Olims Hotel Brisbane [2000] QBCCMCmr 8 (12 January 2000)

C G YOUNGREFERENCE: 0645-1999

ORDER OF AN ADJUDICATOR

MADE UNDER PART 10 OF CHAPTER 6

BODY CORPORATE AND COMMUNITY MANAGEMENT ACT 1997

Number of Scheme:	3563
Name of Scheme:	Olims Hotel Brisbane
Address of Scheme:	355 Main Street KANGAROO POINT QLD 4169

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

Kenneth Dale ARMSTRONG, Aministrator for the body corporate,

C G YOUNGI hereby order that Body Corporate Consultants (Brisbane) Pty Ltd of 46 Wharf Street, Kangaroo Point Qld 4169 must –

(1)

within one (1) week of the date of this order make available for collection by the Administrator of the body corporate, Kenneth Dale Armstrong, all of the records of the body corporate held by it or under its control, including all bank statements, financial accounting and other records, asset register, and minutes of general and committee meetings (including “flying minute” resolutions); and

(2)	within one (1) month of the date of this order pay to the body corporate for Olims Hotel Brisbane community titles scheme 3563 the sum of Four thousand Nine hundred and Forty-seven dollars ($4,947).

I further order that within one (1) month of the date of this order Donald Caslick, a Director of Body Corporate Consultants (Brisbane) Pty Ltd of 46 Wharf Street, Kangaroo Point Qld 4169 must pay to the body corporate for Olims Hotel Brisbane community titles scheme 3563 the sum of One thousand Two hundred and Eighty-two dollars and Twenty cents ($1,282-20).2n

STATEMENT OF ADJUDICATOR’S REASONS FOR DECISION - REF 0645-1999

“Olims Hotel Brisbane” CTS 3563

This is the final order to an application by the Administrator for the body corporate, Kenneth Dale Armstrong, who has sought the following orders of an adjudicator under the Body Corporate and Community Management Act 1997 (“the Act”), quote -

1. Body Corporate Consultants (Brisbane) Pty Ltd and/or Stewart Silver King & Burns (Brisbane) Pty Ltd shall provide copies of all up to date bank statements for each bank account held by the body corporate, updated general ledger information and transaction lists sorted into account codes, updated lot account levy balances, bank reconciliations, evidence of regular banking of laundry cash takings, evidence of regular marina berth rental payments, security deposits, all accounts, arrears and invoices, the asset register and any other financial material relating to the body corporate in the possession of Stewart Silver King & Burns (Brisbane) Pty Ltd.

2. Body Corporate Consultants (Brisbane) Pty Ltd and/or Stewart Silver King & Burns (Brisbane) Pty Ltd shall provide copies of any recent “flying minute” resolutions of the Committee and the minutes of the latest Committee meetings since 1 May 1999 (together with correspondence presented at those meetings) that have not been circulated to lot owners.

3. Body Corporate Consultants (Brisbane) Pty Ltd and/or Stewart Silver King & Burns (Brisbane) Pty Ltd shall facilitate the maintenance of the current body corporate bank accounts with Macquarie Bank and/or National Australia Bank with the appointed Administrator as signatory in the short term until a new Committee and signatory is appointed.

4. Payments from the body corporate accounts while under administration be authorised by at least one onsite body corporate representative/owner who is/are approved by majority vote of lot owners.

5. Body Corporate Consultants (Brisbane) Pty Ltd and/or Stewart Silver King & Burns (Brisbane) Pty Ltd return recent unauthorised drawings on body corporate funds to the body corporate.

6. Maintenance and purchase arrangements entered into by the erstwhile body corporate manager shall be reviewed and terminated or revised in the near term by the Administrator if proved inappropriate or not cost effective.

7. The Administrator shall investigate and address priority maintenance issues that require immediate attention and circulate recommendations together with costing to owners (note, these most likely fall within the $100 per lot limit that can be approved by a Committee).

The applicant also sought the following interim orders of an adjudicator, quote -

1. Body Corporate Consultants (Brisbane) Pty Ltd and/or Stewart Silver King & Burns (Brisbane) Pty Ltd shall immediately hand over control of the body corporate’s cheque accounts to the Administrator to facilitate payment of accounts.

2. Body Corporate Consultants (Brisbane) Pty Ltd and/or Stewart Silver King & Burns (Brisbane) Pty Ltd shall immediately provide 2 diskette copies of all up to date electronic data files from MAX software for preparation of the financial statements (note, this does not include a copy of the software program) and ensure such original data files are held on the company’s computer system for at least one month after copies are handed over.

On 25 November 1999 the following interim order, Interim Order 645-99, was issued in respect of the above application –

C G YOUNGI hereby order that –

1. The application for an interim order that Body Corporate Consultants (Brisbane) Pty Ltd and/or Stewart Silver King & Burns (Brisbane) Pty Ltd hand over control of the body corporate bank cheque accounts to the Administrator, is redundant and for this reason is dismissed.

