titles Act 1980 (Qld) (BUGTA) amendment to the Building Units and Group Titles Act 1988 amendment to the Building Units and Group Titles Act 1990 amendment to the Building Units and Group Titles Act Body Corporate and Community Management Act 1997 (BCCMA) Amendments to the BCCMA Natural Resources and Other Legislation Amendment Act 2000 Property Agents and Motor Dealers Act 2000 (PAMD Act) Tourism, Racing and Fair Trading (Miscellaneous Provisions) Act 2002 Body Corporate and Community Management and Other Legislation Amendment Act 2003 Body Corporate and Community Management and Other Legislation Amendment Act 2007 Body Corporate and Community Management Amendment Act 2009 Property Agents and Motor Dealers and Other Legislation Amendment Act 2010 Body Corporate and Community Management and Other Legislation Amendment Act 2011 Body Corporate and Community Management and Other Legislation Amendment Act 2013 CHAPTER 2: BODY CORPORATE ESTABLISHMENT AND PROPERTY DEVELOPMENT Introduction Objects and Purpose of the BCCMA Community Titles Scheme and types of Body Corporate Arrangements Community Titles Scheme Common Seal Original Owner Original owner obligations Community Management Statements Meaning of CMS Stakeholders in community titles scheme Recording of Community Management Statement Inclusions in the CMS Notation of CMS Recording new CMS Changing CMS CMS for Higher scheme prevails (s.58 BCCMA) Body Corporate consent to record a new Community Management Statement (s.62 BCCMA) Responsibility for new CMS (ss BCCMA) Time for lodging request to record new statement (s.65 BCCMA) Requirements for new CMS (s.66 BCCMA) Requirement for Service Location Diagram QCAT or Court Ordered Replacement of CMS (s.295 BCCMA) CMS Summary of provisions Building Management Statements Nature of a BMS Content of BMS (s.54c LTA) Registration of BMS (s.54d LTA) Amendment of BMS (s.54e LTA)

7 Extinguishing a BMS (s.54h LTA) Lot Entitlements History of Lot Entitlements Present position on lot entitlements Terminology Equality principle Relativity principle Application of lot entitlements Adjustment of lot entitlements Disputes about Lot Entitlements under s.47a BCCMA Limited Adjustment of Lot entitlements - Special Cases (ss.50-51c BCCMA) Transitional arrangements in relation to lot entitlements Statutory Easements Other legislation that impacts on community titles scheme establishment and planning Building Act Land Act 1994 Land Title Act 1994 (LTA) Land Title Practice Manual Property Law Act 1974 Planning legislation Integrated Planning Act (Qld) Sustainable Planning Act 2009 (Qld) Planning Act 2016 (Qld) Establishment of body corporate post development application process CHAPTER 3: BODY CORPORATE STRUCTURAL CHANGES: REINSTATEMENT, AMALGAMATION, TERMINATION General application Application of Ch 2, Pt 8 (s.71 BCCMA) Reinstatement process under court approval (s.72 BCCMA) District Court actions Parties to a reinstatement process Variation and substitution of court orders (s.73 BCCMA) Reinstatement process under resolution without dissent (s.74 BCCMA) Scope of resolution Registration for changes to scheme under approved reinstatement process (s.75 BCCMA and s.115t LTA) Termination of CTS (ss 76-81) General Principles Termination of schemes (s.78 BCCMA) Effecting termination of scheme (s.79 BCCMA) Dissolution of body corporate for terminated scheme (s.81 BCCMA) Potential future directions in matters concerning scheme termination Amalgamation of CTS (ss 83-88) General principles of amalgamation (s.82 BCCMA) Community titles schemes that may be amalgamated (s.83 BCCMA) The process approach to amalgamation (s.84 BCCMA) Effecting amalgamation of community titles schemes (s.86 BCCMA) Dissolution of bodies corporate on amalgamation (s.87 BCCMA) Effects of amalgamation of community titles schemes (s.88 BCCMA)

8 CHAPTER 4: BODY CORPORATE COMMITTEE General concepts General powers of the body corporate The concept of reasonableness The effect of non-compliance with legislative provisions in the BCCMA and Regulation Modules The Body Corporate Committee generally Composition of committee Exceptions to the committee s composition Tempering of the strict requirements for a committee Eligibility to be a voting member of the committee (ss SM) Ineligibility to be a voting member of the committee No requirement to establish eligibility at the time of nomination Power of attorney (POA) Services contractors and their associates Ineligibility due to body corporate debt Committee eligibility for de facto partners (including same sex partners) Nomination of representative of lot owner as committee member Co-ownership and eligibility to be a voting member (s.11 SM) Non-voting members of committee (s.12 SM) When a committee is chosen (ss SM) Exceptions to appointing committee at an AGM Committee appointment Ballot required Accommodation Module Regulation and the conduct of ballot Committee nominations Nomination procedure Nomination if single lot ownership (s.17 SM) Nomination if multiple lot ownership Who can be nominated to the committee? (s.17 SM) Nomination requirements (s.18 SM) Requirement for consent from person being nominated Modified nomination procedures for committee election at first AGM (ss SM) Conduct of elections for committee members at an AGM Committee ballot paper requirements Committee ballot process Conduct of ballot (s.24 SM) Use of proxy to nominate person at election Deciding committee members at election Declaration of voting results (s.28 SM) Committee appointment at an EGM (following an AGM) Purpose and Timeframe for required EGM (s.30 SM) EGM committee appointment does not require election Co-owner appointment at an EGM Term of Office Vacancy in committee position due to non-attendance without leave Removal of committee member Filling Casual Vacancies (ss SM, s.99(3)(b) BCCMA) Committee powers and restricted issues for the committee

