Cliveden Gardens [2000] QBCCMCmr 43 (1 February 2000)

P J HANLYREFERENCE: 0675-1999

ORDER OF AN ADJUDICATOR

MADE UNDER PART 10 OF CHAPTER 6

BODY CORPORATE AND COMMUNITY MANAGEMENT ACT 1997

Number of Scheme:	8703
Name of Scheme:	Cliveden Gardens
Address of Scheme:	19 Chatswood Road DAISY HILL QLD 4127

TAKE NOTICE that pursuant to an application made under the abovementioned Act by

Vernon John Myers and Elizabeth Jean Myers, the owners of lot 3

P J HANLYI hereby order that, until the body corporate resolves to the contrary at a general meeting, owners shall be given a ten percent discount on any levies paid by them in accordance with motion 4 passed by special resolution of the body corporate at the Annual General Meeting held on 11 March 1997.

STATEMENT OF ADJUDICATOR’S REASONS FOR DECISION - REF 0675-1999

“Cliveden Gardens” CTS 8703

The applicants Vernon John Myers and Elizabeth Jean Myers, the owners of lot 3, have sought the following order of an adjudicator under the Body Corporate and Community Management Act 1997 (the Act), quote -

Discount for prompt payment of strata fees be allowed

Special levy incorrectly called on 17-8-99

Section 223(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 community management statement; or

b) the exercise of rights or powers, or the performance of duties, under this Act or the community management statement; or

c) a claimed or anticipated contravention of the terms, or the termination of, or the exercise of rights or powers under the terms of, or the performance of duties under the terms of an engagement contract or an authorisation contract.

An order may require a person to act, or prohibit a person from acting, in a way stated in the order (section 223(2)). An adjudicator’s order may contain ancillary or consequential provisions the adjudicator considers necessary or appropriate (section 230(1)).

In the supporting grounds, the applicants express the view that the body corporate levies should be subject to a 10 percent discount if paid in accordance with motion 4 passed at the Annual General Meeting held on 11 March 1997. The applicants also request clarification as to when the body corporate can call for special levies to be paid, and whether such levies should be approved by the body corporate at a general meeting.

All owners were invited to respond to the application. Responses were received from one owner, and from the body corporate manager. The body corporate manager advised that no provision for a discount on levies was made at the Annual General Meeting held on 29 June 1999. In that regard, the body corporate manager submitted that an oversight had occurred, in that, if a discount were to be allowed, then a larger amount should have been struck for the levies. The body corporate manager also stated that the body corporate had been advised that there are steps which must be taken if a special levy is to be struck in the future.

I note from the material that the body corporate manager advised the applicants on 2 November 1999 as to the amounts constituting the special levy.

At the Annual General Meeting held on 11 March 1997 the body corporate resolved by special resolution that a ten percent discount be given for any levies received by the body corporate before the due date. The motion further specified that the discount was to continue to apply “until altered by a general meeting of the body corporate.” Two further Annual General Meetings have been held, on 14 November 1998 and 29 June 1999, but no motion has been passed dealing with the question of a discount on levies. Accordingly, that discount must be allowed by the body corporate manager, until it is disallowed, or otherwise altered, by an ordinary resolution of the body corporate passed at a general meeting. If any owners have paid their levies without being given the benefit of the discount, then an appropriate credit should be made on the next levy notice.

The applicants have also sought clarification as to the manner in which a special levy can be struck by the body corporate. Section 95 of the Body Corporate and Community Management (Standard Module) Regulation 1997 (the Standard Module) provides for the manner in which contributions are to be levied on owners. In particular, section 95(2) provides that if a liability arises for which no provision, or inadequate provision, has been made in the budget, the body corporate must, by ordinary resolution, fix a special contribution to be levied on owners, and decide how and when it is to be paid.

I note that in the past, the body corporate has not followed this procedure, although it appears that the body corporate manager has advised owners of the correct approach to be taken if the matter arises in the future. I therefore do not propose to make a formal order in this regard.