Douglas Port [2003] QBCCMCmr 579 (17 June 2003)

Last Updated: 12 September 2007

REFERENCE: 0786-2002

ORDER OF AN ADJUDICATOR

MADE UNDER PART 9 OF CHAPTER 6

BODY CORPORATE AND COMMUNITY MANAGEMENT ACT 1997

Number of Scheme:	23695
Name of Scheme:	Douglas Port
Address of Scheme:	12 Tamarind Close, NERANG QLD 4211

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

Tracey Ann Deans, the Owner of lot 1

I hereby order that, within 14 days of the date of this order, the owners of lot 2, Douglas Perry Mackenzie and Maxine Kathleen Mackenzie, shall pay the sum of $200.00 to Tracey Ann Deans, by way of reimbursement to Ms Deans of their share of monies paid by her to effect building and public liability insurance on behalf of the body corporate.


STATEMENT OF ADJUDICATOR’S REASONS FOR DECISION - REF 0786-2002

"Douglas Port" CTS 23695

The applicant, Tracey Ann Deans, has sought an order of an adjudicator under the Body Corporate and Community Management Act 1997 (the Act) that the owners of lot 2, Douglas and Maxine Mackenzie) pay their half share of the body corporate insurance, which has been paid in full by Ms Deans in the sum of $445.25. Ms Deans has also sought an order that she be appointed chairperson of the body corporate.

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)).

In her supporting grounds, Ms Deans stated that she had been required by her financier to take out an insurance policy for the body corporate, as it had not been attended to previously. Ms Deans further stated that Mr and Mrs Mackenzie have refused to hold a meeting to discuss the matter. On this basis, Ms Deans requested that she be appointed chairperson.

Mr and Mrs Mackenzie were invited to respond to the application. In their submission they refuted a number of the statements made by Ms Deans, and stated that they were advised by their seller that no body corporate existed and they were at liberty to "do their own thing". They further stated that they look after their own insurances etc. The Mackenzies advised that they would not, under any circumstances, accept Ms Deans holding any position "should the long defunct body corporate be exhumed."

I conducted a telephone conference with Ms Deans and Mr Mackenzie on 11 June 2003. I explained to Mr Mackenzie that, contrary to the advice he had been given by the seller of his lot, and by the agent, and it appears by his solicitor, the body corporate was established and has continued to exist from the time that the group titles plan (now called a standard format plan) was registered (sections 24, 30 and 31 of the Act). I further explained to Mr Mackenzie that the body corporate, which is comprised of the owners of the 2 lots, was required to insure the building to its full replacement value, because a building on lot 1 has a common wall with a building on lot 2 (section 129 of the Body Corporate and Community Management (Standard Module) Regulation 1997). In addition, the body corporate was required to maintain public risk insurance of the common property (section 136 Standard Module).


Finally, I explained to both parties that membership of the committee was governed by section 11(4) of the Standard Module, which provides that where there are two lots in the scheme and the 2 lots are in different ownership, the committee consists of 2 individuals who are owners and they must decide between themselves who are to hold the positions of the executive members of the committee (and if they cannot agree, the positions of the executive members of the committee are held jointly by both of them.)

As the insurance of the buildings has been paid in full by Ms Deans, I advised Mr Mackenzie that I intended to order that he reimburse Ms Deans half of the cost involved, up to the limit of major spending for this scheme, which is $400.00. Mr Mackenzie enquired whether Ms Deans should have obtained a second quote for the insurance, because the cost was in excess of $400.00. I advised him that section 104 of the Standard Module required that a second quote be obtained, but that in the circumstances described by Ms Deans, namely that her financier required the insurance be put in place as a matter of urgency, I accepted that she had little choice but to take out the insurance and pay for it herself after Mr Mackenzie’s refusal to pay his half share. I noted that it was most unfortunate that various people had misled Mr Mackenzie when he first purchased his lot, as his response to Ms Deans may have been quite different if he had realised that he and Ms Deans were members of the body corporate, and building and public liability insurance was required to be taken out in the name of the body corporate.

I also discussed the future management of the scheme with the parties. I advised that it was in their interests to have the body corporate placed on a proper legal footing, with an annual general meeting being held, budgets adopted, contributions levied, a roll of members available and a maintenance programme (limited though that may be, given that this is a standard format plan) put in place. Mr Mackenzie stated that he did not wish to have any contact with Ms Deans, and intimated that he and his wife may sell their lot later this year. I pointed out that in such circumstances, it would be most important to have the body corporate placed on a proper footing, as an incoming buyer would undoubtedly wish to inspect the books and records of the body corporate. I observed that the parties might wish to discuss the possibility of appointing a body corporate manager to obviate the necessity for contact between them.

I also advised the parties that the Commissioner’s office provides an information service, which can be contacted on FREECALL 1800 060 119.

In addition, I have appended to this order, copies of information pamphlets, which may be of some assistance to the parties.