9 Committee powers (s.100 BCCMA) Restricted issues (ss SM) Defamation Protection of committee members from liability (s.101a BCCMA) Protection of body corporate and committee from liability for defamation (s.111a BCCMA) The Defamation Act CHAPTER 5: BODY CORPORATE SERVICE CONTRACTORS Introduction to Service Contractors Original owner s obligations about engagements and authorisations Reasonableness of contractual duties Body corporate s authority to make engagement or give authorisation, or amend engagement or authorisation Scope of application Approval requirements Amendment of engagement or authorisation Requirement to include terms of engagement Requirement for commencement and end date of engagement Requirement to follow procedures in s.114 SM generally Engagement agreement not required with notice Combined engagement and authorisation (s.117 BCCMA) Form of engagement (s.116 SM / s.114 AM) Form of authorisation of service contractor (s.117 SM / s.115 AM) Term of engagement of body corporate manager (s.118 SM / s.116 AM) Maximum term for body corporate manager Requirement for new engagement upon expiry Term of engagement of service contractor (s.119 SM / s.117 AM) Maximum term for service contractor Term of authorisation of letting agent (s.120 SM / s.118 AM) Maximum term for letting agent Commencement of term of engagement or authorisation (s.121 SM / s.119 AM) No consideration for engagement or authorisation Limitation on benefit to body corporate under service contractor engagement Letting agent s obligations for letting agent lot (s.116 BCCMA) Code of conduct Schedule 2 BCCMA - Code of conduct for body corporate managers and caretaking service contractors Schedule 3 BCCMA - Code of conduct for letting agents Performance of powers of body corporate committee and executive members by body corporate manager Engagement of body corporate manager to carry out functions of committee and executive members - chapter 3, part 5 engagement (ss SM, ss BCCMA) Requirements for appointment under chapter 3 part 5 SM Distinction between BCM and administrator When the appointment may occur Appointment motion required for EGM (s.32 SM) Form of Engagement (s.59 SM) Term of Engagement (s.60 SM) Revoking authorisation/engagement Functions and powers (s.61 SM)

10 Body corporate manager s reports to body corporate (s.62 SM) Disclosure requirements for service contractors Consequences for failure to disclose Disclosure of commission or other benefit (s.135 SM) Disclosure of associate contract (s.134 SM) Associate supplying goods or services (s.133 SM) Occupation Authority Occupation of common property by service contractor or letting agent (s.136 SM) Conditions of use for occupation authority Limitations on occupation authority Amendment and termination of occupation authority Transferring engagements and authorisations General matters Ways to approve transfer Factors to consider in granting consent to transfer Timing for the committee granting consent to the transfer Imposing of conditions to the transfer Payment of amount on transfer of rights under engagement of authorisation Relevant dates concerning a transfer (important terminologies) Amount payable on a transfer within the prescribed period (s.126 SM, s.122(3) BCCMA) Protection for financier of contract Meaning of financier (s.123 BCCMA) Requirement for financier s address for service Notice of changes affecting financed contract When a person stops being a financier Limitation on termination of financed contract (s.126 BCCMA) Circumstances when financed contract cannot be terminated Body corporate s approval of financier s receiver and/or manager Agreements between body corporate and financier prohibited (s.127 BCCMA) Compliance with notice requirements under s.123 BCCMA Impact of financier appointing receiver Review of service contracts Purpose of review Terminology Service contracts entered into after original owner control period Requirement to review Limitation on requests and reviews Procedural steps for review Timing for the review Extension of timeframes Disputes arising out of review (s.133 BCCMA) Other provisions about review (s.135 BCCMA) Required transfer of letting agent s management rights Termination of engagements and authorisations Grounds for termination Termination of contract once engagement expires Requirements for remedial action notice: Specialist adjudication or QCAT jurisdiction (s.149b BCCMA)

11 CHAPTER 6: BODY CORPORATE MEETINGS, PROXIES, VOTING General Matters Use of technology in meetings and the Electronic Transactions (Queensland) Act 2001 Committee Meetings Procedures and powers of committee Conduct of committee meeting Voting at committee meetings Conflict of interest Voting outside committee meetings (VOC) Minutes and other records of committee Giving effect to resolutions of committee meetings Proxies for committee meetings General Meetings Body corporate meetings Notice of general meetings Agenda for general meetings Voting papers Explanatory material accompanying voting paper Time of general meeting Place of general meetings Chairing general meetings Quorum for general meetings Special provisions for first AGM Voting at general meetings Proxies for general meetings Secret Ballots Voting at general meetings - summary of key provisions Counting of votes at general meetings Minuting of voting results CHAPTER 7: BODY CORPORATE PROPERTY MANAGEMENT Introduction Preliminary matters Duties about common property Duties regarding maintenance Utility infrastructure that is common property Conduct of lot owners in relation to common property generally Nuisances Protection of persons dealing with body corporate Body corporate taken to be owner of parcel Tree and fence disputes between a body corporate and its neighbour Mailbox and noticeboard Mailbox requirements Noticeboard requirements Disposal of interest in and leasing or licensing of common property General powers Applicability of s.154 BCCMA and s.161 SM Status of licence agreements and frustration of agreement Lease or licences (with options) vs exclusive use

