Bougain-Villea [2002] QBCCMCmr 733 (24 December 2002)

DJ ReardonREFERENCE: 0795-2002

ORDER OF AN ADJUDICATOR

MADE UNDER PART 10 OF CHAPTER 6

BODY CORPORATE AND COMMUNITY MANAGEMENT ACT 1997

Number of Scheme:	995
Name of Scheme:	Bougain-Villea
Address of Scheme:	11 Cavendish Street TOWNSVILLE QLD 4812

TAKE NOTICE that pursuant to an application made under the abovementioned Act by Rosemary Kingsberry, the Body Corporate Manager for the “Bougain-Villea” Body Corporate:

DJ ReardonI hereby order that the owners of each lot included in the Bougain-Villea community titles scheme must each immediately provide Rosemary Kingsberry of Kingsberry Body Corporate Management, with one quarter of the 2ncost of the premium for the Body Corporate’s insurance policy.

I further order that as soon as practicable after receipt of owners' contributions to the insurance premium, Rosemary Kingsberry, of Kingsberry Body Corporate Management, shall pay the premium for the Body Corporate’s insurance policy.
STATEMENT OF ADJUDICATOR’S REASONS FOR DECISION - REF 0795-2002

“Bougain-Villea” CTS 995

1.	Orders sought

The Applicant, the Body Corporate Manager for the “Bougain-Villea” Body Corporate has applied for the following order of an adjudicator under the Body Corporate and Community Management Act 1997 (“the Act”), quote-

“(1) To re-establish FYE (financial year end) to 31 December.

(2) To have proprietors pay an amount of $500/lot in order that insurance cover may be kept current (we are currently in the rain and cyclone season) and other accounts paid until an EGM can be held and management ratified and a budget passed. Insurance due 20/12/02. Proprietors are asking to pay the $500 at our office.”

In accordance with section 225(1) of the Act, 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)).

The “Bougain-Villea” community titles scheme consists of 4 lots, and common property. The community management statement for the scheme indicates that the Body Corporate and Community Management (Standard Module) Regulation 1997 (“the Standard Module”) applies to the scheme.

2.	The Application

This application was made on 23 December 2002. At the outset, I wish to note that there are a number of issues with the application that will need to be addressed by the Body Corporate before a final determination of the application can be made. For example, the application as it currently stands does not raise a dispute within the meaning of section 182 of the Act. However, given that the application appears to concern body corporate building insurance that has already lapsed, the Commissioner has decided to refer the matter to me for consideration for an interim order, notwithstanding the defects in the application. I anticipate that these defects will be addressed after an interim order is issued, and before the application continues to be administered toward a final determination. I note that section 195(1) of the Act provides that the Commissioner may allow an applicant to amend an application at any time before the Commissioner makes an initial case management recommendation.

Given the nature and urgency of the circumstances of the subject matter of the application, that is, lapsed building insurance, the Commissioner has also decided not to give notice of the application to affected parties, or invite affected parties to make a submission about the application before the matter is considered for an interim order. However, I anticipate that proper notice, and an opportunity to make a written submission will be given to affected parties before the application is finally determined.

3.	Subject matter of the application

From the material before me, I understand that the Owners of Lots included in the scheme have purportedly engaged the Applicant to act as Body Corporate Manager for the Body Corporate. It also appears that the body corporate building insurance was due and payable by 20 December 2002, however to date has not been paid. The Applicant has provided a copy of a letter to owners dated 12 December 2002, in which the Applicant requests each owner to immediately pay $500 to meet the cost of insurance and other expenses. While I am unclear on the detail, from the material before me it appears that not all owners have paid the amount.

4.	Interim Orders

At this time, I am solely concerned with the application for an interim order. In any consideration of an application that seeks the making of an interim order, it is necessary to determine whether, because of the nature or urgency of the circumstances relating to the application, an interim order is in fact necessary or appropriate.

The examples included in the Act under section 225(1) are suggestive of the usual circumstances where an interim order might be made. Both examples are in the nature of injunctive relief. Whilst the range of matters that might be the subject of an interim order is not capable of definition, the applicant does need to establish that the circumstances of the application warrant the making of an interim order.

An interim order will not be made, or will be refused, in circumstances where the only urgency relates to the applicant’s desire to resolve or expedite the matters in dispute, or where the nature of the circumstances are such that the matter is not capable of being dealt with in the context of an interim order. Again, it is not possible to define these circumstances.

However, given that an interim order may be made ex parte (ie. without reference to, or submission from the respondent named in the matter), then as a guide, where the circumstances or matters in dispute include matters or allegations not capable of expeditious, and objective consideration, then the request for an interim order may be refused. It is a matter for an adjudicator to determine in respect of each application.

5.	Determination

Division 9 of Part 8 of the Standard Module sets out insurance requirements for bodies corporate. In accordance with this division, bodies corporate must insure common property and body corporate assets (section 127 of the Standard Module), and in the case of a scheme created under a building format plan of subdivision (or a building units plan of subdivision), the body corporate must insure to full replacement value, each building in which is located a lot included in the scheme (section 128 of the Standard Module). In addition, bodies corporate are required to maintain public risk insurance of the common property, and body corporate assets (section 136 of the Standard Module).

In my view, the failure of the Body Corporate to pay the insurance premium on time has placed owners in an unnecessary, and unreasonable position of risk. As such, I intend to order that each owner immediately pay one quarter of the cost of the Body Corporate’s insurance premium to the Applicant. I intend to further order that as soon as practicable after receipt of owner’s contributions, the Applicant shall pay the insurance premium.

While it is not normally the practice of this Office to issue interim orders of this nature, particularly in respect of applications that require amendment and clarification, in my view the extreme nature of the risk currently facing owners while the insurance premium remains unpaid warrants the interim orders I have described.