2. Body Corporate Consultants (Brisbane) Pty Ltd (“the company”) must within one (1) week of the date of this order make available for collection by the Administrator for the body corporate, Kenneth Dale ARMSTRONG, or deliver to him, computer disks containing all electronic financial data files for the body corporate compiled using MAX software, for the period of the company’s engagement as Body Corporate Manager, and further, that the company must assist the Administrator in supplying any necessary information to assist in understanding the formatting, file structure, accounts, and like information contained in the computer disks, and also respond promptly (but no later than 24 hours) to reasonable requests from the Administrator for explanation or information regarding the disk content.

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 “Statement of Adjudicator’s Reasons for Decision” (“the Reasons”) to the interim order, I made the following comment prior to undertaking an examination of each of the final orders sought by the applicant –

I will first address the two interim orders sought by the applicant. Then, due to both the short-term involvement of the applicant with the body corporate and the proximity of the meeting, I will briefly address each of the seven final orders and give my immediate views on them. I feel that these views, while not a complete determination of each subject matter, will be of benefit to the Administrator (and indirectly the BCM) in the existing circumstances where time is of the essence.

The observations I made at that time in respect of the various final orders sought still represent my view on the matters and will, by reference, form part of the reasons to this order. A reading of the whole of the Reasons will also provide background information on the appointment of the Administrator. The appointment was made by Order 248-99 of 6 September 1999, with associated orders 162-99, 249-99 and 260-99 being issued on the same date.

Also in those Reasons, I said –

I have given my preliminary views on the evidence currently available in respect of each of the final orders sought, however there are some matters that need to investigated further, including an invitation to the BCM for a further submission in light of the foregoing comments. Final orders regarding the application will be made as soon as possible after the investigations are completed.

Accordingly, although the Body Corporate Manager, Body Corporate Consultants (Brisbane) Pty Ltd (“the BCM”) had already made a submission to the application in response to an invitation from this office, a further invitation was given to allow it the opportunity to respond to the observations I had made in the Reasons. The invitation was addressed for the attention of Mr Don Caslick, a director of the BCM and its representative in dealings with the body corporate. The BCM has not lodged any further submission. Its response to be taken into account in determining this application therefore comprises the original E-mail submission of 5 November 1999 consisting of brief comments on each of the final orders.

I shall deal with each of the seven final orders being sought by the applicant in the same numerical sequence shown in the application, commencing each with a bold, italicised quote of the particular order.

1. Body Corporate Consultants (Brisbane) Pty Ltd and/or Stewart Silver King & Burns (Brisbane) Pty Ltd shall provide copies of all up to date bank statements for each bank account held by the body corporate, updated general ledger information and transaction lists sorted into account codes, updated lot account levy balances, bank reconciliations, evidence of regular banking of laundry cash takings, evidence of regular marina berth rental payments, security deposits, all accounts, arrears and invoices, the asset register and any other financial material relating to the body corporate in the possession of Stewart Silver King & Burns (Brisbane) Pty Ltd.

In my Reasons to this order I ventured the opinion that, based on the response of the BCM, the failure of these records to pass from the BCM to the applicant was a result of personal differences. The BCM has not contested its obligation to deliver up the records in consequence of the termination of its contract with the body corporate, but has blamed the applicant for not responding to its letter of 23 October 1999 by making arrangements to take possession of them.

It is imperative that the Administrator has possession of all of the records of the body corporate in order to properly discharge his duties. In particular, it is important that finance records showing the financial status of owners are available to the Administrator in order to determine each owner’s full eligibility to vote (see section 49(11) Body Corporate and Community Management (Standard Module) Regulation 1997) for the forthcoming annual general meeting. In the Reasons I foreshadowed my order in respect of this matter by saying –

Unless there is some good reason otherwise that I am currently unaware of, the records will be required to be delivered. Any further delay will only hurt owners and I urge the BCM to deliver them in the interim period.

I have ordered the delivery of the records to the applicant within a week of this order being issued, however it will require the applicant to contact and make arrangements with the BCM for their collection.


2. Body Corporate Consultants (Brisbane) Pty Ltd and/or Stewart Silver King & Burns (Brisbane) Pty Ltd shall provide copies of any recent “flying minute” resolutions of the Committee and the minutes of the latest Committee meetings since 1 May 1999 (together with correspondence presented at those meetings) that have not been circulated to lot owners.

These minutes also form part of the records of the body corporate and therefore must also be surrendered to the applicant. The delivery of these records to the applicant is included as part of the order for the handing over of the items referred to in “1” above.

3. Body Corporate Consultants (Brisbane) Pty Ltd and/or Stewart Silver King & Burns (Brisbane) Pty Ltd shall facilitate the maintenance of the current body corporate bank accounts with Macquarie Bank and/or National Australia Bank with the appointed Administrator as signatory in the short term until a new Committee and signatory is appointed.