12 Requirements for actions under s.161(1) SM Impediments to a lease or licence over common property Termination of lease or licence Acquisition of amenities for benefit of owners of lots Resolution requirements for acquisition of body corporate assets Sale/disposal/lease of body corporate asset (freehold land or leasehold interests) Sale/disposal/lease of body corporate asset (personal property) Easements General principle of easements Grant of easement over common property Surrender of easement over common property Requirement for registration of interest in easement Supply of services to lot owners Requirement of lot owner consent Cost recovery for service rendered Distinction between service and asset / common property Body Corporate must not carry on a business Improvements to common property Improvement vs maintenance Improvements to common property by body corporate Approvals by the committee Quotation requirements and committee spending limits Improvements to common property by an owner of a lot Purported undertakings from real estate agents Can an occupier (other than the lot owner) seek approval for an improvement? Improvements to common property by an owner of a lot where exclusive use by-law Authorisation requirements where by-law silent on authorisation Section 164 vs section 174 SM Maintenance obligations for utility infrastructure Air conditioning units Standard format plan external lot maintenance obligations Building format plan maintenance obligations Maintenance responsibilities in layered schemes Where a structure in need of repair extends beyond the boundaries of a lot and onto common property Duties to conduct pest treatment / control Body corporate may carry out work required of owners and occupiers Body corporate may recover reasonable costs and must act reasonably Body corporate may act without adjudicator s order Power to enter lot CHAPTER 8: BODY CORPORATE BY-LAWS General matters Commencement of by-laws Form of by-laws Extent of by-laws By-laws that prohibit vs regulate Schedule 4 default by-laws Exclusive use by-laws Requirements for exclusive use by-law Granting exclusive use

13 Terminating exclusive use Conditions on exclusive use Making and effect of allocations Prohibited matters for exclusive use by-laws Review of exclusive use by-law Limitations for by-laws Unlawful restrictions on residential use, transfers and types of occupiers Discrimination between types of occupiers Unlawful restrictions on imposing monetary liability Prohibition against oppressive or unreasonable by-laws Guide, hearing and assistance dogs Continuing contravention of a by-law When does a continuing contravention apply? Continuing contravention notice Future contravention of a by-law When does a future contravention apply? Future contravention notice Specified Two-Lot Schemes By-law dispute resolution under chapter 6 BCCMA Grounds for contravention action Preliminary procedure for application by body corporate for resolution of dispute Breach of Contravention Notice Potential future directions in by-law enforcement Default By-Laws (Schedule 4 BCCMA) CHAPTER 9: BODY CORPORATE FINANCIAL MANAGEMENT AND DEBT RECOVERY Introduction Administrative and sinking funds The scheme bank account Opening of scheme bank account Closing of scheme bank account Budgets Financial year Disclosure documentation (first year of CTS) Administrative fund budget Sinking fund budget The sinking fund forecast report Required resolution and calculation per CSLE Budgets may be adjusted Contributions General Interim contributions Special contributions Contributions in schemes with a layered arrangement Service of notice of contributions Disputes about contributions Discounts and penalties on contributions Payment and recovery of body corporate debts Debt recovery processes

14 Debt recovery limitation period Potential future directions in debt recovery matters Control of body corporate spending Spending by committee Requirements for emergency expenditure Requirement for quotes Audit Requirement to audit statement of accounts Deciding a motion for audit at the AGM Deciding a motion for audit at the first AGM Deciding a motion for audit at an EGM Appointment of auditor Requirements for auditor Audit of particular period Sample Motions Auditor s certificate CHAPTER 10: BODY CORPORATE INSURANCE General principles Responsibility of original owner Requirement to insure common property and body corporate assets Insurance for scheme under building format plan or volumetric format plan When the body corporate need not insure building(s) Valuation for insurance purposes Insurance valuation report Intervention by the BCCM commissioner Insurance for buildings with common walls standard format plan Mortgagees Premium Approval for cost of premium Lot owner liability for cost of premium Use affecting premium Improvements affecting premium Failure to notify improvements by owner Excess Disclosures relating to insurance Disclosure of insurance details at annual general meeting Disclosure of insurance commissions Insurance for buildings with no common walls - voluntary insurance scheme Establishment of voluntary insurance scheme Requirements for voluntary insurance scheme Opt-in to voluntary insurance scheme Contributions payable for voluntary insurance scheme Obligation of lot owners to insure stand-alone building Combined policy of insurance Voluntary insurance scheme suggested procedure Public risk insurance Use of insurance money not paid under voluntary insurance scheme Use of insurance money paid under voluntary insurance scheme

