Lee Parker Pty Ltd v. Young
[2007] QDC 6
•31 January 2007
DISTRICT COURT OF QUEENSLAND
CITATION:
Lee Parker Pty Ltd v Young [2007] QDC 006
PARTIES:
LEE PARKER PTY LTD
Appellant
V
KATHLEEN CLAIR YOUNG
Respondent
FILE NO/S:
103/2006
DIVISION:
Civil
PROCEEDING:
Appeal
ORIGINATING COURT:
District Court, Southport
DELIVERED ON:
31 January 2007
DELIVERED AT:
Brisbane
HEARING DATE:
25 January 2007
JUDGE:
Kingham DCJ
ORDERS:
Appeal allowed; 1.
The decision of the Office of the Commissioner for Body Corporate and Community Management dated 20 January 2006 is set aside; 2.
Margaret Howard, Ron Merrick, Rachel Sparks and Bettina Salada are declared to be members of the committee of the body corporate of Aarons CTS 11476;3.
The transcript of this order is to be provided to the parties and to the Office of the Commissioner for Body Corporate and Community Management. 4.
CATCHWORDS:
COMMUNITY TITLE SCHEMES – Dispute about selection of Body Corporate Committee Members –Whether the Adjudicator erred in law in the orders made – Where Adjudicator gave adequate reasons for his decision – Where Adjudicator erred in his interpretation of s14(2) of Body Corporate and Community Management (Accommodation Module) Regulation 1997 – Failure to identify purpose for which explanatory notes considered – Failure to consider all relevant passages of explanatory notes – Owners of multiple lot entitled to nominate one eligible individual for each lot held – Where Adjudicators’ orders set aside and substituted by another order.
Acts Interpretation Act 1957
Body Corporate and Community Management Act 1997
Body Corporate and Community Management (Accommodation Module) Regulation 1997
Explanatory Notes for SL 2003 No. 263
Cypressvale Pty Ltd v Retail Shop Lease Tribunal [1996] 2 Qd R 462 – cited
COUNSEL:
Mr W. Cochrane for the Appellant
No appearance by the Respondent
SOLICITORS:
Hynes Lawyers for the Appellant
HER HONOUR: As I indicated I would try to give these reasons quickly, I am reading them into the record.
Ms Young was the co-owner of a lot in a community titles scheme, Aarons, and as such a member of the Body Corporate for Aarons. Lee Parker Pty Ltd is the holder of a number of lots in Aarons.
There is a longstanding dispute between them about the management of the affairs of Aarons through its committee and in particular, the composition of its committee.
Ms Young made two dispute resolution applications to the Commissioner for Body Corporate and Community Management, the second of which resulted in the orders made by an Adjudicator to whom the Commissioner referred the dispute. The orders declared invalid and ineffectual the election of persons nominated by Lee Parker to the committee for Aarons and declared other persons to be the members.
Lee Parker appealed the orders asserting errors of law by the Adjudicator. In essence, those errors relate to the adequacy of the Adjudicator's reasons and his interpretation of the regulation which governs the management of this type of body corporate. Ms Young has since sold her interest in the scheme.
The questions which must be determined are:
Whether the Adjudicator erred in failing to give any or adequate reasons for his decision.
Whether the Adjudicator erred in his interpretation of the relevant provisions of the regulation; and
If he erred in either respect, whether the matter should be referred back to the Adjudicator or whether his order should be set aside and substituted by an order of this Court.
As to the adequacy of the Adjudicator's reasons, counsel for Lee Parker asserted the Adjudicator gave no or inadequate reasons to support a number of the findings upon which the Adjudicator's orders were based. They related to the accuracy of the Body Corporate's submissions, whether steps taken to convene meetings and the outcomes of those meetings were valid, the legitimacy of Lee Parker's actions in nominating and voting for certain candidates; and the proper composition of the committee of the body corporate.
In essence, Lee Parker's complaint is that the Adjudicator's reasons do not disclose either the factual basis for or the reasoning which supported the various findings and orders complained of.
An Adjudicator is required to act quickly and with as little formality and technicality as is consistent with a fair and proper consideration of the application at Section 269(2)(b) of the Body Corporate and Community Management Act 1997.
"A minimum of formality and technicality in a process must be balanced by fair and proper consideration of an application and must be read in conjunction with the Adjudicator's obligation to give reasons for orders made" (Section 274(2)(a)).
However, the reasons need not descend to a degree of particularity or sophistication that would be expected in a judicial proceeding (Cypressvale Pty Ltd. v. Retail Shop Lease Tribunal at 485). What is necessary is that the reasons provide an explanation for the orders made.
It is true that some of the Adjudicator's findings were not clearly expressed or adequately explained. For example, his assessment of the body corporate's submissions, his finding as to the Chairperson's non-compliance with requirements for convening an extraordinary general meeting and his conclusion that meetings held on the 20th May 2005 and the 24th June 2005 are out of order and invalid.
