Spinnaker Sound Stage A [2002] QBCCMCmr 219 (19 April 2002)

DP GardinerREFERENCE: 0699-2001

ORDER OF AN ADJUDICATOR

MADE UNDER PART 10 OF CHAPTER 6

BODY CORPORATE AND COMMUNITY MANAGEMENT ACT 1997

Number of Scheme:	10373
Name of Scheme:	Spinnaker Sound Stage A
Address of Scheme:	Sandstone Point SANDSTONE POINT QLD 4511

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

Mr Arthur and Mrs Annette Kinchela, the Owner of lot 12



I hereby order that the application for orders that:

1. an auditor be appointed to audit the accounts of the body corporate for the last five years.

2. an administrator be appointed to perform the duties and obligations of the body corporate.

3. that a police investigation be conducted into the unauthorised use of body corporate funds.

is dismissed.


AMENDED STATEMENT OF ADJUDICATOR’S REASONS FOR DECISION - REF 0699-2001

“Spinnaker Sound Stage A” CTS 10373

DATE AMENDED 21/05/2002

The applicant Mr Arthur and Mrs Annette Kinchela, the Owner of lot 12, has sought the following order of an adjudicator under the Body Corporate and Community Management Act 1997 (the Act), quote -
“Full audit of body corporate’s financial records
Appointment of an administrator
Police investigation re unauthorised use of body corporate funds”

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)).

In the supporting grounds, the applicant by her solicitors’ letter dated 11^th October 2001 states that:

1. on almost every occasion for many years expenditure incurred by the body corporate is never discussed or authorised at committee level but unilaterally made or paid by the long-standing chair person, Mr. M Scott despite the provisions of Regulation 26 of the Body Corporate and Community Management (Standard Module) Regulation 1997 (Standard Module).

2. a check of body corporate records with the assistance of a former committee member indicates that on numerous occasions since 1995 the said chair person Mr. M Scott has made payments to himself or an associated company for alleged reimbursement of expenses totalling thousands of dollars.

3. concerns are held that not only is there no control on body corporate funds to which the applicants and other proprietors of the units contribute, but also there are strong suspicions and evidence that Mr. Scott has and is misappropriating body corporate funds by making such a large number of unauthorised reimbursements to himself and his associated company without committee approval or checks of receipts, invoices etc to confirm that such reimbursements are justified.

The information offered in support of these claims is a list of transactions which detail in chronological order transactions on a financial year basis. I calculate that the expenditure of which the applicants complains as follows:

• 1995/1996 $2,446.44

• 1996/1997 $2,903.11

• 1997/1998 $ 898.97

• 1998/1999 $3,011.03

• 1999/2000 $2,426.01

• 2000/2001 $2,219.43

Lengthy submissions have been received from other lot owners, the chairperson Mr. Scott, and the body corporate manager. Whilst I do not intend to repeat those submissions in any detail, I have given careful regard to all the information provided and attached appropriate weight and significance to this information.

I have also carefully read the lengthy response by the applicant to the submissions received to ascertain whether any further information or evidence had been supplied by the applicant to supplement the information which accompanied the application.

In her application, the Applicant has made very serious criticism of Mr. Scott which at the very least borders on being defamatory and potentially actionable. Such criticism can only be justified if compelling evidence is provided. On my perusal of all the information, the Applicant has not provided evidence or information of that description.

Turning to the specific issues, I consider that this is not a case of a member of the committee being reimbursed for expenses in circumstances that potentially do not comply with sections 26 & 103 of the Body Corporate and Community Management (Standard Module) Regulation 1997 (Standard Module) . Rather, I consider that the body corporate has reimbursed Mr. Scott for expenses incurred by the body corporate which Mr. Scott paid.

With respect to the complaint that on almost every occasion for many years expenditure incurred by the body corporate is never discussed or authorised at committee level but unilaterally made or paid by the long-standing chair person, Mr. M Scott despite the provisions of Regulation 26 of the Body Corporate and Community Management (Standard Module) Regulation 1997 (Standard Module), I consider that these expenses are ones which a body corporate manager is entitled to incur and pay (see section 37(5)). I do not accept the assertion that such expenditure has made or paid by Mr. Scott as I am firmly of the view that these were expenses incurred by the body corporate and in effect paid by them.

It is apparent from the reasons set out above that I intend to dismiss the application.

For sake of completeness, I state that I do not have the power to order an investigation by the Queensland Police Service. If I did have such a power, I would not make such an order as there is no credible evidence which would justify doing so. Additionally, I do not consider that any basis has been shown justifying the appointment of an administrator.

Having read all the information to hand, I am satisfied that the body corporate committee has recognised the importance of conducting its affairs in accordance with the Act and Regulations.

The application is dismissed.





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