15 WorkCover insurance requirements for a CTS Definitions Duty to insure Is the Body Corporate engaging an employee or contractor? CHAPTER 11: BODY CORPORATE RECORDS Introduction Notices Notices for roll Address for service Change of address Notice of intention not to proceed to enforce mortgage Body corporate may require information to be given Rolls and registers Roll of lots and entitlements Register of assets Register of engagements and authorisations Register of authorisations affecting the common property Register of allocations under exclusive use by-law Register of reserved issues Documents and information Records and the provision of information Return of records Return of body corporate property Documents in custody of body corporate manager CHAPTER 12: BODY CORPORATE DISPUTE RESOLUTION General Key concepts Key legislation Other resources Introduction Meaning of dispute Purpose of chapter 6 BCCMA Threshold requirements for chapter 6 BCCMA dispute resolution application Exclusivity of dispute resolution provisions Disputes about particular debts Structure of the dispute resolution process Commissioner for body corporate and community management Appointment of the BCCM Commissioner Responsibilities of the Commissioner Protection of the commissioner and dispute resolution officers Delegations by commissioner BCCM Practice directions Dispute resolution officers Appointment of dispute resolution officers Protection of dispute resolution officers Applications generally Who may make a dispute resolution application? Requirement for self-resolution

16 How to make an application Continuation of application if standing of party changes Further information or material for application Rejecting applications and notice requirement Dispute resolution recommendations and application processes Dispute resolution recommendations Restriction on who may conduct further dispute resolution process Dismissing application Preparation for making dispute resolution recommendation or dismissing an application Conciliation applications Referral to department conciliator Department conciliation Dispute Resolution Centre mediation Specialist mediation and conciliation Conduct of specialist mediation and conciliation Specialist mediation or conciliation are voluntary Representation by agent Referral back to the commissioner Referral of application by the commissioner Referral to dispute resolution office in emergency Notice of respondent s written submission to applicant Change or withdrawal of application Inspection of applications and submissions Referral of application for interim order Adjudication generally Application of part 9 to agreement referred for consent order Notice to particular persons Procedural matters about adjudication Adjudicator orders Notice of order to be given Referral back to commissioner Matters on which an adjudicator may make an order Adjudicator powers under schedule 5 BCCMA No-evidence ground Power to make ex parte order Administrator may act for body corporate Interim order in the context of adjudication Order for payment of application fees Order to repair damage or reimburse amount paid for carrying out repairs Order does not prevent proceedings for offence Change of body corporate s financial year Ancillary provisions Capacity of adjudicator to correct an order of statement of reasons and supplementary orders Limitation on powers of adjudicator Enforcement of adjudicator orders (Magistrates Court) Schedule 5 BCCMA - adjudicator s orders Specialist adjudication Specialist adjudication by agreement Enforcement of adjudicator s orders

17 Enforcement of orders for payment of amount Enforcement of other orders Failure to comply with adjudicator s orders Appeal from an order of adjudicator on question of law Right to appeal to appeal Tribunal General principles in reviewing decisions Appeal procedure Referral back to commissioner Jurisdiction and powers of appeal tribunal on appeal Miscellaneous matters Stay of application and proceeding Other Matters CHAPTER 13: SPECIFIED TWO LOT SCHEME Introduction S2LSM and associated BCCMA provisions Other BCCMA provisions relating to S2LSM CHAPTER 14: ANNEXURES TABLES Comparative table of regulation module provisions Standard module regulation renumbered provisions (SM 1997 vs SM 2008) Table of general abbreviations Table of legislative abbreviations FORMS BCCM PRACTICE DIRECTIONS INDEX Table of statute Table of cases

18 Sample extract text (Chapter 6 - Body Corporate Meetings, Proxies, Voting)

19 462 BODY CORPORATE LAW IN QLD General Meetings Body corporate meetings The BCCMA provides the empowering provision for the conduct of meetings for community titles schemes, outlining that a scheme may: (a) hold meetings of the types, and for the purposes, prescribed under the regulation module applying to the scheme; 163 and (b) conduct the meetings: (i) in the way prescribed under the regulation module; and (ii) to the extent the regulation module does not prescribe the way to conduct meetings in the way decided by the body corporate. 164 Where a lot is a community titles scheme (a subsidiary scheme) within another scheme (Scheme A), the regulation modules include provisions about the representation of the body corporate in Scheme A. 165 Types of general meetings All meetings of the body corporate are general meetings. 166 General meetings are distinct from committee meetings under s.44 SM or voting outside of formal committee meetings under s.54 SM. A general meeting is either an annual general meeting (AGM) or an extraordinary general meeting (EGM). 167 Who may call general meetings A general meeting may be called by a member of the committee, including a non-voting member of the committee 168, if the member is authorised by a resolution of the committee to call the particular meeting s.104(1)(a)-(b) BCCMA. Note the process under s.111 SM which allows a body corporate to decide motions that have effect as resolutions without dissent, special resolutions or ordinary resolutions as may be required for the motion, even though the motion is not placed before and decided at a general meeting of the body corporate. 164 s.104(2) BCCMA. 165 s.85 SM. 166 s.64(1) SM. 167 s.64(2) SM. 168 See s.12(1) SM in relation to non-voting committee members. 169 s.65(1) SM

