La Pacifique Port Douglas [2003] QBCCMCmr 437 (26 March 2003)

Last Updated: 10 September 2007

P J HANLYREFERENCE: 0636-2002

ORDER OF AN ADJUDICATOR

MADE UNDER PART 10 OF CHAPTER 6

BODY CORPORATE AND COMMUNITY MANAGEMENT ACT 1997

Number of Scheme:	26890
Name of Scheme:	La Pacifique Port Douglas
Address of Scheme:	16 Macrossan Street, PORT DOUGLAS QLD 4871

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

Kent Geoffrey Mainwaring & Alyssa Jane Mainwaring, the co-owners of lot 9



I hereby order that the application for an order instructing the body corporate to exercise its right to terminate a contract entered into by the body corporate namely the "Authorisation of Letting Agent Agreement" dated 31^st May 1999 between the body corporate for La Pacifique Port Douglas and No Worries Management Pty Ltd, is dismissed.




STATEMENT OF ADJUDICATOR’S REASONS FOR DECISION - REF 0636-2002

"La Pacifique Port Douglas" CTS 26890

The applicants, Kent Geoffrey Mainwaring & Alyssa Jane Mainwaring, have sought the following order of an adjudicator under the Body Corporate and Community Management Act 1997 (the Act), quote -

We ask that an order be made instructing the body corporate to exercise its right to terminate a contract entered into by the body corporate namely the "Authorisation of Letting Agent Agreement" dated 31^st May 1999 between the body corporate for La Pacifique Port Douglas and No Worries Management Pty Ltd.

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 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)).

In the supporting grounds, the applicants express the view that the letting agent is discriminating against them in relation to the letting of their lot within the scheme, because the applicants have played a leading role in an owners group formed to address issues in dispute. The applicants also state that the letting agent refuses to follow owners’ instructions in relation to cleaning services carried out in the rented lots. The applicants state that the letting agent is providing daily cleaning services, contrary to the express instruction of owners, who only want the lots to be cleaned weekly, or upon the departure of guests. The applicants further state that cleaning services are provided at the cost of the owners, and daily services significantly deplete the returns to owners. The applicants contend that the letting agent’s actions constitute misconduct under the terms of the letting agreement, and that the body corporate has an obligation to terminate the letting agreement.

Submissions were sought from all owners and from the body corporate committee. Submissions were received from 10 owners, and from the letting agent.

It was evident from the owners’ submissions that frequency of cleaning is a contentious issue in this scheme. Some owners also supported the applicants’ claim that the letting agent had discriminated against them in relation to letting, and others expressed the view that some lots were simply more attractive for letting than others. There was, however, a strong view that the letting agreement should be terminated.

The submission from the letting agent pointed out, amongst other things, that there had been no general meeting of the body corporate at which the issue of termination had been considered, let alone resolved. It was further submitted that it is not the role of an owner to terminate a letting agreement entered into between a letting agent and the body corporate.

Section 85 of the Accommodation Module, by which this scheme is regulated, provides that a person may be authorised as a letting agent only if the authorisation is approved by ordinary resolution of the body corporate. Section 84 of the same module provides the grounds upon which a person’s authorisation as letting agent may be terminated. The termination mechanism, however, must be by a similar resolution to that by which the authorisation was approved, which is, by ordinary resolution of the body corporate.

In this instance, the applicants have not proposed for consideration of owners at a general meeting a motion that the body corporate terminates the authorisation. Whilst it is correct for the letting agent to state that an owner cannot terminate a letting agreement entered into between the body corporate and a letting agent, an owner can propose a motion that the body corporate does so.

Section 223(1)(c) of the Act empowers an adjudicator to make an order about a claimed or anticipated contractual matter about the authorisation of a person as a letting agent, but this power can only be exercised after the body corporate has taken the steps contemplated by section 84 of the Accommodation Module.

I therefore propose to dismiss the application. If the applicants wish to pursue this matter, they should propose an appropriate motion that the body corporate terminates the letting agreement. Under section 39 of the Accommodation Module, a member of the body corporate may at any time submit a motion for consideration at a general meeting. There are certain time constraints in relation to the submission of motions for consideration at the annual general meeting.
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