With respect to that last of the findings, it should be noted that this was made in his earlier order which was not the subject of this appeal and appears to be of no relevance to these proceedings.
Returning to the other findings, when the reasons as a whole are assessed in the context of the Adjudicator's functions and statutory obligations, I am satisfied that he adequately explained the basis upon which he made his orders. On a fair reading of his reasons, it is clear enough that he based his orders on his finding that the nominations by Lee Parker of candidates for the committee were invalid. Likewise it is clear enough that this finding of invalidity was based on his interpretation of the Regulation which governs the nomination of committee members. Whether that interpretation and the finding based upon it is correct is a different question and one to which I will now turn.
The Regulation which governs this body corporate is the Body Corporate and Community Management Accommodation Module Regulation 1997. Section 14 provides the procedure for and entitlements of members regarding nomination of candidates for election to the committee of a body corporate. The Adjudicator took the view that a member can only nominate one individual for election regardless of how many lots the member holds in the community titles scheme, unless insufficient nominations are received to fulfil the statutory requirement for the number of committee members.
There are two questions raised by Lee Parker about the Adjudicator's decision. Firstly, whether he adopted the proper process in interpreting the Regulation, in particular the reliance he placed on a passage from the explanatory notes to 2003 amendments to that Regulation, and, secondly, whether he reached the proper conclusion as to the meaning of the relevant provision, in particular whether a multiple lot owner is confined to only one nomination regardless of the number of lots held.
As to the Adjudicator's process, counsel argued that, in reaching his view, the Adjudicator wrongly relied on a passage in the explanatory notes to the 2003 amendments to Section 14 without attempting to interpret the provision itself.
This submission has some force. In interpreting a provision of the Regulation, a decision maker may consider it extrinsic material such as explanatory notes, provided this is done in specified circumstances and for limited purposes. Those circumstances and purposes are:
· if the provision is ambiguous or obscure - for the purpose of providing an interpretation;
· if the ordinary meaning leads to a manifestly absurd or unreasonable result - for the purpose of providing an interpretation that avoids that result; or
· Otherwise, for the purpose of confirming the interpretation conveyed by the ordinary meaning of the words.
Further, in deciding whether to consider extrinsic material, the decision maker must have regard to the desirability of the provision being interpreted as having its ordinary meaning - Section 7 and 14B of Acts Interpretation Act 1957.
In no circumstances can the explanatory notes be considered instead of interpreting the provision itself. This is what counsel contends the Adjudicator did. In his reasons, the Adjudicator did not specifically rely on any particular provision of the Regulation. Rather, he repeated some three pages from his reasons from earlier order involving Aarons. In turn, those reasons cited a passage from the explanatory notes and annexed a letter, apparently addressed to another member of Aarons. The Adjudicator did not directly address the terms of Section 14 in any of that material.
The annexed letter did make an indirect reference to Section 14. It cited extracts from two other apparently unrelated orders which, said the Adjudicator, interpreted the equivalent provision of the Standard Module Regulation. However there is no indication in the Adjudicator's reasons, either for the first or the second order, that he considered the provision itself or its application to the matter before him. Nor is there any statement as to the circumstances in which and the purpose for which he considered the explanatory notes.
I am persuaded by the terms of the reasons themselves that the Adjudicator erred in placing reliance on the extracted portion of the explanatory notes without first considering Section 14 and then addressing whether consideration should be given to the explanatory notes and for what purpose.
As to the proper interpretation of Section 14, counsel submitted that this was that the right of nomination attaches to each lot and that an owner of a multiple lot should receive a notice inviting nomination for each lot held.
Section 14 subsection (2) requires the secretary to serve a notice on each lot owner shown on the body corporate roll inviting them to nominate one person who fulfils the eligibility requirements for membership of the committee.
The secretary must serve a notice on each lot owner shown on the body corporate's roll, inviting each lot owner -
(a) if the lot owner is an individual - to nominate -
(i) the lot owner; or
(ii) another individual who is a lot owner or who
may be nominated by the lot owner in
accordance with section 11(1)(b)(i); or
(b) if the lot owner is not an individual - to
nominate an individual who is a lot owner or who
may be nominated by the lot owner in accordance
with section 11(1)(b)(ii) or (iii).
The use of the descriptor "each lot owner" is specific. It refers not to the identity of an owner but to its relationship to each lot. A notice must be served on the owner shown on the roll in respect of each lot, not on each individual or corporation that owns one or more lots. To mean the latter, a proper description would be "each owner of one or more lots."
As the notice for each lot invites one nomination it follows that, for each lot held, the owner has a right to nominate one person. That is, in my view, the ordinary meaning of the words of the section.
