Broadwater Tower [2002] QBCCMCmr 599 (27 September 2002)

P J HANLYREFERENCE: 0411-2002

ORDER OF AN ADJUDICATOR

MADE UNDER PART 10 OF CHAPTER 6

BODY CORPORATE AND COMMUNITY MANAGEMENT ACT 1997

Number of Scheme:	9041
Name of Scheme:	Broadwater Tower
Address of Scheme:	17 Bayview Street RUNAWAY BAY QLD 4216

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

Bruce John Maxwell, the owner of lot 19



I hereby order that the body corporate shall within 7 days of the date of this order refund to the applicant, Bruce John Maxwell, the owner of lot 19, the sum of $508.21 being the amount of discount disallowed by the body corporate on the payment of levies for the October 2001 and January 2002 quarters.

STATEMENT OF ADJUDICATOR’S REASONS FOR DECISION - REF 0411-2002

“Broadwater Tower” CTS 9041

The applicant, Bruce John Maxwell, has sought the following order of an adjudicator under the Body Corporate and Community Management Act 1997 (the Act), quote -

Refund of A$508 imposed for two “late payments” of body corporate levies in circumstances as described – attached.

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 provides the background to his payment of levies for the October 2001 and January 2002 quarters, and encloses copies of relevant correspondence, both by facsimile transmission and e-mail.

The body corporate committee and the body corporate manager were invited to respond to the application, and did so through a submission from the body corporate manager. In that submission, the body corporate manager confirmed the exchange of correspondence with the applicant, and confirmed that the committee had formed the view that there were no extenuating circumstances such as to warrant the reinstatement of the lost discounts.

I do not propose to set out all of the details provided by the applicant and confirmed by the body corporate manager, as those details are well known to all parties. Suffice to say, the evidence is that the applicant attempted to pay his October 2001 levy after having received the redirected notice when he was overseas. A series of unfortunate events followed. Firstly the initial cheque sent by the applicant from Malaysia did not arrive in Australia, in spite of having been despatched by the Malaysian equivalent of Air Express. Secondly, after later learning of its non-arrival, the applicant despatched a replacement cheque, which was misdelivered in Australia to a firm of solicitors, which in turn forwarded it to its intended destination. All of these matters were out of the control of the applicant. In the meantime, the applicant quite properly made an approach to the committee seeking reinstatement of the lost discount, having been advised of its loss in the January 2002 levy notice. The committee decided not to reinstate the lost discount, but in the meantime the applicant had paid the January 2002 levy and once again lost the discount for that period, because of the carry-over of the previous lost discount, on the basis that the sum paid by him was first applied to the arrears (the October 2001 lost discount), thereby making the January 2002 payment short. During all of this, the applicant continued to travel extensively throughout the world, thereby further complicating the resolution of the matter.

Sections 99(4) and 99(5) of the Standard Module provide as follows:

99 Payment and recovery of contributions

(1) ...

(2) ...

(3) ...

(4) If an owner is liable for a contribution, or an instalment of a

contribution, and a penalty, an amount paid by the owner must be paid first

towards the penalty and then in reduction of the outstanding contribution or

instalment.

(5) If the body corporate is satisfied there are special reasons for

allowing a discount of contribution, or waiving a penalty, the body

corporate may allow the discount, or waive the penalty in whole or part.

Firstly, I consider that the decision to disallow the discount for the January 2002 quarter was incorrect. As can be seen, section 99(4) of the Standard Module provides the formula for applying an amount paid by an owner if the owner is liable for an instalment of a contribution, and a penalty. In this instance, the disallowed discount was not a penalty. A penalty is specifically, and separately, provided for in section 98 of the Standard Module. It was instead a disallowed discount. Discounts for timely payment are provided for in section 97 of the Standard Module. Therefore, in my view, the carryover of the disallowed discount should simply have been shown as the outstanding amount, but the payment by the applicant of the January 2002 quarter in the sum of $1016.50, being the discounted amount payable for that quarter, should have been credited in full to that quarter, thereby leaving the only outstanding balance after that payment of the disallowed discount from the October 2001 quarter.

Secondly, I consider that the applicant did show extenuating circumstances in relation to the late payment of his October 2001 levy. The exchange of correspondence demonstrates to me that the applicant was genuinely attempting to pay his levy, and, whilst he was unable to follow the initial instruction from the body corporate manager to deposit directly into the body corporate account through the National Australia Bank, he was following the alternative instruction to post a cheque. The fact that that cheque did not arrive, presumably because of the unreliability of the Malaysian postal service, of which the applicant has had some experience, and the second cheque was misdelivered by Australia Post was completely out of the applicant’s control. Furthermore, there is no evidence that the applicant is an habitual “late-payer”.

I have therefore ordered that the body corporate refund to the applicant the sum of $508.21, being the amount of the two disallowed discounts, which he had subsequently paid in his April 2002 levies.

I note that the body corporate is endeavouring to set up a system to allow owners to pay their levies by alternative methods, including Bpay, which should ensure that such difficulties as experienced by the applicant are avoided in the future.2n