A recent adjudicator’s order has wide-ranging implications for body corporate managers who have been engaged to take on some or all of the functions of the body corporate secretary.
In Whitsunday Waters Resort [2020] QBCCMCmr 84, the adjudicator invalidated certain votes, and consequently the passing of a motion, because the voting papers were submitted to the body corporate manager (to whom various functions of the secretary had been delegated) instead of the secretary committee member.
The reason given for this order is that the regulation module specifically requires written votes to be submitted to the secretary, and being the secretary is not a power that can be delegated to the body corporate manager.
The duties of secretaries and body corporate managers
The implications of this decision are far-reaching given the complex and time-consuming duties involved in being a secretary and the common practice of those the roles being outsourced to a body corporate manager.
The role of the secretary includes or collecting committee nominations, maintaining certain records, giving and receiving notices, accepting motions for submission, having material available at general meeting and other duties.
However, the reality is that most secretaries do not have the time or inclination to carry out these extensive duties – which is the reason the body corporate management industry exists.
Conflicting interpretations of the legislation
Even though the Whitsunday Waters Resort decision relies on a QCAT appeal decision, it seems to be somewhat inconsistent with some previous adjudicator’s orders and principles such as:
- The District Court decision of Wei-Xin Chen v Body Corporate for Wishart Village CTS 19482 which relevantly provided:
“The very detailed provisions of the standard module regulation … make it almost inevitable that from time to time there will be non-compliance. Equally though the provisions of the Act make it clear that non-compliance of an insubstantial nature will not be allowed to imperil the actions of bodies corporate or their committees, particularly in the instance of committees where actions are taken bona fide.”
- An even more recent adjudicator’s order, Admiralty Towers II [2020] QBCCMCmr 87, which was made just four days after the Whitsunday Waters Resort With regards to the receipt of a requisition of an Extraordinary General Meeting that was not sent to the secretary, it states:
“In this case, however, the BCM, the secretary and indeed the entire committee well knew the respondents had made a request for a meeting. In my view, in the facts of this case, non-compliance was not fatal to the notice requesting a meeting.”
- And in yet another case, Zenith [2010] QBCCMCmr 587, the order outlined the following:
“Given that the Body Corporate Manager is engaged on behalf of the body corporate, and in turn the committee, I am satisfied that it was sufficient for the applicant to give the notices to the Body Corporate Manager on behalf of the committee.”
The implications of this latest order
If Whitsunday Waters Resort is followed or isn’t successfully appealed, we think this is only going to lead to further unnecessary disputes about motions, voting papers and EGM requisitions based on whether or voting papers have been properly dealt with by secretaries. People will be reluctant to nominate for a secretary position as a result.
We can only hope that this issue is cleared up the next time it’s considered as it doesn’t look like it’s being addressed in the new regulation modules under the proposed reforms.
Reducing the risks for body corporate managers
While we think the better outcome is that the body corporate manager is able to carry out the duties of the secretary, until this is resolved there is a risk for body corporate managers.
Unless body corporate managers are going to place the secretary’s duties on the secretary, body corporate managers should:
- make sure its committees are aware of this being a potential issue for their general meetings;
- obtain very clear instructions from the committee to continue carrying out these duties;
- and consider whether it would be helpful to create a “body corporate secretary” email account for each scheme that can be accessed by the secretary. Bear in mind that whether setting up an auto-forward function, or providing access, to the body corporate manager for this email account would satisfy the requirements of the module is still a question for the next adjudicator.
Mahoneys has extensive experience in the body corporate industry and the implications of adjudicator’s orders for body corporate managers and committees. If you’re seeking advice on any issues that arise with regard to community titles schemes, then get in touch with the experts at Mahoneys on (07) 3007 3777 or info@mahoneys.com.au
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