Le Parc [2003] QBCCMCmr 14 (9 July 2003)

Last Updated: 17 May 2005

REFERENCE: 0292-2003

INTERIM ORDER OF AN ADJUDICATOR

MADE UNDER PART 9 OF CHAPTER 6

BODY CORPORATE AND COMMUNITY MANAGEMENT ACT 1997

Number of Scheme:	308
Name of Scheme:	Le Parc
Address of Scheme:	3 Chester Court MANUNDA QLD 4870

TAKE NOTICE that pursuant to an application made under the abovementioned Act by Henk Eigenhuis and Simone Stockmar, the owners of lot 4

I hereby order that the body corporate is not entitled to recover from the owners of lot 4 Morrow Petersen’s legal costs relating to the removal of the dog from lot 4. I further order that, within 14 days of the date of this order, any levy notices issued by the body corporate to the owners of lot 4 in respect of such legal costs shall be withdrawn. I further order that, within 14 days of the date of this order, any monies already paid by the owners of lot 4 to the body corporate on account of such legal costs shall be reimbursed by the body corporate.

STATEMENT OF ADJUDICATOR’S REASONS FOR DECISION - REF 0292-2003

"Le Parc" CTS 308

The applicants have sought an interim order of an adjudicator under the Body Corporate and Community Management Act 1997 (the Act) as follows:

We apply to stop any legal action and increasing the bill in this matter while everything is sorted out.

Section 276(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 the Act or the community management statement; or

(c) a claimed or anticipated contractual matter about-

(i) the engagement of a person as a body corporate manager or service contractor for a community titles scheme; or

(ii) the authorisation of a person as a letting agent for a community titles scheme.

An order may require a person to act, or prohibit a person from acting, in a way stated in the order (section 276(2)). An adjudicator's order may contain ancillary and consequential provisions the adjudicator considers necessary or appropriate (section 284(1)).

Section 279(1) of the Act allows an adjudicator to make an interim order if satisfied, on reasonable grounds, that an interim order is necessary because of the nature or urgency of the circumstances of the application.

In their supporting grounds, the applicants stated that they could not see the point in paying the legal costs claimed against them as they received the solicitor’s letter on 25 September 2002 advising them that they had to remove their dog within 7 days or else pay costs. The applicants further stated that they removed the dog on 30 September or 1 October, and then vacated the premises themselves on 15 October.

The body corporate committee and the body corporate manager were invited to respond to the application. Neither saw fit to lodge a submission.

I note, from the material provided by the applicants, the following:

• 17 July 2002 letter Cairns Strata Management to applicants requesting removal of dog
• 26 July 2002 letter applicants to Cairns Strata Management requesting consideration
• 26 July 2002 Notice of Continuing Contravention addressed to applicants re dog
• 26 July 2002 letter Cairns Strata Management to applicants advising, amongst other things, that applicants have right to apply in writing to committee to keep dog
• 31 July 2002 letter applicants to body corporate committee seeking approval to keep dog
• 16 August 2002 letter Cairns Strata Management to applicants advising request to keep dog refused by committee, and renewing request to remove dog
• 21 August 2002 letter applicants to Cairns Strata Management requesting that decision be reconsidered

• 23 September 2002 letter Morrow Petersen to applicants advising that they must remove dog within 7 days or further action might be taken against them, which would incur costs.
• 25 September 2002 letter applicants to Cairns Strata Management requesting that they be allowed to keep the dog at the lot until the end of the year and also requesting that CSM contact them instead of involving solicitors
• 27 September 2002 letter applicants to Cairns Strata Management with further information in support of request to keep dog in lot until the end of the year
• 30 September 2002 letter Morrow Petersen, Solicitors, to applicants advising that decision to remove dog is final and requiring that the dog be removed immediately. Further advising that applicants liable for all legal costs incurred.
• 2 October 2002 letter applicants to Morrow Petersen advising that the dog had been removed and that the applicants were also moving out in 1 or 2 weeks. Renewed request to have the dog return for that limited time.
• 4 October 2002 letter Farrellys Lawyers to Morrow Petersen reiterating request made by applicants on 2 October 2002.

The applicants also provided copies of further correspondence between Morrow Petersen and Cusack Galvin & James Solicitors, which addressed the validity of the legal fees sought to be recovered by the body corporate.

The by-laws for this scheme are contained in the community management statement recorded by the Registrar of Titles on 27 July 1998. By-law 14 relates to the keeping of animals and by-law 19 relates to recovery of costs.

The applicants stated in their grounds to the application that the animal in question was removed from the lot on either 30 September 2002 or 1 October 2002. The body corporate did not challenge this assertion, or any of the other assertions made by the applicants in their grounds. I have therefore accepted the information provided by the applicants. The issue with which I am concerned, therefore, is whether the body corporate is entitled to seek recovery of its legal costs from the applicants.

By-law 19 specifically provides:
An owner must pay on demand the whole of the body corporate’s costs and expenses (including solicitor and own client costs), such amount to be deemed a liquidated debt, incurred in:

a) Recovering levies or any other money that the body corporate is entitled to receive from the owner; and
b) All proceedings, including legal proceedings, taken against the owner concluded in favour of the body corporate including, but not limited to, applications for an order by the Commissioner.

