Ela Dorina [2001] QBCCMCmr 110 (22 February 2001)

P J HanlyREFERENCE: 0712-2000

ORDER OF AN ADJUDICATOR

MADE UNDER PART 10 OF CHAPTER 6

BODY CORPORATE AND COMMUNITY MANAGEMENT ACT 1997

Number of Scheme:	12831
Name of Scheme:	Ela Dorina
Address of Scheme:	60 Edward Street, ALEXANDRA HEADLAND QLD 4572

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

Bertha Estelle CORMACK, the owner of Lot 9



P J HanlyI hereby order that the body corporate must recover 1nfrom Brian Douglas Holliday and Anne Maree Crosbie, the co-owners of Lot 7 the amount of $75.00 representing outstanding contributions owed to the body corporate.
STATEMENT OF ADJUDICATOR’S REASONS FOR DECISION - REF 0712-2000

“Ela Dorina” CTS 12831

The applicant, Bertha Estelle Cormack of Lot 9 has sought an order of an adjudicator under the Body Corporate and Community Management Act 1997 (“the Act”) that the body corporate recover money owed to the body corporate from the owner of Lot 7.

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 applicant states that the body corporate has decided to write off the debt owed by the owner of Lot 7. The applicant disagrees with this decision. Miss Cormack has included with her application:

1. A letter dated 1 December 2000 from Lyons Dunlop & Pratt (Certified Practising Accountants) regarding the amount of $75 owed by the owner of Lot 7 to the body corporate to 30^th September 2000. It is stated that the amount is owed to the body corporate as “there may have been an error in the adjustment on settlement when Miss Crosbie and Mr Holliday purchased the unit”.

2. The minutes of the Annual General Meeting dated 2 December 2000. Under agenda item 1 it is noted “this money is owed by previous owners of these units for periods prior to the financial year ending 30 September 2000. The meeting decided that, although the current owners of Unit(s)...7 are legally liable for levies outstanding, the amounts identified by Mr Pratt will be written off by the Body Corporate. This is not to be seen as a precedent but has been decided because of the particular circumstances”.

A copy of the application was forwarded to the co-owners of Lot 7, and the secretary for distribution to all owners (excluding the applicant and the owner of Lot 7) and to all members of the committee. Mr Holliday, a co-owner of Lot 7 has submitted that settlement of the lot took place on 19 March 1999 and that up until November 2000, the owners were only aware of an outstanding amount of $40 which related to pest control treatment carried out before their purchase of the lot. Mr Holliday states that the previous owner of Lot 7 disputed this expenditure, and that the current owners were not aware that there might have been monies outstanding until Miss Cormack contacted them before the AGM held in December 2000. Mr Holliday also states that Miss Cormack was the secretary/treasurer of the body corporate during this time, that the accounts were a mess, and that he considers that the meeting decided to write off the supposedly outstanding levies as it could not be definitely determined if the money was owed.

This application relates to the payment and recovery of contributions levied on lot owners by the body corporate. Section 99(1) and (2) of the Body Corporate and Community Management (Standard Module) Regulation 1997 ("the Standard Module") provides:

“(1) If a contribution, or instalment, is not paid by the date for payment, the body corporate may recover the amount of the contribution or instalment, together with any penalty, as a debt.

(2) A liability to pay a contribution, instalment, penalty or other amount payable to the body corporate in relation to a lot is enforceable jointly and severally against the person who was the owner of the lot when the contribution, instalment or other amount became payable and a person (including a mortgagee in possession) who becomes an owner of the lot before the contribution, instalment, penalty or other amount is paid.”

Therefore, the body corporate may recover an outstanding contribution as a debt, and the liability is enforceable against a person who subsequently becomes the owner of the lot before an outstanding contribution is paid. A person intending to purchase a lot in a community titles scheme is entitled to body corporate information under section 162 of the Act. Under section 162(3), the buyer of a lot is entitled to request from the body corporate a body corporate information certificate which gives financial and other information about the lot. This certificate is specifically designed to provide information about the current annual contributions and the amounts due but unpaid in respect of a particular lot. Section 162(4) of the Act provides that a person who obtains a body corporate information certificate “may rely on the certificate against the body corporate as conclusive evidence of matters stated in the certificate, other than to the extent to which the certificate contains an error that is reasonably apparent”.

The body corporate has an obligation to recover properly determined outstanding contributions from lot owners. While the body corporate has the power under section 99(5) of the Standard Module to allow a discount of contribution or to waive a penalty, it does not have a right to waive a contribution payable by a particular lot owner. It would unfair and unreasonable for a body corporate to make such a decision and a lot owner would be entitled to seek an order of an adjudicator if the body corporate had chosen not to recover a debt. The minutes of the AGM in December 2000 have noted that the auditor has identified money owing to the body corporate by the owners of three lots. The owners of two of these lots have subsequently paid the amounts owing to the body corporate. While Mr Holliday disputes the amount to be paid to the body corporate, the auditor has informed the body corporate that the owner of Lot 7 is liable for $75.00. This statement does identify the liability to the body corporate, and the body corporate has an obligation to recover this money from the co-owners of Lot 7. For these reasons, I have ordered that the body corporate recover the amount of $75.00 from the co-owners of Lot 7.

If the current owners of Lot 7 believe that they or their legal representatives did not receive the correct information from the body corporate under section 162 of the Act prior to the purchase of the lot, then they should consider their rights against the body corporate in this regard.

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