In the Reasons I have already found the bank accounts of the body corporate to be under the control of the applicant as Administrator (see comments in Reasons to the first interim order sought at page 3). I understand that at the time of application the applicant was unsure of his status with the bank, though is now aware of his sole control over the accounts. No order is necessary in this matter.


4. Payments from the body corporate accounts while under administration be authorised by at least one onsite body corporate representative/owner who is/are approved by majority vote of lot owners.

The comments I made in the Reasons that the applicant has full committee powers therefore should make his own decisions on issues, still stands. He may of course consult with owners and others as he sees fit. No order is necessary.

5. Body Corporate Consultants (Brisbane) Pty Ltd and/or Stewart Silver King & Burns (Brisbane) Pty Ltd return recent unauthorised drawings on body corporate funds to the body corporate.

In the Reasons I made the following observations –

From the evidence presented it appears that the BCM drew cheques for $4,947 in favour of the BCM and $1,282 in favour of the BCM representative, Mr Don Caslick, after the order was issued. The BCM has not denied this in its response. Order 248-99 at clause 6 is quite clear in stating that the BCM could only exercise its delegated powers subordinate to those of the Administrator and had to refer matters to him for decision, except where the Administrator had given approval to exercise its power in respect of particular matters. On present evidence it appears to me that the payments were in contravention of the terms of the order and my final order will follow this course.

The applicant was appointed Administrator of the body corporate on 6 September 1999 by Order 248-99. Part 6 of the order concerns duties and restrictions imposed on the BCM –

I further order that-

6. Body Corporate Consultants Pty Ltd, so long as it remains the Body Corporate Manager for the period of administration, must –

(a)

cooperate with the Administrator in all matters relating to the body corporate, including compliance with requests by him, either immediately where that is practical but no later than within twenty four (24) hours of a request, for access to any record of the body corporate, for the supply of a photocopy or computer printout of any body corporate record, or to give any explanation or information required by the Administrator concerning the body corporate records or its operations generally; and

(b)	only exercise its delegated powers subject to the authority of the Administrator to exercise those same powers, and must refer all matters to the Administrator for decision, except where the Administrator has advised otherwise in respect of particular matters.

Part 6(b) of the order clearly prohibits the BCM from making a decision to pay an invoice and actually paying the invoice by signing a cheque drawn on the body corporate’s bank account. Details of the two cheques put in dispute by the applicant are –

(1) Cheque No 001286; amount $1,282-20; in favour of “Don Caslick” and marked “Please pay Tracy Caslick” in handwriting; dated 10 September 1999; apparently signed by Don Caslick.

(2) Cheque No. 001286; amount $4,947; in favour of “Body Corporate Consultants”; dated 17 September 1999; apparently signed by “James O’Hare” a principal of the parent company, Body Corporate Consultants Pty Ltd.

Both cheques are drawn on the Macquarie Bank Limited, 300 Queen Street, Brisbane under the account name “The Body Corporate for Olims Hotel Brisbane C.T.S. 3583”, Account No. 3006-04808.

The applicant has submitted a copy of a letter from Bromwyn Cunningham of the Macquarie Bank, dated 7 October 1999, with attached photocopies of the two cheques referred to above. Both cheques were drawn after the appointment of the Administrator on Monday 6 September 1999 and after certified copies of the appointment order were served on the BCM by mail on that date.

The BCM was given an opportunity to respond to the observations contained in the Reasons, including the comment that “On present evidence it appears to me that the payments were in contravention of the terms of the order and my final order will follow this course.” It has not given any reason in defence of its action and my order is therefore for the respective amounts to be repaid to the body corporate by the parties. Whether or not the amounts were due to the parties for work done on behalf of the body corporate, at the time of the drawing of the cheques only the Administrator, under the terms of appointment of Order 248-99, had the power to authorise the payments. That authorisation was not given and the payments were therefore invalid. My order is therefore for the recipients of the cheques to repay the respective amount to the body corporate. Any monetary claim they may have against the body corporate for work performed or other reason, will have to be taken up with the Administrator, or, after the forthcoming committee election, with the secretary or treasurer.

6. Maintenance and purchase arrangements entered into by the erstwhile body corporate manager shall be reviewed and terminated or revised in the near term by the Administrator if proved inappropriate or not cost effective.

I refer to the comments made in the Reasons. No order is necessary.

7. The Administrator shall investigate and address priority maintenance issues that require immediate attention and circulate recommendations together with costing to owners (note, these most likely fall within the $100 per lot limit that can be approved by a Committee).

I refer to the comments made in the Reasons. No order is necessary.

Conclusion.

In summary, orders are only necessary in respect of Orders 1, 2 and 5 sought by the applicant. While the applicant has asked that these orders be made jointly or severally against the BCM and an associated company, Stewart Silver King & Burns (Brisbane) Pty Ltd, the BCM has responsibility for the body corporate records regardless of where it is held, and my orders are therefore solely against the BCM. No orders are necessary in respect of the other orders sought by the applicant.