Isle of Palms Resort [2004] QBCCMCmr 486 (15 October 2004)

Adjudicator: R.A.I. MYERS
Date: 15^thOctober 2004
Originating Application: Application No 163 of 2004
Application No 610 of 2004

Upon the parties agreeing that both of the Caretaking Agreement, dated 6^th January 1995, and the Letting Agreement, dated 7^th May 1997, between the applicant and the respondents remain on foot pending determination of both applications 163 of 2004 and 610 of 2004 and that the applicant for its part and the respondents for their part without prejudice to their rights and remedies will waive, for the duration of these proceedings only, any entitlement that any of them might have arising out of the disputed exercise of the option to extend those said agreements:-

A. By consent it is directed:-

(a) that the respondent serve the affidavits of:-

i. Warner Banks;
ii. Warner Banks (in response to the statutory declaration of Louise Haynes dated 30^th November 2004);
iii. Richard Paul Ankers;
iv. Amanda Webb;
v. Robin Lesley Stokes and
vi. Dell Linkhorn by 5:00pm 20^th January 2005;
vii. Robert Eastmond by 4:00pm on 21^st January 2005; and
viii. Graham Kawin by 5:00pm on 4^th February 2005.

(b) that the applicant serve its material in response to the respondents’ material by 5:00pm on 11^th February 2005;
(c) that the respondents’ solicitor request that Vitomor Popin provide a statutory declaration, relating to the matters in issue between the parties, to the respondents’ solicitors by 5:00pm on 28^th January 2005.
(d) that the respondents’ solicitors confirm with the Bar Association of Queensland the terms on which the Bar Mediation Centre will be available for the hearing of this dispute in the week commencing 14^th March 2005 and more particularly whether any cancellation fee will be imposed if the current booking is cancelled on 1^st March 2005.
(e) that the applicant’s solicitor inquire of the transcribing service, that has been retained to provide a transcript of the adjudication, of the terms of their engagement and more particularly whether any cancellation fee and, if so, what fee, would be imposed in respect of any cancellation made on 1^st March 2005.
(f) that the status of Mr Popin’s evidence and questions relating to both the venue for the adjudication and the transcription services be reviewed in a telephone conference involving both parties and the specialist adjudicator at 2:30pm on Tuesday 1^st February 2005.
(g) that this application be set down for adjudication before me in the Bar Mediation Centre at 107 North Quay, Brisbane to commence at 10:00am on 14^th March 2005.

B. I do further order:

(h) that the applicant lodge the amended application as provided for in paragraph 3 above within 7 days of this date
(i) that the applicant provide further and better particulars of the alleged defaults as provided for in paragraphs 4 (a), (b), (c), (d) and (e) within 14 days of this date.

RESPONDENT: EASTMOND ENTERPRISES PTY LTD ACN 078 200 165 AND VARINDI PTY LTD ACN 088 750 583

IT IS ORDERED in Application 0163 of 2004 that:-

1. The Applicant file and serve an amended Application on or before 4.00pm on 4^th March 2005 particularising the grounds on which the Applicant intends to rely and the declaratory orders and remedies that it will seek upon the hearing of the Application set down for 14 March 2005.

2. The Respondent file and serve on the Applicant any written objections to the Applicant’s amended Application referred to in paragraph 1 herein on or before 12.00noon 7 March 2005.

3. The Applicant give written notification to the Specialist Adjudicator and the Respondent of the affidavits, statements or any reports (or which parts or paragraphs of those documents) it intends to rely on at the hearing set down for 14 March 2005 on or before 4.00pm 4^th March 2005.

IT IS ORDERED in Application 0610 of 2004 that:-

4. Subject to any objection by the Applicant the Respondent file and serve an amended Application to include reference to the Remedial Action Notice breach for both the Caretaking and Letting Agreements dated 30 November 2004 on or before 4.00pm 4^th March 2005.

5. The Applicant is to file and serve on the Respondent any written objections to the Respondent’s amended Application referred to in paragraph 4 herein on or before 12.00noon 7 March 2005.

6. If the Applicant and/or the Respondent intends to serve any further affidavits, statements or reports which relate to issues arising from the inclusion of the Caretaking and Letting Agreement Remedial Action Notices issued by the Applicant dated 30 November 2004, then that further material is to be filed and served on or before 4.00pm 10 March 2005.

IT IS ORDERED in Applications 0163 of 2004 and 0610 of 2004 that:-

7. The Applications are to be heard the week commencing at 10.00am on 14 March 2005 at Hearing Room 7, Administrative Appeals Tribunal, Level 4, Commonwealth Law Courts, corner Tank Street and North Quay, Brisbane.

