Talbot Manor [2002] QBCCMCmr 302 (16 May 2002)

P J HANLYREFERENCE: 0086-2002

ORDER OF AN ADJUDICATOR

MADE UNDER PART 10 OF CHAPTER 6

BODY CORPORATE AND COMMUNITY MANAGEMENT ACT 1997

Number of Scheme:	8610
Name of Scheme:	Talbot Manor
Address of Scheme:	18 - 22 Albert Street EAGLEBY

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

James Alfred Glenn, the owner of lot 12



I hereby order that motion 27 carried at the annual general meeting held on 28 February 2002 was at all times void, and therefore of no effect.


STATEMENT OF ADJUDICATOR’S REASONS FOR DECISION - REF 0086-2002

“Talbot Manor” CTS 8610

The applicant, James Alfred Glenn, 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 -

That motion 27 be stricken from the annual general meeting held on 28 February 2002.

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 incurred legal fees in relation to its non-compliance with a previous order of this office (0579-2000) and is now seeking to recover those fees from him. The applicant expresses the view that the body corporate has no legal basis to recover the fees from him. The applicant also points out that he now has an opportunity to sell the lot, if the body corporate does not continue with its proposal.

The body corporate committee was invited to respond to the application. Submissions were received from the committee and from numerous owners. All supported the notion that the body corporate should be entitled to recover properly incurred legal costs from the applicant, citing a variety of reasons, most of which related to their perception that the applicant had been uncooperative and obstructive.

Briefly, the history of this matter is that the previous body corporate manager went into receivership in December 2000. On 18 January 2001, an adjudicator ordered that the body corporate take certain steps to have termite infestation in the applicant’s lot repaired. The body corporate did not take those steps within the time frame allowed by the adjudicator’s order, and the applicant took enforcement action in the Magistrates Court. That action was subsequently settled out of court, as evidenced by an exchange of correspondence between the solicitors acting for both parties.

The letter dated 28 August 2001 from Hickey Lawyers, solicitors for the body corporate, to Robbins Watson, solicitors for the applicant, contains the terms of the settlement, which were stated as follows:

1. Our client (body corporate) immediately engage Opal Corp Pty Ltd to undertake rectification of internal termite damage to your client’s (Mr Glenn) unit in accordance with its estimate dated 18 June 2001 in the sum of $4,504.50.

2. Our client pay to your client the sum of $500.00 towards his legal costs of the application within seven (7) days.

3. Your client’s application be adjourned to the registry with no order as to costs.

4. Upon the compliance with orders 1 and 2 hereof your client is to withdraw his application.

The letter continued, essentially preserving the body corporate’s rights under section 109(4) of the Body Corporate and Community Management (Standard Module) Regulation 1997, which relate to the recovery of damages in certain circumstances. Legal costs do not fall into this category.

I requested a complete breakdown of the legal costs incurred by the body corporate. That information revealed that Hickey Lawyers acted for the body corporate from 3 August 2001 to 15 January 2002. I have perused the itemised charges and note that from the date of initial instructions to 29 August 2001, all attendances by Hickeys appeared to relate to the enforcement action taken by the applicant. From 4 September 2001 to 15 January 2002, the attendances appeared to relate to issues between the body corporate and Opal Corp, the contractor engaged by the body corporate to carry out the rectification work in the applicant’s lot.

On 16 May 2002 I conducted a meeting between Mr John Harlen, the body corporate secretary, and Mr Jim Glenn, the applicant. At this meeting, I pointed out to Mr Harlen that part of the costs sought to be recovered from Mr Glenn related to a time prior to the settlement effected between the parties on 28 August 2001. That settlement included a payment by the body corporate to Mr Glenn towards his costs. Once that settlement was reached, the body corporate was precluded from seeking costs in another forum.

As for the costs incurred after the date of settlement, Mr Harlen advised me that the body corporate simply wanted to ensure that the work which Opal Corp had contracted to perform, was performed satisfactorily. Mr Harlen explained that as it was body corporate funds being expended, the committee considered it had a duty to take these steps. I agree. However, the committee appears to have taken the view that as Opal Corp was not entirely cooperative, the legal costs incurred should somehow be attributed to the applicant. I do not agree with this proposition.

The applicant was entitled to have the termite infestation eradicated, and the resultant damage repaired. The fact that there may have been difficulties in achieving that does not justify the action taken by the body corporate to recover legal costs from the applicant.

I propose to order that motion 27, carried at the annual general meeting held on 28 February 2002, was at all times void and of no effect. The end result is that the body corporate must bear the costs, which I understand have already been paid. Of course, in this event, the applicant has, by payment of his levies, contributed a 1/16 share to those costs.