Proud's Landing [2001] QBCCMCmr 47 (1 February 2001)

P J HANLYREFERENCE: 0600-2000

ORDER OF AN ADJUDICATOR

MADE UNDER PART 10 OF CHAPTER 6

BODY CORPORATE AND COMMUNITY MANAGEMENT ACT 1997

Number of Scheme:	19743
Name of Scheme:	Proud's Landing
Address of Scheme:	125 Hansford Road COOMBABAH QLD 4216

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

Taylor Type Publications Pty Ltd, the owner of lot 1



I hereby order that the applicant, Taylor Type Publications Pty Ltd, has no liability to pay the body corporate for the arrears of levies in the sum of $164.30.

I further order that the body corporate shall take immediate steps to reverse the debit entry of $164.30 showing on the account of Taylor Type Publications Pty Ltd.

STATEMENT OF ADJUDICATOR’S REASONS FOR DECISION - REF 0600-2000

“Proud's Landing” CTS 19743

The applicant, Taylor Type Publications Pty Ltd, the Owner of lot 1, has sought the following order of an adjudicator under the Body Corporate and Community Management Act 1997 (the Act), quote:

An order is sought that this company is not responsible for arrears in contributions of $164.30 as alleged by the body corporate.

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 arrears in question were not disclosed by the body corporate on the section 162 certificate nor during a pre-settlement telephone call by the solicitor acting on the company’s behalf. The applicant further states that as the arrears were not known at the time of settlement, there was no means of adjusting for them in the settlement figures.

The body corporate committee was invited to respond to the application. A response was received from the secretary, in which it was stated that the certificate issued by the body corporate on 19 April 2000 was only valid at the time of issue “as credit and debit transactions on an account can take place at any time.” The secretary further stated that “settlements are commonly made on out of date certificates.”

Section 162(4) of the Act provides that a person who obtains a certificate (in the approved form giving financial and other information about the lot under section 162(3)) 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.

In a letter dated 21 August 2000, the secretary advised the applicant’s solicitor that subsequent to the date on which the section 162 certificate was issued, and in accordance with a resolution of the body corporate, recovery action was commenced against the then owner of lot 1, and further costs were incurred. The secretary further advised the applicant’s solicitor that “section 162 certificates are requested for a number of reasons and are not necessarily related to a sale of a lot so recovery action is not delayed because a section 162 has been issued.”

The history of this matter is as follows. On 18 April 2000, the applicant’s solicitor wrote to the body corporate manager requesting a section 162 certificate. The letter informed the body corporate manager that the applicant had entered into a contract to purchase the lot in question, and that settlement was due on 8 May 2000. The body corporate manager issued the section 162 certificate on 19 April 2000, and disclosed, amongst other things, that there was an amount of $144.04, representing “other payments” included in the total amount overdue. The documentation attached to the certificate revealed that this sum of $144.04 comprised of $42.64 for insurance and $101.40 for recovery of arrears. The section 162 certificate contained no disclaimer, and no warning that prospective purchasers should obtain a further certificate on the day of settlement, as the secretary is now suggesting should happen. Notwithstanding the absence of such a disclaimer or warning, the applicant’s solicitor prudently caused a check to be made with the body corporate manager’s office on 4 May 2000 to determine if the amount outstanding as shown on the section 162 certificate was still the same.

On 31 January 2001, I was advised by the solicitor’s employee, Raelene Russell, that on 4 May 2000, it was she who was informed by Brendan, a person in the employ of the body corporate manager, that the amount was still the same. On this basis, the appropriate adjustments were made in the settlement figures, and on 8 May 2000, the day of settlement, the outstanding amount was remitted to the body corporate manager, together with a Form 8 notification of change of ownership. The body corporate roll was amended on 12 May 2000.

I have been provided with a copy of the solicitor’s letter dated 18 April 2000 to the body corporate manager. It is quite evident that the section 162 certificate being requested was related to the sale of the lot. Furthermore, the applicant’s solicitor confirmed the amount outstanding within 4 days of the settlement date, and then immediately remitted that amount. If, as the secretary advised the applicant’s solicitor in his letter to her dated 21 August 2000, “telephone information should not be requested and cannot be relied upon” then that advice should be given to anyone who telephones. Instead, the body corporate manager’s employee not only gave information to Ms Russell, namely that the amount outstanding was still the same as that shown on the section 162 certificate, but also did not put her on notice that the information was not to be relied upon. In these circumstances, the applicant’s solicitor was entitled to, and did, rely upon the information. The additional amount relating to the recovery of arrears was not entered on the system until one month after the date of settlement.

I am satisfied that the applicant’s solicitor took all reasonable steps to determine the amount outstanding prior to settlement, so as to make appropriate adjustments in the settlement figures. I consider that the body corporate manager must accept responsibility for the fact that incorrect information was given to the applicant’s solicitor. I propose to order that the applicant is not liable for payment of the arrears in the sum of $164.30.