Malathion [2003] QBCCMCmr 363 (3 February 2003)

Last Updated: 7 September 2007

REFERENCE: 0601-2002

ORDER OF AN ADJUDICATOR

MADE UNDER PART 10 OF CHAPTER 6

BODY CORPORATE AND COMMUNITY MANAGEMENT ACT 1997

Number of Scheme:	5046
Name of Scheme:	Malathion
Address of Scheme:	9 Elwood Court BURLEIGH WATERS QLD 4220

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

Ronald Rispen, the Owner of Lot 1,

I hereby declare that the Owner of Lot 2, is liable to pay a contribution of $300.00 as levied by the Body Corporate at the annual general meeting held on 13 August 2002.

I hereby order that upon receipt of the contribution of the Owner of Lot 2, the Body Corporate shall reimburse the Owner of Lot n1 the amount of $150, that being the extra contribution made by the Owner of Lot 1 around 14 September 2002, to meet the cost of the Body Corporate’s insurance premium.
STATEMENT OF ADJUDICATOR’S REASONS FOR DECISION - REF 0601-2002

"Malathion" CTS 5046

1.	Order sought

The Applicant, a Co-owner of Lot 1, has sought an order of an adjudicator under the Body Corporate and Community Management Act 1997 ("the Act") requiring the Owner of Lot 2 to make a financial contribution to the Body Corporate, as set at an annual general meeting held on 13 August 2002.

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 the Act or the community management statement; or
c)	a claimed or anticipated contravention of the terms of, 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)).

2.	The "Malathion" community titles scheme

The "Malathion" community titles scheme consists of 2 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.

3.	Administration of this application

This dispute resolution application was made on 30 September 2002. On 9 October 2002, the Commissioner for Body Corporate and Community Management ("the Commissioner") invited the Owner of Lot 2 to make a written submission about the application. To date, the Owner of Lot 2 has declined to make a written submission about the application.

On 12 November 2002, the Commissioner made an initial case management recommendation that the application should be the subject of dispute resolution centre mediation. Unfortunately, the Dispute Resolution Centre was unsuccessful in arranging a mediation session with the parties.

On 3 December 2002, the Commissioner made a supplementary case management recommendation that the application should be resolved by departmental adjudication.



At my request, staff members of this Office endeavoured to organise a meeting of the Owners of Lots 1 and 2, and myself at the Offices of the Department of Natural Resources and Mines at Bundall. My main motivations for organising this meeting were to gather information in respect of the application, and more importantly, to endeavour to assist the parties come to a mutually acceptable resolution to the issues raised in this application. Regrettably, a meeting could not be organised.

On 28 January 2003, a staff member of this Office contacted the Applicant on my behalf and requested copies of particular documents relating to the Body Corporate’s insurance. The Applicant provided the requested material under cover of a letter dated 29 January 2003.

Unfortunately, due to the Owner of Lot 2 failing to make a written submission about the application, and the unsuccessful attempts of this Office to convene a meeting, I am forced to make an order determining this application without any real input from the Owner of Lot 2. In my view this is contrary to both the personal interests of the Owner of Lot 2, and the potential of this Body Corporate to operate harmoniously in the future. However, I am not prepared to delay determining this application further.

4.	Matters in dispute

On 12 June 2002, an adjudicator determined a previous application relating to the "Malathion" Body Corporate (reference 0162-2002) by appointing the Applicant as an administrator for the purposes of convening an annual general meeting of the Body Corporate.

I understand that the meeting authorised by the above order was held on 13 August 2002. The Applicant has provided a copy of the minutes this meeting. It is apparent from the minutes that while the Co-owners of Lot 1 were present at the meeting, the Owner of Lot 2 did not attend. However, notwithstanding the absence of the Owner of Lot 2, it is my view there was a quorum at the meeting. In this regard, I refer to section 48(2)(b) of the Standard Module, which provides that if the number of voters for a meeting is less than 3, there must be at least 1 individual personally present at the meeting to form a quorum. I consider that this requirement was properly satisfied.

In my view, the agenda for the meeting, as set out in the notice material and minutes, addresses largely routine matters necessary for the day-to-day operation of the Body Corporate. For example, the agenda includes motions concerning contributions from owners, election of committee members, budgets and insurance.

I note that at the meeting, the Body Corporate resolved to open a bank account in the name of the Body Corporate. I also note that the Body Corporate resolved to levy a $300 contribution from each lot. The Body Corporate also resolved to pay the premium for the Body Corporate’s insurance policy with CGU Insurance Limited ("CGU").

From the material before me, I understand that the Applicant contributed $300, which was deposited into the newly opened Body Corporate account. It appears that the Owner of Lot 2 has failed to contribute the $300 as struck at the annual general meeting of 13 August 2002.

I have before me a copy of a renewal invitation provided by CGU to the Body Corporate, issued on 21 August 2002. The premium payable was $426.46 (including GST and Stamp Duty), due by 20 September 2002. It appears that as the Owner of Lot 2 failed to pay her contribution, there was not enough money in the Body Corporate account to meet the insurance premium. It also appears that around the 14 September 2002, the Applicant deposited a further $150 into the Body Corporate account so that a cheque could be drawn to pay the insurance premium. The Applicant has provided a receipt dated 16 September 2002 confirming that the insurance premium of $426.46 was received by CGU.

5.	Determination

From the material before me, I consider that the issues raised in this application are simple. The Body Corporate has convened an annual general meeting, authorised by an adjudicator’s order, and made reasonable resolutions concerning the day-to day operations of the Body Corporate. I consider that the failure of the Owner of Lot 2 to attend the meeting, appoint a proxy of other representative to attend the meeting, or to submit a written voting paper for the meeting, in no way detracts from the validity of the Body Corporate’s resolutions made at the meeting.

In my view, the failure of the Owner of Lot 2 to pay her contribution as set out the annual general meeting is not reasonable. The insurance of the building, which is both a legislative requirement and one of the most basic and important safeguards for owners, was potentially put in jeopardy by the failure of the Owner of Lot 2 to pay her contribution. While the Applicant was under no obligation to "top up" the Body Corporate’s account to meet the cost of the insurance premium, I consider that in doing so, the Applicant has acted prudently and properly.

Unfortunately, strictly speaking, I do not have the authority to make the order sought by the Applicant, that is, to compel the Owner of Lot 2 to pay her contribution. Rather, as section 99(1) of the Standard Module provides that the Body Corporate may recover unpaid contributions as a debt, the continuing failure of the Owner of Lot 2 to pay her contribution is a matter that should be pursued by the Body Corporate in a court of competent jurisdiction.

However, I do wish to state to the Owner of Lot 2 that she should promptly provide the Body Corporate Secretary (the Applicant) with $300 cash, or a cheque for $300.00 made out to the "Body Corporate for Malathion CTS 5046". In this way the Owner of Lot 2 will belatedly fulfil her responsibility as a lot owner in this instance. I intend to make a declaration clarifying that the Owner of Lot 2 is liable to pay the $300 contribution as set at the meeting.

Upon receipt of the contribution of the Owner of Lot 2, the Applicant is entitled to a refund of the extra $150 he contributed to meet the insurance premium. I intend to order that once the contribution from the Owner of Lot 2 is received, the Body Corporate shall reimburse the Applicant this amount.