Cashelmara Lodge [2000] QBCCMCmr 50 (7 February 2000)

RA MeekREFERENCE: 0629-1999

ORDER OF AN ADJUDICATOR

MADE UNDER PART 10 OF CHAPTER 6

BODY CORPORATE AND COMMUNITY MANAGEMENT ACT 1997

Number of Scheme:	10006
Name of Scheme:	Cashelmara Lodge
Address of Scheme:	4 Corowa Court, Mooloolaba QLD 4556

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

Elizabeth Anne Fiederlein, the co-owner of lot 4

RA MeekI hereby order that the application by Elizabeth Anne Fiederlein, the co-owner of lot 4, for an order that the $250 penalty for late payment of special levy contributions be eliminated, is dismissed. n

STATEMENT OF ADJUDICATOR’S REASONS FOR DECISION - REF 0629-1999

“Cashelmara Lodge” CTS 10006

The applicant Elizabeth Anne Fiederlein, the co-owner of lot 4, has sought the following order of an adjudicator under the Body Corporate and Community Management Act 1997 (the Act), quote -

The dispute relates to penalty of $250.00 which was not brought to my attention at any time that a 2.5% monthly penalty applied to large special sinking fund levies. ... I feel (the penalty of $250) is unacceptable and unfair. My claim is for the penalty to be eliminated.

Section 223(1) 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 applicant states that –

Due to unforeseen circumstances out of my control late lodgement of special sinking fund levies were charged at 2.5% per month. ... There was no mention of 2.5% penalty on $2500 and $7500 = $10000. I was totally unaware 2.5% applied to special sinking fund late lodgement and sincerely believed that it related to yearly unit fees not paid on time only. I have never ever been late with me cost of unit fees. After having spent $15000 plus on funeral bills, $2500 6 months later is a lot of money then $75005 months later and during this time 2 cheques bouncing.

The applicant has put in a further statement in support of her application, which I have considered but do not intend to restate here. It enlarged on the matters referred to above.

In response to the application, a substantial submission has been made on behalf of the body corporate by the secretary. That submission opposes the granting of the order which has been sought by the applicant.

The applicant is seeking that I overturn the body corporate decision to impose a penalty on special contributions which were paid by her out of time. I do have the power to overturn a body corporate decision, where I consider that it is not made reasonably and for the benefit of owners generally.

The secretary of the body corporate, in her submission, has made the point that the applicant has not at any stage referred the matter of the imposition of the penalty specifically to the body corporate for consideration. The secretary states that –

I would stress again that no representation was made by the Feiderlein’s for a waiving or reduction of penalty at this or any meeting.

The imposition of the penalty arose due to an earlier decision of the body corporate generally to impose such penalties on the late payment of contributions. The applicant does not appear to oppose this determination specifically, but believed that it did not apply to special levy contributions. In my view, the applicant does not adequately explain the basis of this belief. Certainly, if a determination to impose penalties on late contributions had been made, then I suggest that, in the absence of very clear evidence to the contrary, such decision would apply to all late payment of contributions, whether they be ordinary periodic contributions or special contributions. To draw a distinction between such contributions would appear to me to be illogical.

Further I have considered the terms of the resolution of the AGM of December 1998 at which the body corporate elected to impose a penalty of 2.5% (of simple interest for each month the contribution or instalment is in arrears) to be paid by the owners if a contribution or instalment is not received by the body corporate by the date fixed for payment ... . I consider that there is no reason for an ambiguity regarding this resolution. I consider that its terms are clear and intended to apply to all contributions or instalments.

I note that the applicant has been invited to refer the matter to the body corporate for determination on at least two occasions, but to date has not done so. In fact, the applicant appears to have specifically elected not to proceed in this manner. A letter of 27 August 1999 by her to the secretary which states in part –

... penalty of $250-00 a motion to be placed on agenda for next meeting with regard to this matter be deleted. Meeting 17/10/99 ...

In the circumstances, I consider that the applicant should have referred this matter to the body corporate for its determination at first instance. I consider there is really no body corporate determination which I might overturn on the basis that it is unreasonable. Certainly, the initial decision to impose a penalty on late contributions is not, on its face, unreasonable.

In the circumstances, I intend to dismiss this application. I find nothing inherently unreasonable in the actions of the body corporate regarding this matter. I consider the applicant should have referred this matter to the body corporate at first instance, before making an application to this office. This might very well have made any application unnecessary, or alternatively, served to clarify the issue of unreasonableness.

In any event, on a wider consideration of the merits of the application, I am not persuaded that the personal issues raised by the applicant as the basis for her application, either in terms of their nature or their proximity to the time of the imposition of the penalty, are such that the body corporate should have acted differently regarding this matter.