8. Costs of both parties be reserved.

1. By Dispute Resolution Application dated 8^th March 2004 the Applicant sought appropriate orders and declarations about the times and duties that the Respondents were required to perform pursuant to the obligations imposed under the Caretaking Agreement for Isle of Palms Resort. On 5^th October 2004 I was appointed to adjudicate that Application and the Respondents’ subsequent Application referred to in paragraph 3.

2. The Applicant’s Application was subsequently amended in accordance with an Order made by me on 24^th January 2005 to include declarations that the Respondents were in breach of both the Caretaking Agreement dated 6^th January 1995 and the Letting Agreement, dated 7^th March 1997. Specifically declarations were sought that the Respondents had failed to remedy or property remedy breaches particularised in several Notices to Remedy Breach.

3. By a Dispute Resolution Application dated 1^st October 2004 the Respondents to the initial application sought declarations that they were not in default of either the Caretaking Agreement and/or the Letting Agreement and sought further declarations that the Remedial Action Notices served by the Applicant were ineffective, void or invalid, that any defaults had been remedied or that the Applicant had waived the necessity for compliance.

4. In addition to the orders touching upon the validity of the contractual arrangements between the Applicant and the Respondents the Respondents sought further orders that they had validly exercised options to renew both the Caretaking Agreement and the Letting Agreement. Orders for specific performance of those agreements or damages in lieu thereof, a mandatory injunction, compelling observation of the terms of the agreement, and declarations that the Body Corporate was acting unreasonably or vexatiously were sought.

5. In effect the matters arising for determination in the cross applications were identical. The Respondents were either in breach of the obligations imposed on them in terms of the Caretaking Agreement and/or the Letting Agreement, in which event the Applicant would have been entitled to succeed on its application. Alternatively, in the event that the breaches had not been made out, the Respondents would have been entitled to the relief sought by them or to at least an order that there were no defaults on their part affecting the subsistence of either the Caretaking Agreement or the Letting Agreement.

6. The Applicant has now elected to abandon that part of its application whereby it sought declaratory relief in relation to the Notices to Remedy Breach. The Applicant acknowledges that it is bound by both the Caretaking Agreement and the Letting Agreement and it has renewed them in accordance with the options exercised by the Respondents.

7. In the premises, in terms of the Applicant’s prayers for relief, whereby it sought declarations that the Respondents were in default of the Caretaking Agreement and the Letting Agreement I dismiss the application.

8. It follows from the Applicant’s failure to prosecute the Application in respect of the alleged defaults that the Respondents are entitled to a declaration that neither Eastmond Enterprises Pty Ltd nor Varindi Pty Ltd are or were at any material time in default of the Caretaking Agreement dated 6^th January 1995 and the Letting Agreement dated 7^th March 1997.

9. The Applicant having acknowledged the Respondents’ exercise of the option to extend both agreements and having acknowledged that it will be bound by the terms thereof, the occasion to consider relief by way of specific performance and/or by way of mandatory injunction does not arise.

10. There remains on foot only the application for a declaration that on a true constructions of the Caretaking Agreement:-

(a) the Caretaker is required to be available on site at all times, twenty four hours a day, seven days per week, and (is required to) respond to residents’ calls within a reasonable period of time; and
(b) in accordance with clause 3(m) of the Caretaking Agreement the Caretaker is required to perform those tasks particularised in the document entitled "Specific Caretaking Duties" dated 13^th October 2003.

11. I direct that the constructions issue be heard on 14^th March 2005 at the Administrative Appeals Tribunal building, North Quay, Brisbane, to commence at 10:00am.

12. I will reserve all questions relating to the costs of both applications for argument and determination at the conclusion of the forthcoming hearing.

.................................................
R.A.I. MYERS
Specialist Adjudicator
11^th March 2005

By Dispute Resolution Application 0163 of 2004, dated 8 March 2004 (as Amended) the Body Corporate sought orders and declarations about the times and duties that Eastmond Enterprises Pty Ltd and Varindi Pty Ltd (hereinafter referred to as "Eastmond") was required to perform pursuant to the Caretaking Agreement dated 6 January 1995 and Letting Agreement dated 7 May 1997 and sought other orders/declarations relating to various Notices of Default including an order for costs of the adjudication and also of the proceedings.

By Dispute Resolution Application 0610 of 2004, dated 1 October 2004 (as amended) Eastmond sought orders and declarations that it was not in default of the Caretaking Agreement as at 1 June 2004 or the Letting Agreement as at 1 July 2004, that it had validly exercised the options to renew the Caretaking and Letting Agreements on 1 June 2004 and 1 July 2004 respectively and sought further orders giving effect to those declarations including an order for the costs of the adjudication and also of the proceedings.

