Kings Row North [2003] QBCCMCmr 324 (14 January 2003)

Last Updated: 7 September 2007

RA MeekREFERENCE: 0525-2002

ORDER OF AN ADJUDICATOR

MADE UNDER PART 10 OF CHAPTER 6

BODY CORPORATE AND COMMUNITY MANAGEMENT ACT 1997

Number of Scheme:	11397
Name of Scheme:	Kings Row South
Address of Scheme:	18 Commodore Drive PARADISE WATERS QLD 4217

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

Philip Vincent King, the owner of lot 39



RA MeekI hereby order that the application by Philip Vincent King, the owner of lot 39 for an order that the body corporate committee for Kings Row South cease all action in respect of and refrain from taking any further action to introduce and withdraw the present direction to members, relating to a multi-choice levy payment scheme supplied by "Challenge Strata Management" and / or "Strata Pay Services" as set out in the letter of demand dated 1 July 2002, is dismissed. n
STATEMENT OF ADJUDICATOR’S REASONS FOR DECISION - REF 0525-2002

"Kings Row South" CTS 11397

The applicant, Philip Vincent King, the owner of lot 39, has sought the following order of an adjudicator under the Body Corporate and Community Management Act 1997 (the Act), quote -

That the body corporate committee for Kings Row South cease all action in respect of and refrain from taking any further action to introduce and withdraw the present direction to members, relating to a multi-choice levy payment scheme supplied by "Challenge Strata Management" and / or "Strata Pay Services" as set out in the letter of demand dated 1 July 2002 ... until such time as all body corporate members are provided with complete information concerning all costs, charges and fees relating to the use of the "Strata Pay System and until all body corporate members are given the opportunity to register, in accordance with the provisions of the Act, their vote at a general meeting of members of the body corporate.

Section 223(1) 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)).

I have considered this application and concluded that it is lacking in substance. I therefore intend to dismiss it under section 220(2) on the basis that it is without substance. I personally, and this office generally, do not have the resources to embark on an exhaustive investigation of the myriad of allegations made by the applicant. Further, such investigation would be of no benefit since I conclude that the essentially basis of the application is flawed.

In essence, the applicant alleges that the body corporate adopted a system for the payment of contributions which the body corporate in general meeting, nor the committee approved. The applicant alleges this is in breach of section 92 of the Act. Specifically, the applicant alleges that the system proposed is in breach of the legislation in that it prevents him from making payments to the body corporate, and instead requires him to pay his levies to an entity called "Stratapay".

On the wider question of whether the body corporate approved the introduction of the "Stratapay Multiple solution payment service" utilised by the body corporate manager, Challenge Strata Management, I conclude that the system is basically an administrative arrangement for the payment of contributions. I do not consider there is any basis on which the body corporate need to specifically approve or adopt this system. It is the system used by the body corporate manager in the operation of that business. The body corporate must authorise the engagement of the manager; however it do not need to similarly authorise and adopt each and every business system employed by that manager. To require this would be absurd. Managers have a right to manage their businesses in the most cost effective method. If a body corporate objects to a particular system employed by their manager, the body corporate should do so specifically. It is then for the parties, the body corporate and the manager, to determine a solution. Depending on the extent to which the particular system is integral to the operation of the manager’s business, the manager may or may not be agreeable to changes in the system to accommodate the particular body corporate.

On the specific issue of the alleged inability to make cheques payable to the body corporate and not "Stratapay", I do not conclude that this aspect is contrary to the legislation. The legislation is largely silent on these very specific issues of how contributions are paid. This is necessarily so given the increasing array of payment options which are now available to all organisations. To restrict a body corporate to the old days of a cheque payable to the body corporate is simply unrealistic.

I conclude that this office would only consider intervening in issues of payment methods of contributions if there were an allegation that the methods allowed were very restrictive and for example, required all owners to pay by credit card only or pay only on the internet. This would clearly be unfair to certain owners. The system in question offers an array of seven possible payment options.

The obligation of the body corporate, whatever system the body corporate manager employs or whatever payment option is used by owners, is to ensure that section 100(5) of the Standard Module is complied with –

All amounts received by the body corporate for the credit of the administrative or sinking fund must be paid into 1 or more accounts kept solely in the name of the body corporate at a financial institution.

Finally, I do acknowledge that the manager has mislead owners to some extent in the advice it has provided to them regarding the "Stratapay" system. In the Challenge circular of 1 July 2002 to unit owners, the writer states –

... If you pay your levies by posting a cheque / money order to the Locked Bay address you must make your remittance payable to "Stratapay" and include the bottom section of your levy notice.

In a letter to the committee in reply to this application, the manager widens this advice. He states –

... The circular does not "demand" nor even imply, that owners can only pay their levies through Stratapay. Any owner is, and will at all times remain free to remit their cheque / money order to our office if they wish, and whether drawn in favour of "Stratapay" or in the name of their body corporate.

The manager’s subsequent statement is not correct. The circular does state that if paying by cheque, you must make it payable to Stratapay. I suggest that it is probably easier administratively for the manager if the cheque is payable to Stratapay, rather than the name of the body corporate. However this is not a satisfactory excuse for giving incorrect information to owners. I suggest that the committee circularise all owners with the next general meeting notice a correction of this aspect, and advise that cheques / money orders payable to the body corporate are acceptable, as stated by the manager is his letter to the committee of 13 September 2002.
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