Maria Creek Estate [2002] QBCCMCmr 532 (28 August 2002)

C G YOUNGREFERENCE: 0171-2002

INTERIM ORDER OF AN ADJUDICATOR

MADE UNDER PART 10 OF CHAPTER 6

BODY CORPORATE AND COMMUNITY MANAGEMENT ACT 1997

Number of Scheme:	25253
Name of Scheme:	Maria Creek Estate
Address of Scheme:	51 Rebecca Jane Parade KURRIMINE BEACH QLD 4871

TAKE NOTICE that pursuant to an application made under the abovementioned Act by: Michael John TAIFALOS and Shirley MATTHEWS, the co-owners of Lot 1; MELIVAN PTY LTD, represented by Ivan and Carmelina Andrijevic, the owner of Lot 4; and Claude Humphrey MARSH and Shirley Joy MARSH, the co-owners of Lot 5,

C G YOUNGI hereby order that the body corporate must cancel the extraordinary general meeting of the body corporate called under notice of 12 August 2002 to be held on 3 September 2002, nor can the motions, nor motions of the same or similar substance and intent, be put to an alternative general meeting of the body corporate pending determination of this application by final order.

I further order that if the meeting is held on 3 September 2002, or a subsequent meeting is held and the same or similar motions are decided before the final order to this application is made, then all motions passed at any such meeting are void and of no effect 2n

STATEMENT OF ADJUDICATOR’S REASONS FOR DECISION - REF 0171-2002

“Maria Creek Estate” CMS 25253

The applicants: Michael Taifalos and Shirley Matthews of Lot 1; Melivan Pty Ltd (represented by Ivan and Carmel Andrijevic) of Lot 4; and Claude and Shirley Marsh of Lot 5, have sought the following order of an adjudicator under the Body Corporate and Community Management Act 1997 (“the Act”) -

“That an administrator be appointed for a period of one year ”

JURISDICTION:
This is a dispute between a number of owners, the applicant owners of Lots 1, 4 and 5, and the body corporate, the respondent, concerning the alleged failure of the body corporate to comply with certain legislative provisions in the calling and conduct of the annual general meeting held on 12 February 2002, and the conduct of the affairs of the body corporate by Peter and Marcia Hablethwaite as evidenced in Orders 321-98, 444-98, 515-99, 719-99, 30-02, 38-02 and 119-02. These are matters that fall within the Dispute Resolution provisions of the legislation (see sections 182, 183, 223, 224 and 248 of the Act).

While the applicants have not made application for an interim order, I have determined that in the circumstances explained in “Determination” following, that an interim order is necessary to prevent the body corporate from taking an action that, if the order sought is granted, may result in a significant financial disadvantage to the body corporate and therefore against the interests of owners generally.

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. The provision does not specify that an interim order can only be made in response to an application for an interim order by a disputant, even though that is most often the case.

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) of the Act). An adjudicator’s order may contain ancillary or consequential provisions the adjudicator considers necessary or appropriate (section 230(1) of the Act).



APPLICATION AND SUBMISSIONS:
Under the provisions of section 194 of the Act, a copy of the application was provided to the respondent body corporate committee with an invitation to respond to the matters raised in the application. A submission has been received from the committee, undated but faxed on 1 May 2002. I note that a submission was made personally by “P Hablethwaite” dated 20 June 2002. I also note that in a letter to Peter Hablethwaite dated 13 May 2002 from the Commissioner for Body Corporate and Community Management addressing a number of issues, she says, “I consider that as the other party to the dispute, it is the Body Corporate that has proper standing to make a written submission in response to the application. I note that the committee has made a submission in response to the application. I do not consider that it is necessary for me to invite you to make an individual written submission as an owner of a lot in the scheme.” That does not prevent me, as the Adjudicator for the matter, from accepting the submission in determining my final order to the application, or in determining this interim order, and I do so.

I do not intend at this time to canvass the merits of either the application or the committee’s submission, and therefore there is no need for me to list out the various points and counter arguments of the parties either. The reasons for this will be clear from my following comments.



DETERMINATION:
The applicants are seeking the appointment of an administrator to manage the body corporate for a year to ensure that the legislation is complied with in the calling and conduct of meetings, in the establishment of the books and records of the body corporate, and in the decision making of the body corporate. Under section 248 of the Act, such an appointment, if made, can be accompanied by a suspension of the powers of committee members and the committee as an entity, or a restriction on those powers. It also provides for the withdrawal of all or particular powers of a delegate of the body corporate, such as a Body Corporate Manager with the delegation of the committee and/or executive committee members under section 106 of the Act.

While the withdrawal or restriction of powers from the committee and its members will not result in a financial detriment to the body corporate (ie the owners), if the body corporate has engaged a Body Corporate Manager for a periodic flat fee and variable fees (almost invariably the manner of contracted payment), then the appointment of an administrator with likely identical powers to administer the body corporate, does not affect the liability of the body corporate to pay the fees under its agreement with the Body Corporate Manager. That is, while the administrator will be doing all the work normally carried out by the Body Corporate Manager and the committee, owners will still be liable to pay the Body Corporate Manager’s fees for no work in return.

Accordingly, what I am concerned about, and which has prompted me to make this interim order, is Motion 4 for the appointment of a Body Corporate Manager appearing in the agenda for the extraordinary general meeting to be held on 3 September 2002. The agenda does not have an accompanying voting paper to show whether the motion was proposed by the Hablethwaites, as owners, or the committee.

While the question of the appointment of an administrator has not been determined, nor is it in anyway implied by this order, it is in the interests of all owners if prior to that determination the body corporate does not engage a Body Corporate Manager. Also, I have noted the absence of a voting paper and other aspects of meeting requirements, and that one other motion seeks confirmation by ordinary resolution of a committee membership elected at a meeting voided by Order 119-2002. While I am also not making any determination on these matters, it seems to me that the circumstances are such that the meeting rather than just Motion 4 should not proceed until at least such time as this application is determined by final order.

This matter will now be investigated in accordance with the usual processes undertaken by this office. A final order regarding the application will be made in due course.

Although it is envisaged that this application, and the other outstanding applications for “Maria Creek Estate”, will be determined in the near future, the following general advice in respect of interim orders is given.

All parties should note the provisions of section 225(2) of the Act which provides that -

An interim order -

a) has effect for a period (not longer than 3 months) stated in the order; and

b) may be extended, renewed or cancelled by the adjudicator until a final order is made; and

c) may be cancelled by a later order made by the adjudicator; and

d) if it does not lapse or is not cancelled earlier - lapses when a final order is made by the adjudicator.

All parties should be aware of this section and its effect on this interim order. In particular, the applicant may need to request a renewal of the interim order, before a final order is made. The onus of renewing an interim order rests with the applicant. This office will not automatically renew an interim order.2n