Campbell Marque [2004] QBCCMCmr 2 (6 January 2004)

Last Updated: 30 September 2005

REFERENCE: 0661-2003

ORDER OF AN ADJUDICATOR

MADE UNDER PART 9 OF CHAPTER 6

BODY CORPORATE AND COMMUNITY MANAGEMENT ACT 1997

Number of Scheme:	24172
Name of Scheme:	Campbell Marque
Address of Scheme:	21 Campbell Street TOOWONG QLD 4066

TAKE NOTICE that pursuant to an application made under the abovementioned Act by Kenneth Mayes and Carol Mayes, the co-owners of lots 1 and 20

I hereby order that the application by Kenneth Mayes and Carol Mayes, the co-owners of lots 1 and 20 for an order to insert the following motion into the AGM which is to be held on 29 October, 2003, quote - That this body corporate ... not the committee – authorise the legal expenditure of $21227.40 previously spent by the committee from 1st August 2002 to 31st July 2003, and $3376.58 from 1st August 2003 to 10th October 2003 plus $4000 per day for a Barrister for a complicated dispute reference No. 0231-2003 is dismissed.

STATEMENT OF ADJUDICATOR’S REASONS FOR DECISION - REF 0661-2003

"Campbell Marque" CTS 24172

The applicants, Kenneth Mayes and Carol Mayes, the co-owners of lots 1 and 20, have sought the following order of an Adjudicator under the Body Corporate and Community Management Act 1997 (the Act), quote –

... an interim order to insert the following motion into the AGM which is to be held on 29 October, 2003 ...

That this body corporate ... not the committee – authorise the legal expenditure of $21227.40 previously spent by the committee from 1^st August 2002 to 31^st July 2003, and $3376.58 from 1^st August 2003 to 10^th October 2003 plus $4000 per day for a Barrister for a complicated dispute reference No. 0231-2003.

Notes to the Motion

We, the owners of units 1 and 20 recommend that the body corporate owners vote against this motion, so that the committee is responsible for the debt, not the body corporate as this money has been expended without body corporate authority.

The applicants initially requested an interim order to the above effect. On 28 October 2003, the requested interim order was dismissed.

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)).

This application is complicated by the fact of other on-going disputes existing between the body corporate and the applicants. I am somewhat concerned that the applicants are seeking to prevent by this application, the application numbered 0231 of 2003 from proceeding by way of specialist adjudication. The applicants here are the named respondents to that application which seeks, inter alia, the clarification of certain contractual rights and responsibility existing between the parties. If the current application is successful, then presumably that application will not proceed on the basis that the body corporate has not authorised the costs of that application proceeding by way of specialist adjudication. That application has been made by the body corporate against the applicants here.

In their grounds, the applicants state that they seek the order "because the body corporate, that is all owners, have not authorised the present action or the costs thereof, past, present and future". The applicants allege that the committee "do not have approval for the expenditure of this action". The applicants refer to a failed motion 5 declared lost at an EGM held on 8 April 2003. That motion provided that the body corporate "approves the commencement of legal proceedings in a court" against (the Mayes) in relation to the termination of the agreements dated 20 November 2002.

I agree that to commence litigation in a court, a body corporate requires a special resolution. However this is not the case in respect of an application for an order of an adjudicator, which is the venue which the body corporate has commence its current application. This option is available by way of a committee resolution. The applicants allege that "3 members from a possible 7" authorised the action and expense. The applicants have not substantiated their allegation that the committee resolution was ineffective, and I am not prepared to assume that it was. Certainly there is clear support for the action of the committee in submissions by certain owners.

The question of the potential cost to the body corporate arising from the requirement of specialist adjudication arose after the lodgement of application 0231 of 2003. The question of authorisation for legal costs by a body corporate, and its interaction which the requirements of section 104 of the standard module, is a matter which invariably proves difficult. However, in the circumstances, I am not prepared to allow the present application to proceed for a number of reasons.

As I stated in the interim order, I consider that it was within the applicants power to obtain the relief which they are now seeking to obtain by way of an order. Namely that a motion in certain terms be included on the agenda of a general meeting. This was within the applicant’s power to request by way of the submission of a motion for inclusion on the agenda of a general meeting.

Secondly, I am concerned that this application is being used as a tactic by the applicants in their wider dispute with the body corporate. It is clear to me that there is a wider and more serious dispute or disputes between the parties which should and must be resolved. Further, I am concerned that any order I might make in this application in favour of the applicants might prevent the resolution of the real issues in dispute, and simply prolong the disputation between the parties.

Further, I consider that it is not appropriate or possible for me to answer the question of the legitimacy of the application 0231-2003 proceedings in the context of this application. In my view, neither the application nor submissions deal with the issues in such a way that I am confident that a satisfactory resolution of the dispute might be achieved. I consider that the issue the subject of this application might be better argued in the wider proceedings the subject of application 0231 of 2003, but which the applicants are seeking to avoid by this application.

Finally, there are circumstances which might arise (for example, a cost order against the applicants here) whereby the body corporate is not liable for the costs of the specialist adjudicator, such that the requirement of authorisation for the expenditure becomes a non-issue. Consequently, the legitimacy of the making of the order sought is very much in issue.

In all the circumstances, I consider that the circumstances of the current application are not sufficiently meritorious such that the applicants are entitled to succeed in their application. Accordingly this application is dismissed.