In its letter dated 23 September 2002 addressed to the applicants, Morrow Petersen Solicitors stated, in part, as follows:

If your dog is not removed from the scheme land within 7 days, we will seek our client’s instructions to take all necessary legal action, which may include:-

a) proceedings in the Magistrates Court under sections 144 and 146 of the Body Corporate and Community Management Act 1997 (the Act), in which case you would be subject to a maximum penalty of 5 penalty units; and/or

b) application for an order of an adjudicator under Chapter 6, Part 4 of the Act for an order that you remove your dog and keep it away from the scheme land; and/or
c) in the event you fail to comply with an order under sub-paragraph (b) (above), proceedings in the Magistrates Court under section 235 of the Act, in which you would be subject to a maximum penalty of 400 penalty units; and/or
d) application to the District Court for an injunction requiring you to remove, and keep away, your dog from the scheme land.

One penalty unit equals $75.00.

In respect of each of the proceedings mentioned in paragraph 5 above, significant legal costs will be incurred which will be payable by you pursuant to by-law 19(b).
(emphasis added)

The dog was removed on either 30 September 2002 or 1 October 2002, and the applicants notified Morrow Petersen in writing on 2 October 2002. No legal action as outlined in sub-paragraphs (a), (b), (c) or (d) was taken prior to the removal of the dog, nor since. Prior to receipt of Morrow Petersen’s letter dated 23 September 2002, the applicants sought the committee’s approval to keep the dog in their lot. That application was rejected, although I note that no reasons for the rejection were supplied by the committee. I also note that the Cairns City Council confirmed that it would allow one dog to be kept on the premises.

Although Morrow Petersen referred to the applicants’ "unjustified and flagrant breach of the by-laws" in their second letter dated 30 September 2002, an examination of the chronology (above) does not, in my view, support such an assertion. The applicants were first requested to remove their dog on 17 July 2002. The applicants were advised in the body corporate manager’s letter dated 26 July 2002 that they had a right to apply in writing to the committee to keep their dog. On 31 July 2002 the applicants made such an application. Notwithstanding this advice, contained in point 4 of the body corporate manager’s letter dated 26 July 2002, the body corporate manager issued the Notice of Continuing Contravention on the same date requiring the dog to be removed. Having advised the applicants that they had the right to apply in writing to keep their dog, I consider it incongruous to issue a contravention notice on the same date, without waiting, firstly, to see if such an application would be made, and, secondly, whether the application would be successful. Furthermore, the 7 day period allowed under the notice had expired before the committee considered the applicants’ request.

The applicants’ request to keep their dog was refused by the committee, apparently after the committee had considered it under section 143 (as it then was) of the Act. That section of the Act relates to guide dogs. The applicants were not provided with reasons for the refusal, so it is difficult to determine what was meant by the body corporate manager’s statement in her letter dated 16 August 2002 to the applicants that "your application to the committee for the keeping of an animal has been duly voted on as per section 143 of the Act and consent has been denied." If the committee refused the applicants’ request on the basis that only a guide dog could be exempt from a by-law relating to animals, then it completely misapprehended the intent of by-law 14. The fact that by-law 14 was enacted in the first place demonstrates that the committee was intended to have the discretion to consent to an animal being brought onto a lot. The committee was entitled to exercise its discretion and refuse the application, but in my view it should have provided reasons for so doing.

The applicants sought reasons for the refusal, and also requested reconsideration of their application, all to no avail. Their attempts to discuss the matter by telephone were apparently rebuffed, when the body corporate manager told them that they must communicate in writing. Their letters dated 21 August 2002, 25 September 2002 and 27 September 2002 to the body corporate manager were unanswered. They had not received any prior notice that the matter was to be referred to the body corporate’s solicitors, however, upon being advised by Morrow Petersen of the steps that could be taken against them if they failed to remove the dog, they did so as requested. I do not regard the applicants’ behaviour up to that point as being demonstrative of "unjustified and flagrant breach of the by-laws". In my view they were doing no more than exercising their right to seek the body corporate’s consent to keep their dog in their lot. Whilst the applicants’ ignorance of the by-laws prior to purchasing their lot is no defence to their having purchased the dog without first obtaining consent, an unjustified and flagrant breach of the by-laws would, in my view, have been evidenced if the applicants had completely disregarded the first letter dated 17 July 2002 from the body corporate manager and taken no further action to obtain the necessary consent. Instead they wrote numerous letters and made telephone calls in an attempt to resolve the issue over a period of almost two months, until they received Morrow Petersen’s ultimatum on or about 25 September 2002.

I do not propose to allow the body corporate to seek payment of its legal fees from the applicants. Firstly, no proceedings as foreshadowed in Morrow Petersen’s letter dated 23 September 2002 were ever taken against the applicants. Secondly, the applicants removed the dog within the time frame allowed under that letter (allowing for delivery of the letter). The letter clearly stated that they would be liable for legal costs incurred if any of the proceedings detailed in paragraphs 5(a)-(d) in the letter were to be commenced. The letter did not state that they would be liable for the body corporate’s legal costs to that date. The question of costs already incurred by the body corporate was raised in Morrow Petersen’s letter dated 30 September 2002. In my view, by-law 19 does not permit recovery of costs on the material before me. I propose to order accordingly.

In the circumstances, it is not intended to invite further submissions regarding this matter, or to make a further order, since this decision, though an interim one as sought by the applicants, is final in its determination of this matter. If any party considers that an appeal of this decision is warranted, then they should appeal the interim order.