Sirocco Resort [2003] QBCCMCmr 337 (20 January 2003)

Last Updated: 7 September 2007

RA MeekREFERENCE: 0553-2002

ORDER OF AN ADJUDICATOR

MADE UNDER PART 10 OF CHAPTER 6

BODY CORPORATE AND COMMUNITY MANAGEMENT ACT 1997

Number of Scheme:	29591
Name of Scheme:	Sirocco Resort
Address of Scheme:	53 The Esplanade, MOOLOOLABA QLD 4557

TAKE NOTICE that pursuant to an application made under the abovementioned Act by the body corporate for Sirocco Resort

RA MeekI hereby order that, for the purposes of applying section 83(3) of the Accommodation Module, the date on which the engagement of Flamala Pty Ltd as service contractor and authorisation of that company as a letting agent was entered into (the "contract date"), was 6 September 2001.
STATEMENT OF ADJUDICATOR’S REASONS FOR DECISION - REF 0553-2002

"Sirocco Resort" CTS 29591

The applicant, the Body Corporate for Sirocco Resort, has sought the following order of an adjudicator under the Body Corporate and Community Management Act 1997 (the Act), quote -

A declaration that, for the purposes of section 83(3) of the Accommodation module, the date on which the body corporate for Sirocco Resort entered into the service contractor’s agreement and the letting agreement with Flamala Pty Ltd was 23 September 2001.

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)).

It is not necessary to restate the grounds to this application in any detail. The facts relating to the application are not in dispute. Rather, what is required is a determination of the meaning of "contract date" in section 83(3) of the Accommodation Module. In particular, whether the term refers to the date the relevant agreement was entered into or alternatively, the date when the operation of the agreement commences. In the present application, the date of the engagement of the service contractor and authorisation as a letting agent was 6 September 2001, whereas, the commencement date of both agreements was 24 September 2001. The agreements are proposed to be, or have been assigned, and presumably it is necessary to determine the correct date so that the correct percentage can be applied to determine the transfer fee.

In terms of the current application, the body corporate is proposing that the "contract date" is the date when the engagement commences, rather than the date of the actual agreement. In contrast, the service contractor, Flamala Pty Ltd, submits that the "contract date" is the date on which the engagement was entered into.

Section 83 of the Accommodation module provides -

83 Payment of amount on transfer [SM, s 85]
(1) This section applies to an engagement of a person as a service contractor, or the authorisation of a person as a letting agent, if--
(a) section 107(3)17 of the Act applies to the engagement or authorisation; and
(b) the engagement or authorisation is not the result of the exercise of an option by the service contractor or letting agent under the terms of the engagement of the person as a service contractor, or the authorisation of the person as a letting agent, contained in a previous engagement or authorisation for the scheme; and
(c) the approval of the body corporate is sought to the transfer of a person’s rights under the engagement or authorisation.
(2) The body corporate may require, as a condition of approving the
transfer, that the transferor under the transfer pay the body corporate an
amount (the "relevant amount").
(3) The body corporate may require the payment of the relevant amount only if the date (the "approval date") on which the body corporate approves the transfer is not more than 3 years after the date (the "contract date") on which the engagement or authorisation was entered into, or on
which the term of the engagement or authorisation was extended.
(4) The relevant amount is the relevant percentage of the amount representing fair market value for the transfer.
(5) The relevant percentage is--
(a) if the approval date is not more than 1 year after the contract date--3%; or
(b) if the approval date is more than 1 year, but not more than 2 years, after the contract date--2%; or
(c) if the approval date is more than 2 years, but not more than 3 years, after the contract date--1%.
(6) The body corporate may not require the payment of the relevant amount if--
(a) the transferor is a financier under section 10918 of the Act who is acting under the provisions of the financier’s charge over the engagement or authorisation; or
(b) the transferor is seeking approval to the transfer on the basis of genuine hardship not reasonably foreseeable by the transferor at the contract date.
(7) The relevant amount must be paid into the body corporate’s sinking fund.

The body corporate submits that –

... it was clearly the intention of Parliament that the yearly periods referred to in Section 83(5) ... run from the start date of the engagement of service contractor or authorisation of the letting agent notwithstanding the date of the actual agreement between the body corporate and the relevant parties is either before or after the start of the term.

Flamala Pty Ltd submits that –

By inserting the identifying tag "contract date" into Section 83(3) of the module it is submitted that it was the intention of the legislatures ... that the phrase "the date on which the engagement or authorisation was entered into" is the "contract date" of the engagement and / or authorisation not the commencement date of the term of the engagement or authorisation.

Both parties have provided further elaboration of their position, however I do not intend to set this out here. I consider that the correct interpretation of the phrase "contract date" as used in section 83(3) is that the contract date is the date the relevant agreement or agreements were entered into, and not the date when the agreements are stated to commence.

Firstly, this I consider to be the clear and unambiguous meaning and intention of the wording of the subsection itself. It states "... after the date ... on which the engagement was entered into". There can be no doubt in my view that this refers specifically to the date of the relevant agreement, and not to a particular date stated in the agreement when such agreement is to commence.

Secondly, in other sections in part 6 of the module (Ss. 78, 79, 80 and 81), the legislature specifically refers to "the term of the engagement or authorisation ...". If the legislature had intended "contract date" to mean the date when the term of the engagement commences, then in my view, section 83(3) would have used very similar phraseology, quote -

"... after the date ... on which the term of the engagement or authorisation commences ..."

I have ordered that the contract date of the engagement as service contractor and authorisation as a letting agent of Flamala was the 6 September 2001. n