20 463 BODY CORPORATE LAW IN QLD A general meeting may also be called by a person authorised or required to call a general meeting by an order of an adjudicator acting under the dispute resolution provisions. 170 Where a meeting is called by a person other than the secretary, the person who calls the meeting must perform all the functions of the secretary for the meeting and the secretary must provide to the person the records or other documents of the body corporate reasonably required to enable the person to perform the functions. 171 Section 65 SM does not apply to a requested extraordinary general meeting. 172 The requirement for a member of the committee to call a general meeting was considered in the case of Rode Court. 173 That case concerned a six lot scheme where the engagement of a body corporate manager had expired and no committee was appointed. Additionally, it was noted by the adjudicator that, even if the body corporate manager had been appointed, there did not appear to be an engagement to act under Chapter 3 Part 5 SM (engagement of the body corporate manager to carry out the functions of the committee and executive members). In concluding that the body corporate had not validly called an AGM on account of the absence of a committee (and therefore, an appropriate committee resolution for the calling of an AGM), or valid engagement of a body corporate manager, the adjudicator ordered the appointment of an administrator to call an AGM to put the body corporate on a proper legal basis. When annual general meetings must be called An annual general meeting (other than the first annual general meeting) must be called and held within 3 months after the end of each of the community titles scheme s financial year. 174 Adjudicators have the power under s.276(3) BCCMA 175 to make an order requiring the body corporate to call a general meeting of its members to deal with stated business or to change the date of an annual general meeting. An overview of the case law reveals that adjudication decisions on extension of timeframes in which to hold an AGM are, on the merits of the case, generally granted with an additional 2-3 months in which to comply. In making orders that are just and equitable, under s.276(1) BCCMA, an adjudicator has the power to retrospectively order than an AGM was deemed to have been validly passed, despite a degree of noncompliance with the statutory requirements s.65(2) SM. 171 ss.97(2) and (3) SM. 172 s.65(3) SM. Refer to ss SM in relation to requested extraordinary general meetings. 173 [2010] QBCCMCmr s.66 SM. See also division 2 (ss SM) for requirements for special provisions concerning first annual general meetings. The financial year of a scheme is defined in Schedule 6 Dictionary BCCMA. 175 Schedule 5, Item 6 BCCMA. 176 See for example, Tucanae Lodge [2015] QBCCMCmr

21 464 BODY CORPORATE LAW IN QLD It was held in the case of McCaul Court 177 that time limits are placed on the period within which an AGM is required to be held to provide accountability and accessibility to information regarding the operation of the scheme. It was held that a meeting held outside of the 3 month statutory timeframe will prima facie be invalid without the authorisation of an adjudicator. In cases where there are insurmountable defects in the meeting process, such as, for example the adoption of budgets, issuing of levies and validity of the committee, it will be necessary to obtain an order of an adjudicator for the appointment of an administrator to call a new AGM with a view to placing the body corporate on a legal footing. The position in McCaul Court was similarly adopted in Grantham Lodge 178 and 37 Hugh Street 179 which held that, if an AGM has not been held in accordance with s.66 SM, then the body corporate is currently not operating on a proper legal basis. In contrast, the interim adjudication decision of Lido Place 180 adopted a more liberal approach to the statutory timeframe for the holding of an AGM, stating: Section 66 of the Standard Module provides that an AGM must be called and held within three months after the end of each of the scheme s financial years. Obviously it is preferable that an AGM be held within the prescribed timeframe, and a body corporate should make every effort to ensure that this timeframe is complied with. However, the courts have recognised that the very detailed provisions of the regulations make it almost inevitable that from time to time there will be non-compliance with the legislation. In particular the courts have commented that non-compliance of an insubstantial nature should not be allowed to imperil the actions of bodies corporate or their committees, particularly in the instance of committees where actions are taken in good faith. Accordingly, I am not satisfied that this issue in and of itself is a serious legal issue which warrants the making of an interim order. In the case of Rydal Mount Court, 181 the body corporate applied for an extension in which to hold the AGM in order to seek nominations for positions on the committee and to allow for the submission of motions for inclusion on the agenda. The adjudicator noted that it was no longer possible for the body corporate to hold its AGM by the required deadline of 30 September, and accordingly provided the body corporate with an extension to 20 December in which to seek committee nominations. 177 [2010] QBCCMCmr [2010] QBCCMCmr [2010] QBCCMCmr [2010] QBCCMCmr 132. The same position was upheld upon final orders, however the adjudicator did not provide further information in relation to the seriousness of the delay in that case. 181 [2009] QBCCMCmr

22 465 BODY CORPORATE LAW IN QLD The adjudicator in the case of Bondel 182 allowed a 2 month extension on account of the majority of lot owners not being able to meet within the statutory timeframe. The adjudicator further outlined that, if the statutory timeframe for holding an AGM is likely to be continually problematic for the majority of lot owners to attend, it was open for the body corporate to lodge a further application (pursuant to s.283 BCCMA) for an adjudicator to change the end of financial year for the scheme to a new date to enable future AGMs to be held at a more convenient time. Requested extraordinary general meeting Requirements to call requested EGM An extraordinary general meeting (requested EGM) must be called if a notice (the original request) 183 asking for an extraordinary general meeting to consider and decide motions proposed in the notice is: (a) signed by or for the owners of at least 25% of all the lots included in the community titles scheme; and (b) given to the secretary or, in the secretary s absence, the chairperson or, if the committee has not yet been chosen, given to the original owner. 184 The secretary may be presumed to be absent if a notice is given to the secretary at the address for service of the body corporate, and no reply is received within 7 days. 185 Timeframe for requested EGM The SM provides strict timeframes for the valid calling of a requested EGM. The secretary, chairperson or original owner (as the case may be), must do the following after being provided with a notice requesting the EGM: 186 (a) call a requested EGM within 14 days; and then, (b) hold the EGM within 6 weeks. In relation to the strictness of the timeframes in which to call a requested EGM, the case of Zenith 187 outlined that a body corporate has no discretion under s.67 SM to postpone or not call a requested EGM. It was held that the mandatory requirements must be adhered to and that, in the case of Zenith, it was unreasonable for the body corporate to postpone the requested EGM in order to prepare documentation for other motions they wished to put forward. 182 [2009] QBCCMCmr See s.68(1) SM. 184 ss.67(1)(a) and (b) SM. 185 s.67(2) SM. 186 ss.67(3)(a) and (b) SM. 187 QBCCMCmr