If I am wrong in that conclusion and the provision is ambiguous or obscure, a proper reading of the explanatory notes to the 2003 amendment supports the interpretation contended for.
It appears the Adjudicator failed to consider all relevant passages of the explanatory notes. The passage here relied upon appears at page 6 of the explanatory notes. It refers in general terms to the amendments and does not specify to which sections the statement related. The passage states relevantly:
"An owner can nominate only one person for committee membership. This is to limit stacking of committees."
From this general statement, the Adjudicator has, apparently, concluded that the mischief that the amendment sought to address was a single owner of multiple lots nominating more than one individual for the committee.
A proper reading of the explanatory notes demonstrates this was not the mischief to which the amendments were said to be directed. The concern stated in the explanatory notes was that persons were being nominated and elected to committees who were not acting in the interests of owners and that owners could make multiple nominations.
To remedy this, amendments were made to the provisions dealing with eligibility for committee membership - section 11, and nominations to the committee - section 14.
The amendments to section 11 inserted requirements for eligibility for nomination. The explanatory notes to those amendments state, at pages 21 to 22:
"This amendment deals with concerns raised by stakeholders of committee's being stacked. The effect of the amendment is that a committee will be more representative of the lot owners as it will consist only of persons who are lot owners or persons with a connection to lot owners such as a family member (eg mother, father, brother or sister), a director or secretary of a corporate owner or a person appointed under a power of attorney to act for a lot owner. These amendments place significant restrictions on the persons that can be committee members."
Section 14 was amended so that body corporate members could only nominate those who fulfilled the eligibility requirements set out in section 11, and an owner of each lot could make only one nomination.
Explanatory notes to amendments to section 14 at page 23:
"This clause provides, in section 14(2), that a lot owner may, in response to a notice inviting nominations for election of the committee, nominate only one individual. If the owner is a corporation, the owner may nominate one individual who is a director, secretary or other nominee of the corporation. This amendment, and the amendment in clause 10, limits the possibility of the committee being stacked by owners nominating multiple other people for election to the committee."
It is worth noting that the reference to "owners nominating multiple other people for election" is general. That is, the section as it then stood allowed an owner of a single lot to make more than one nomination. It is clear that the amendments were intended to prevent multiple nominations in relation to each lot but not that it was intended to restrict the nomination entitlements of the owner of more than one lot.
My reading of those notes is reinforced by the terms of section 14 prior to the amendment. As it then stood, section 14 required the secretary to invite each lot owner to nominate an individual. The invitation to nominate, both before and after amendment, is to each lot owner. The relevant change of wording is from "an individual" to "one individual". That makes explicit the limit of one nomination for each lot as the use of the singular "an individual" includes the plural - section 32 Acts Interpretation Act.
Had it been intended also, to restrict the rights attaching to a lot because the owner holds another lot, that could easily have been stated. This is a significant restriction on the entitlements flowing from ownership, and it could be expected that such an amendment would be clear.
It follows from what I have said that if it was proper for the Adjudicator to consider the explanatory notes, I find he erred in failing to take into account all relevant passages of those notes and, in particular, those specifically pertaining to section 14.
Further, I find the Adjudicator has erred in his interpretation of section 14 of the Regulation.
In deciding this appeal the Court has a power to confirm or amend the order appealed, set it aside and substitute a different order or refer the order back to the Adjudicator with appropriate direction, having regard to the question of law raised by the appeal - section 294. Counsel for Lee Parker submitted the appropriate relief in the circumstances of this case is to set aside the Adjudicator's order and substitute it with the orders sought in the notice of appeal.
Ms Young has sold her unit, no longer has any interest in the appeal and did not appear at the hearing; nor did any other lot owner. As there no longer appears to be any person with an interest in maintaining the Adjudicator's orders it would artificially maintain the dispute were the order referred back to the Adjudicator with directions.
There was no contest before me, nor apparently, before the Adjudicator, that individuals nominated by Lee Parker and elected at the extraordinary general meeting of Aarons held on 18 August 2005 met the eligibility requirements.
There is no evidence before me and nothing in the Adjudicator's reasons that persuades me that either the nomination or the election of those nominated by Lee Parker was invalid and of no effect.
Accordingly, I will make orders in terms of paragraphs 1 to 3 of the notice of appeal. Because of Ms Young's early notice to Lee Parker that she had no interest in pursuing the matter I will not make any order as to costs.
The orders are:
1. Appeal allowed;
2.The decision of the Office of the Commissioner for Body Corporate and Community Management dated 20 January 2006 is set aside;
3.Margaret Howard, Ron Merrick, Rachel Sparks and Bettina Salada are declared to be members of the committee of the body corporate of Aarons CTS 11476.
Those are my orders.
I will order that the transcript be provided to the parties and I presume also to the Office of the Commissioner.
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