Cairns Golden Sands [2001] QBCCMCmr 608 (30 November 2001)

C G YOUNGREFERENCE: 0620-2001

INTERIM ORDER OF AN ADJUDICATOR

MADE UNDER PART 10 OF CHAPTER 6

BODY CORPORATE AND COMMUNITY MANAGEMENT ACT 1997

Number of Scheme:	17890
Name of Scheme:	Cairns Golden Sands
Address of Scheme:	12-14 Deauville Close YORKEYS KNOB QLD 4870

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

Kenneth RAE and Maureen RAE, the co-owners of Lot 7,


C G YOUNGI hereby order that the application for an order –

That all discounts they disallowed and the interest they have added should be disregarded from our current levy notice as they accumulated this amount without trying to resolve our dispute with them and we believe this is not legal,

is dismissed 2yfor lack of jurisdiction.

STATEMENT OF ADJUDICATOR’S REASONS FOR DECISION - REF 0620-2001

“Cairns Golden Sands” CMS 17890

The applicants, Kenneth and Maureen Rae of Lot 7, have sought the following order of an adjudicator under the Body Corporate and Community Management Act 1997 (“the Act”), quote -

That all discounts they disallowed and the interest they have added should be disregarded from our current levy notice as they accumulated this amount without trying to resolve our dispute with them and we believe this is not legal.

The applicants have also sought the following interim order, quote –

If a resolution is not made prior to our next levies which are due on 1/11/01 (we haven’t had a levy notice yet – 12/10/01), we would like them to stop accruing money as we believe they are acting unfairly.

Section 225(1) of the Act provides that an adjudicator may make an interim order if satisfied, on reasonable grounds, that an interim order is necessary because of the nature or urgency of the circumstances to which the application relates. An adjudicator’s order may contain ancillary or consequential provisions the adjudicator considers necessary or appropriate (section 230(1)).

As this is solely a matter between the applicants and the body corporate which has no effect upon, or implications for, other owners, and the body corporate has through its solicitors, Morrow Petersen of Cairns, made a comprehensive submission addressing the main order sought, I consider it appropriate in everyone’s interest that I finally determine the matter in this interim order.

The respondent body corporate has raised two questions on jurisdiction that I need to address at the outset.

Firstly, section 223(1) of the Act requires that a dispute, as defined in section 182 of the Act, must exist for an adjudicator to have jurisdiction to deal with an application. The respondent submits that no dispute exists as the application only relates to the alleged failure by the body corporate to respond to certain complaints. I think it is obvious from the grounds to the application, if not from the order sought, that the dispute is whether the body corporate should have paid the refund to the applicants and not to the Quilty’s as it did. I consider a dispute exists to allow jurisdiction in these circumstances.

Secondly, the respondent states that it is necessary for the respondent to show that the dispute with the body corporate is a dispute related to their capacity as the owners of Lot 7. That is, section 182 provides for a dispute between an owner and the body corporate, but the dispute must relate to the ownership of the lot under which the applicant is claiming the right to make application. Section 182 defines “owner” as follows –

“owner”, of a lot, means a person in the person’s capacity as the owner of the lot, and not, for example, in the person’s capacity as a service contractor or letting agent for the scheme.”

The situation here is that the applicants are the owners of Lot 7 whereas the dispute concerns a refund which they say was due to them as the prior owners of Lot 8. While the disputed amount of $77.69 was deducted by the applicants from the contribution amount levied on them as the owners of Lot 7, the dispute still relates to a payment related to their ownership of Lot 8. As the current owners of Lot 7, they cannot make application for determination of a dispute that does not concern ownership of that lot.