23 466 BODY CORPORATE LAW IN QLD The adjudicator stated that any additional motions that could not be accommodated within the requested EGM would need to be the subject of a further EGM. 188 Inclusion of motions In relation to whether additional motions can be added to the agenda of a requested EGM, it was held in Warrego Lodge 189 that there is nothing in s.67 SM which precludes the inclusion of additional motions on the agenda of a requisitioned EGM, however, further investigation, pending a final order was needed in that case to determine whether any additional motions were validly included on the EGM agenda. Requested EGM prior to first AGM A requested extraordinary general meeting of the body corporate may be called even though the body corporate s first annual general meeting has not yet been held. 190 Non-compliance with timeframe for requested EGM Where the timeframe for calling a requested EGM is not complied with, the owners of lots by or for whom the original request was signed may, in writing, ask a committee member, other than the committee member to whom the original request was given, to call the meeting. 191 The committee member who receives the subsequent request for an EGM, must then call the meeting within 14 days of that further written request. 192 Where the requested EGM is not called by the secretary, the person who calls the meeting must perform all the functions of the secretary for the meeting and the secretary must provide to the person the records or other documents of the body corporate reasonably required to enable the person to perform the functions. 193 Opportunity to submit agenda motions at general meetings A motion for consideration at a general meeting of the body corporate may be submitted at any time by: 194 (a) a member of the body corporate; or (b) the committee. 188 The case of Adams [2010] QBCCMCmr 89 similarly stressed the mandatory requirements to call a requested EGM. 189 [2011] QBCCMCmr s.67(4) SM. 191 s.68(2) SM. 192 s.68(3) SM. 193 ss.97(2) and (3) SM. 194 s.69(1) SM

24 467 BODY CORPORATE LAW IN QLD When, pursuant to s.16 SM, a notice is forwarded to members of the body corporate inviting nominations for committee member positions to be filled at an annual general meeting of the body corporate, the members must also be invited to submit motions for inclusion on the agenda for the meeting. 195 A motion submitted in response to an invitation to submit motions must, subject to the requirements of ss.69(3) and (4) SM, be included on the next general meeting agenda on which it is practicable to include the motion. 196 For a motion to be properly included in the next general meeting agenda, it must be received by the body corporate secretary before the end of the body corporate s financial year immediately preceding the meeting. 197 It cannot be a motion of the following type, if such a motion would result in the body corporate considering a motion of that type more than once in the body corporate s financial year: 198 (a) a motion proposing that a regulation module be applied to the community titles scheme that is different from the regulation module identified in the scheme s CMS; (b) a motion proposing that the remuneration paid to a particular service contractor be changed; (c) a motion proposing that the engagement of a person as a service contractor, or the authorisation of a person as a letting agent, be amended if, as a result of the amendment, the engagement or authorisation would include a right or option of extension or renewal. It has been held that there are no grounds upon which it would be inconvenient to include a validly submitted motion on the agenda of the next general meeting. In the case of Sandown, 199 the adjudicator rejected the body corporate s argument that, as they had already set the agenda for the forthcoming EGM, it was not practicable for the validly submitted motions to be included on that meeting s agenda. Notice of nomination for corporate owner The notice of nomination must: 200 (a) be given: (i) under the seal of the nominating entity or in another way permitted under s.127 Corporations Act; or 195 ss.16 and 69(5) SM. Note that the notice must be given to lot owners between 3 and 6 weeks before the end of the body corporate s financial year (s.16(3) SM). 196 s.69(2) SM. 197 s.69(3) SM. 198 s.69(4) SM. 199 [2008] QBCCMCmr s.83(6) SM

25 468 BODY CORPORATE LAW IN QLD (ii) by a person acting under the authority of a power of attorney from the nominating entity, a copy of whose power of attorney is also given to the secretary; and (b) advise the residential or business address, and address for service (if different from the residential or business address), of each nominee. A nominating entity may change a nomination by giving the secretary written notice of a new nomination pursuant to a new notice of nomination, stating the name and address of the new nominee or the new alternative nominees. 201 Notice of general meetings Written notice of a general meeting must be given to the owner of each lot included in the community titles scheme, and if not given personally, must be sent (by post) to the owner at the owner s address for service. 202 The notice must contain the following: 203 (a) details of the time and place of the proposed meeting; (b) an agenda for the meeting; (c) a proxy form; (d) a form under which a corporate owner may advise the body corporate of the corporate owner's nominee; (e) a voting paper for all open motions to be decided at the meeting 204 ; (f) where the motion is to be decided by secret ballot: (i) a secret voting paper as required under s.71 SM; (ii) an envelope marked secret voting paper ; (iii) either a separate particulars envelope or a particulars tab forming part of the secret voting paper envelope that a person may detach without unsealing or otherwise opening the envelope; 201 s.83(7) SM. 202 s.70(1) SM. Note also that the Dictionary (Schedule) SM provide that the address for service of a person in relation to a community titles scheme, means the person s address for service as most recently advised to the body corporate. 203 ss.70(2) and (3) SM. See also BCCM Form 4 (Notice of annual general meeting of the body corporate) and BCCM Form 5 (Notice of extraordinary general meeting of the body corporate). 204 See s.71 SM for voting paper requirements

