Anchorage [2000] QBCCMCmr 86 (18 February 2000)

C G YOUNGREFERENCE: 0182-2000

ORDER OF AN ADJUDICATOR

MADE UNDER PART 10 OF CHAPTER 6

BODY CORPORATE AND COMMUNITY MANAGEMENT ACT 1997

Number of Scheme:	14097
Name of Scheme:	Anchorage
Address of Scheme:	32-38 Riverview Parade SURFERS PARADISE QLD 4217

TAKE NOTICE that pursuant to an application made under the abovementioned Act by Hans FRANKE and Coral Janette FRANKE, co-owners of Lot 19,

C G YOUNGI hereby order that the application for an order 2yto evict Glenzeil Pty Ltd from the scheme, to demand the immediate restoration of common property and amenities by Glenzeil Pty Ltd, and to order compensation by Glenzeil Pty Ltd to owners affected adversely by the damage it caused, is dismissed.
STATEMENT OF ADJUDICATOR’S REASONS FOR DECISION - REF 0182-2000

“Anchorage” CTS 14097

This is the final order to an application by Hans and Coral Franke of Lot 19 (known as Unit 92) who have sought the following order of an adjudicator under the Body Corporate and Community Management Act 1997 (“the Act”), quote –

1. Immediately evict unauthorised trespassers, Glenzeil P/L, from Anchorage common property.

2. Demand immediate restoration of all “Anchorage” common property and amenities which were damaged by the adjoining property developers Glenzeil P/L as a result of unsafe building practices.

3. Issue orders regarding compensation of those proprietors adversely affected.

The applicants also sought an interim order and on 14 April 2000 the following Inrterim Order 182-2000 was issued, quote –

C G YOUNGI hereby order that the application for an interim order to -

1.	Immediately evict unauthorised trespassers, Glenzeil P/L, from Anchorage common property.

2.	Demand immediate restoration of all “Anchorage” common property and amenities which were damaged by the adjoining property developers Glenzeil P/L as a result of unsafe building practices,

is dismissed.

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)).

I will firstly address the question of jurisdiction. In its submission to the application, the respondent body corporate (through its Body Corporate Manager, RJ Goldstein), contends that an Adjudicator is incapable of making an order against a “third party”, namely Jacup Pty Ltd (developer) and Glenziel Pty Ltd (builder). It is correct that an adjudicator does not have jurisdiction to make orders against parties outside of, or unconnected to, the community titles scheme. However, while no order can be made against the two companies, if in these circumstances an adjudicator considers that a body corporate was not carrying out its duty under the legislation then an order could be made against a body corporate to take certain action in discharge of that duty. An applicable duty in this instance would be, as pointed out in the reasons to the interim order, to administer the common property reasonably and for the benefit of owners. Accordingly I consider that jurisdiction exists in the circumstances of this dispute.

However, an adjudicator does not have jurisdiction in respect of the third order sought, namely “compensation of those proprietors adversely affected”; neither would an adjudicator, in my opinion, be capable of making an order against the body corporate to pursue compensation on behalf of owners. The legislation only provides for an adjudicator to order compensation where the dispute is in respect to damage to the applicant’s property and does not exceed $10,000 (see section 227 of the Act). It does not provide for exemplary or punitive damages to be the subject of an order.

In the reasons to my interim order of 14 April 2000, I said –

In the circumstances, I am not satisfied that the applicant has established that either the nature or urgency of the circumstances warrant the making of an interim order. Accordingly, this application for an interim order is refused. However the state and use being made of the common property is at the very least an inconvenient one to the applicants and perhaps other occupiers. As a preliminary observation I would say that there are issues of health and safety, and perhaps property and liability insurance aspects, which the body corporate should have already considered and satisfied itself about. This is apart from its general duty to administer the common property reasonably and for the benefit of lot owners.

Since that time a number of events have taken place that bear significantly on the dispute.

The applicants have criticised the committee alleging tardiness in having the builder/developer rectify the common property area damage and remove its construction machinery and equipment from the common property. They have also criticised its failure to secure financial compensation from the builder/developer for those owners inconvenienced by the damage and the equipment near their lot. However, it is not true to say that the committee has done nothing about the situation.

Soon after the flooding of the north-west corner of scheme land the committee engaged an engineer to report on the damage and solicitors to provide advice. On 10 January the committee received a verbal report from Moir Consulting, Structural & Civil Engineers, on the damage by Glenzeil Pty Ltd. Corrs Chambers Westgarth, Solicitors, were also engaged to pursue the builder/developer to rectify the damage and to generally protect the interests of the body corporate. A series of discussions between the various parties and committee meetings took place over the following months, culminating in a proposal being put to owners at an extraordinary general meeting held on 5 May 2000. The proposal was for an agreement between the body corporate and the developer and builder which generally provided they rectify the damage caused and pay the body corporate’s costs in the matter. The agreement also reserved a right of action for both the body corporate and owners.

The resolution for the agreement was passed with a majority of 14 votes in favour and 3 against. I note that owners were supplied with a plain language summary of the negotiations and the terms of the agreement, along with a copy of the agreement. The solicitor and engineer acting for the body corporate were also present at the meeting to answer questions. Owners were therefore in a position to make an informed decision on the motion and subsequently voted overwhelmingly in favour of it.

It is often easy in retrospect to find quicker and easier ways in which a matter may be accomplished, however I consider the steps taken by the committee in dealing with the situation were reasonable in the circumstances. I note in the minutes of the meeting (last paragraph on page 2) that the chairperson (Mr Goldstein) advised the meeting, in response to a question, that notices and minutes of committee meetings “were forwarded to those owners who wish to receive same”. The scheme is regulated by the Standard Module regulations and therefore section 28 operates to require that the body corporate must provide owners with notices of committee meetings unless the owner has advised otherwise, and section 37 also provides similarly in respect of resolutions passed by a committee. That is, owners must be supplied with these documents as a matter of course unless notified to the contrary by an owner. Mr Goldstein believes that this has been done and the applicant has acknowledged receiving these documents.

The frustration and resentment of the applicant, and at least two other owners (from submissions received), over the inconvenience of the damage and the eyesore created by both the damage and the positioning of equipment, are understandable. The applicant states that the value of the lots has fallen because of the events, however providing the rectification work is carried out satisfactorily this should be remedied in time. If the applicant, or others, have suffered financially, and believe that fault and/or inaction exist with regard to the builder and developer, then they can take their own action. An adjudicator has, as I have explained, no jurisdiction in this respect and the action will have to be pursued in the courts.

On Tuesday 18 July 2000 I conducted a teleconference with Mr Goldstein and Mr Franke. From the comments of both parties it appears that reasonable rectification work has been carried out by the builder/developer and no construction machinery or equipment remains on the common property. The temporary fence is slightly out of alignment but that should be rectified when permanent rectification is undertaken. These actions by the builder/developer when viewed in conjunction with the $20,000 bond held by the body corporate, points to its compliance with the terms of the agreement and a satisfactory conclusion of the matter.

For the above reasons I have dismissed the application.



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