If I were to allow the applicants to amend their application so that it is made by them as the former owners of Lot 8, this change still does give jurisdiction for an adjudicator to determine the matter. This is because section 182 must be interpreted to refer only to current owners at the time of application, having regard to the decision of Dowsett J in Suncorp Insurance and Finance–v-Retail Shop Lease Tribunal[1995]2Qd R 429, wherein his Honour held that a mediator and therefore a Retail Shop Lease Tribunal had no jurisdiction under the relevant Act to determine a dispute between persons who, at the time of reference of the dispute to the mediator, had been but were no longer in the relationship of landlord and tenant under a retail shop lease. His Honour held that the description of a person as a “landlord” or as a “tenant” (to which his Honour said that Ormiston J in Jam Factory Pty Ltd-v-Sunny Paradise Pty Ltd[1989]V.R.584 gave the meanings which those words normally have) implies that he or she currently has such status. His Honour further held that in the absence of words extending that meaning, one would not normally assume that the reference was to persons who had been landlords or tenants at some previous time. Earlier in his judgment, his Honour stated that if it were intended that the word ‘landlord’ include a person who previously had that capacity under a terminated lease, one would have expected the section to refer to a person who, “is or was previously” entitled to such rent.

Section 182 only refers to “owner” and makes no allowance for a person who “is or was previously” an owner. Accordingly, under section 220(2)(a) of the Act, it is the practice of adjudicators to dismiss applications for want of jurisdiction where the dispute concerns a person in their former capacity, including as a former owner.

I have dismissed the application on this ground.

However, for the benefit of the applicants I wish to make some comments on their claim. Both the applicants in their attachments to the application, and the body corporate in its submission to the application, have provided copies of a great many documents bearing on the dispute, including letters between the parties, body corporate accounts ledgers, agreements, minutes of meetings, and contribution levy notices. The documentation, and the written evidence of the parties, is sufficient for me to offer a comment on the dispute.

I will not set out all of the facts of the matter as they are known to both parties and are largely common ground between them.

At an extraordinary general meeting held on 4 February 1998, the body corporate resolved to impose a special contribution on owners sufficient to meet a debt of some $18,000 (owing to the applicants, though this is irrelevant to the dispute). The contribution levied on Lot 8 as its share was for $1,058-80 and, following the sale of this lot (the Resident Manager’s lot) to the Quilty’s, they paid this levy. An adjustment for the payment was made between the applicants and the Quilty’s upon settlement. Some months later, the body corporate refunded part of the contribution to owners, resulting in a payment of $205.88 to the Quilty’s as the then owners of Lot 8. The applicants believe the refund should have been paid to them as they had effectively paid the contribution through the settlement adjustment. The body corporate says that it could only deal with the owner at the relevant time and maintains that the refund rightfully went to the Quilty’s.

The applicants then deducted the amount of $77.69 from the contributions levied on them as the owners of Lot 7. The body corporate subsequently disallowed discounts, and imposed interest penalties on the outstanding amount, and the applicants paid the $77.69 under protest. However, evidently the applicants have been paying their accounts less the discount, whereas they have not been allowed the discount and have also been accumulating penalty interest.

Had I to decide this matter I would decide in favour of the body corporate. The body corporate can only deal with the owner at the time a decision is made, hence the refund to the Quilty’s. The body corporate was not privy to the settlement adjustments between the parties and cannot take it into account.

I would also comment that what started out as a small debt has grown (through lost discounts and penalties) to a much larger amount – as the applicants say, they are sorry they ever contested the refund. However, the applicants must have realised over the intervening years as each contribution levy arrived, that their action was resulting in a ever larger amount owing and should have resolved the matter earlier. I note that the Body Corporate Manager has written to the applicants a number of times on the matter, and further claims having given the same reasons to the applicants on the telephone on six occasions. I must say that I am surprised at the amount of paperwork involved in this dispute and can only guess at the cost involved in both administrative and legal costs – nearly all being borne by other owners. The applicants, I suggest, should pay the outstanding amounts and penalties in full and put the past behind them.

In the circumstances it is not intended to invite further submissions regarding this matter, or to make a further order, since this decision, though an interim one as sought by the applicant, is final in its determination of the matter. If a party is dissatisfied with this order then they may appeal it.