26 469 BODY CORPORATE LAW IN QLD (g) explanatory material required under s.73 SM; (h) any other document as required under the BCCMA or SM. 205 Where all the lots have identical ownership, a notice of a general meeting need not be given. 206 In Body Corporate for Palm Springs Residences v. J Patterson Holdings Pty Ltd, 207 McGill DCJ elaborated on the detail required to be given in a general meeting notice, stating: 208 There is certainly an obligation to give proper notice of what is actually to be considered by the meeting, and to point out the relevant consequences of the approval of the resolution. If there is a failure to give proper notice of the meeting, which may occur if the notice of the proposed resolution is misleading as to what is really proposed, or its effect and implications, then that may well impact on the validity of the resolution, because in such circumstances there was either no valid notice of the meeting or no valid notice of the proposed resolution. However, it was noted in the case of Fraser v NRMA Holdings Ltd 209 that: 210 The need to make full and fair disclosure must be tempered by the need to present a document that is intelligible to reasonable members of the class to whom it is directed, and is likely to assist rather than to confuse. In the circumstances the court should not be quick to conclude that a contravention has occurred because other information could have been provided that was not. The need for the applicants to establish the materiality of errors and omissions is an important step in the proof of their claims. 205 s.70(3) SM provides examples of the types of documents that are required to be included in the general meeting notice under the SM, namely: s.21 (Conduct of elections for committee by secret ballot); s.22 (Conduct of elections for committee by open ballot); s.139 (Budgets); s.152 (Quotes for major spending decided at general meeting); s.154 (Accounts); s.155 (Audit); s.177 (Disclosure of insurance details at annual general meeting); and s.201 (Register of reserved issues). 206 s.70(4) SM. Example, during the original owner control period where the body corporate is constituted solely by the original owner (typically, the property developer for the scheme) (per definition in Schedule 6, Dictionary BCCMA). 207 [2008] QDC Ibid. at [50]. Affirmed in the recent case of McWhirters Apartments [2017] QBCCMCmr 169 at [60]. 209 (1995) 55 FCR (1995) 55 FCR 452 cited in Body Corporate for Palm Springs Residences v J Patterson Holdings Pty Ltd [2008] QDC 300 at [50], [61] and [62]

27 Sample extract Flowcharts

28 BODY CORPORATE LAW IN QLD- PRACTICE AND PROCEDURE Flowcharts list Flowchart No. 1.1: Timeline of BC legislation developments Flowchart No. 2.1: Constitution of Community Titles Scheme Flowchart No. 2.2: Timeline for first AGM applicable to original owner Flowchart No. 2.3: CTS Stakeholders Flowchart No. 2.4: CMS Notation Flowchart No. 2.5: Requirements to give copy of new CMS Flowchart No. 2.6: Consent to record new CMS Flowchart No. 2.7: Sustainable Planning Act development application processes Flowchart No. 2.8: Request to apply superseded planning scheme Flowchart No. 2.9: Compensation timeframe for adverse planning change Flowchart No. 2.10: Planning Act development application processes Flowchart No. 2.11: Establishment of body corporate post development application process Flowchart No. 4.1: The body corporate committee Flowchart No. 4.2: Eligibility to be committee voting member Flowchart No. 4.3: Choosing committee for 2 and 3 lot scheme - When one individual owns all lots in scheme Flowchart No. 4.4: Committee Election scenarios Flowchart No. 4.5: Committee Election procedure Flowchart No. 4.6: Committee nomination timeframe Flowchart No. 4.7: Achieving minimum number of committee members Flowchart No. 4.8: Conduct of Committee Elections Flowchart No. 4.9: Choosing Committee Members at EGM Flowchart No. 4.10: Breach of code of conduct and removal of committee member Flowchart No. 4.11: Filling casual vacancies Flowchart No. 4.12: Restricted issues for committee Flowchart No. 5.1: Term of engagement and authorisation Flowchart No. 5.2: Service contractors (including body corporate manager) Flowchart No. 5.3: Engagement of body corporate manager under chapter 3 part 5 Flowchart No. 5.4: Reporting to body corporate under chapter 3 part 5 engagement Flowchart No. 5.5: Transferring engagements of service contractors and authorisations of letting agents Flowchart No. 5.6: Calculation of transfer fee Flowchart No. 5.7: Transferring of management rights (technical requirements Flowchart No. 5.8: Transferring of management rights (sequence of events) Flowchart No. 5.9: Limitation on termination of financed contract Flowchart No. 5.10: Review of service contracts Flowchart No. 5.11: Required transfer of letting agent s management rights Flowchart No. 5.12: Termination of engagement and authorisation of body corporate manager or service contractor Flowchart No. 6.1: Committee meetings Flowchart No. 6.2: Committee proxies Flowchart No. 6.3: General meeting timeline

29 Flowchart No. 6.4: Flowchart No. 6.5: Flowchart No. 6.6: Flowchart No. 6.7: Flowchart No. 6.8: Flowchart No. 6.9: Flowchart No. 6.10: Flowchart No. 6.11: Flowchart No. 6.12: Flowchart No. 7.1: Flowchart No. 7.2: Flowchart No. 7.3: Flowchart No. 7.4: Flowchart No. 7.5: Flowchart No. 7.6: Flowchart No. 7.7: Flowchart No. 7.8: Flowchart No. 7.9: Flowchart No. 8.1: Flowchart No. 8.2: Flowchart No. 8.3: Flowchart No. 9.1: Flowchart No. 9.2: Flowchart No. 9.3: Flowchart No. 9.4: Flowchart No. 9.5: Flowchart No. 9.6: Flowchart No. 9.7: Flowchart No. 9.8: Flowchart No. 9.9: Flowchart No. 9.10: Flowchart No. 9.11: Flowchart No. 9.12: Flowchart No. 10.1: Flowchart No Flowchart No Flowchart No. 11.1: Flowchart No. 12.1: Flowchart No. 12.2: Flowchart No. 12.3: Flowchart No. 12.4: Body corporate meetings Chairing general meeting Voting at general meetings Representative of subsidiary scheme Proxies at general meetings Secret ballot process conducted by returning officer Voting methods Requirements to pass a special resolution Poll voting requirements Rights and responsibilities over common property Creating common property Leasing/licensing/disposing of common property Acquiring and disposing body corporate assets Common property easements Supply of services to lot owners by body corporate Improvement to common property Approval requirements for common property improvements Common property with grant of exclusive use By-law requirements (other than for exclusive use by-law) Exclusive use by-laws By-law contravention Budgets Determining financial year start date for CTS Administrative Fund and Sinking Fund Adjusting proposed budgets at AGM Rationale for interim contributions Relationship between budgets, contributions and debt recovery processes Contributions Debt recovery Control of spending Spending Quote request and Work Order processes Auditing Disclosing insurance details at an AGM Use of insurance money not paid under voluntary insurance scheme Insurance Access to body corporate records and request for information Conciliation Adjudication time limit Applying for an interim order Adjudication

30 Flowchart No. 6.3: General meeting timeline s. 66 SM AGM must be called and held within 3 mths of scheme s EFY s. 74 SM AGM must be held at least 21 days after notice is given to lot owners s. 96(2) SM Full and accurate minutes given to lot owners within 21 days after meeting s. 74 SM EGM must be held at least 21 days after notice is given to lot owners Within 3 mths 6 weeks before EFY 3 weeks before EFY EFY for scheme Deadline for AGM Within 21 days Within 21 days of AGM Within 21 days of EGM Within 21 days Within 21 days of EGM 1 st mth 2 nd mth 3 rd mth 4 th mth 5 th mth 6 th mth Rest of the scheme financial year (from the 7 th to 12 th mth) 3 to 6 weeks before scheme EFY s. 16(2) SM Secretary issues notice inviting committee member nominations and submission of AGM motion(s) Within 1 mth s. 154 SM Preparation of financial statements for scheme and audit (if required- s. 151 SM) s. 139 SM BC committee approves the administrative fund and sinking fund budgets (typically at the budget committee meeting) Within 1 mth from AGM Within 2 mths from AGM s. 30(1) SM EGM must be called by the appointed committee member(s) where insufficient executive members appointed or less than 3 members appointed s. 30(2) SM EGM must be held within 2 mths of the AGM to appoint the required committee members s. 65 SM Committee may resolve to call EGM EGM Held ss. 67, 68 SM -Requested EGM s. 67(3)(b) - Must be held within 6 weeks after notice given s. 67 SM- Original request 7 days 14 days s. 68 SM Further request s. 74 SM Notice period 14 days 14 days 21 days If Secretary absent Notice given to chairperson to call requested EGM ss. 67(2),(3)(a) SM Requested EGM must be called within 14 days after notice given Requested EGM held s. 67(1) SM Requested EGM by lot owners - To consider/decide lot owner motion - Notice is signed by/for owners of at least 25% of lots in CTS - Given to the secretary (or chairperson in secretary s absence or original owner if no committee chosen) ss. 68(1),(3) SM If the secretary or chairperson fails to call a meeting under s. 67 SM the request for EGM may be given to another committee member to call the meeting with 14 days AGM: Annual General Meeting CM: Committee Meeting CMS: Community Management Statement CTS: Community Title Scheme EFY: End of Financial Year EGM: Extraordinary General Meeting GM: General meeting Mth(s): month(s) s. : section SM: ss. 16(2), 30(1),30(2), 65, 66, 67, 67(1), 67(2), 67(3)(a)-(b), 68, 74, 96(2), 139, 154 s. 67(2) SM Secretary presumed to be absent if notice given to secretary at address for service and no reply received within 7 days s. 67(3)(a) SM Requested EGM must be called within 14 days after notice given If Secretary not absent to call requested EGM s. 74 SM Requested EGM must be held at least 21 days after notice is given to lot owners

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