Pursuant to s 276 of the Body Corporate and Community Management Act 1997 (Old), as Specialist Adjudicator appointed to make Orders to resolve the dispute between the above parties,
THE ORDER OF THE ADJUDICATOR IS THAT:

As to Application 0610 of 2004 I declare/order that:
1. Eastmond was not in default of a Caretaking Agreement dated 6 January 1995 and a Letting Agreement dated 7 May 1997 between Eastmond and Varindi and the Body Corporate for Isle of Palms CTS 20860 (hereinafter called "the Body Corporate") on or about 1 June 2004 and 1 July 2004 or at all.

2. Eastmond was not in default of either the Caretaking or Letting Agreement pursuant to the various Remedial Action Notices served by the Body Corporate on Eastmond on 27 February 2003, 16 October 2003,16 December 2003, 30 November 2004 (in respect of the Caretaking Agreement) and 30 November 2004 (in respect of the Letting Agreement) (hereinafter called "the Notices").

3. The Notices in writing dated 1 June 2004 and 1 July 2004 given by Eastmond to the Body Corporate were a valid exercise of options to renew the Caretaking Agreement and Letting Agreement.

4. The Body Corporate enter into a new Caretaking Agreement and Letting Agreement with Eastmond as follows:

a. a Caretaking Agreement with effect from 1 June 2004 in accordance with the provisions of clause 6 of the Caretaking Agreement dated 6 January 1995; and
b. a Letting Agreement with effect from 1 July 2004 in accordance with the provisions of clause 6 of the Letting Agreement dated 7 May 1997.

5. That both parties have liberty to apply on seven (7) days written notice in respect of the carrying out of these declarations/orders including further directions or orders relating to entry into the Caretaking Agreement and Letting Agreement.

As to Application 0163 of 2004, in the orders sought pursuant to the Amended Application from the Body Corporate’s solicitors dated 25 October 2004, I order, in accordance with the reasons for decision dated ii March 2Q05 as follows:

1. I dismiss the Application for a declaration that the Caretakers are in breach of their duties as outlined in the Caretaking Agreement.

2. I dismiss the prayers for declarations sought in the Application relating to Eastmond being in default of the Caretaking Agreement and/or Letting Agreement as sought in orders ito 11 (inclusive) at pages 1 to 8 (inclusive) of that Amended Application.

Further as to Application 0163 of 2004 in respect of reasons for decision delivered 28 April 2005 I dismiss the Application of the Body Corporate with respect to the following declarations sought by the Body Corporate:

1. That the Caretaker pursuant to the Caretaking Agreement with the Body Corporate be available onsite twenty four (24) hours a day, seven days a week and to respond to resident’s calls within a reasonable period of time.

2. That the Caretaker pursuant to the Caretaking Agreement with the Body Corporate open pool gates and toilets at 700am each day and lock the pool gates and toilets at 9.OOpm each day.

3. That the Caretaker pursuant to the Caretaking Agreement with the Body Corporate circuit the grounds of the Body Corporate scheme by foot or by bicycle five times daily between 8.OOam and 9.OOpm on weekends and during school holidays and three times daily between 4.OOpm and 9.OOpm on all other days.

4. The Caretaker pursuant to the Caretaking Agreement with the Body Corporate is obliged to maintain security by observing front gate surveillance tapes and taking action when necessary.

And it is further ordered in respect of Applications 0163 of 2004 and 0610 of 2004 that:
1. The Body Corporate pay Eastmond’s costs of the stenographer, being Clements Reporting Services, for the hearing in the sum of $1,485.55 (GST md within fourteen (14) days of this order.

2. The Body Corporate pay Eastmond’s costs of and incidental to the Provision of the Administrative Appeals Tribunal facilities for the hearing in the sum of $220.00 (GST md) within fourteen (14) days of this order.

3. The Body Corporate pay the Specialist Adjudicator’s costs for both Applications 0163 of 2004 and 0610 of 2004 in the sum of $13,640.00 (GST m as invoiced by the Specialist Adjudicator, within fourteen (14) days of this order.

4. That the costs ordered to be paid by the Body Corporate to Eastmond should not be raised by levy or in any other way by a charge against Lot 180, owned by Eastmond.

5. Both parties be given liberty to apply with three (3) days notice in writing to the other party.

In Application 0163 of 2004 and BY CONSENT OF THE BODY CORPORATE AND EASTMOND THE ORDER OF THE ADJUDICATOR IS THAT:
1. Eastmond is to water the garden areas located on the common property by way of activating the sprinkler system.

As to both Application 0163 of 2004 and Application 0610 of 2004

1. The applicant’s application having been dismissed the respondents seek an order that the applicant pay their costs of and incidental to the proceedings. In seeking that order the respondents rely upon section 280 of the Body Corporate and Community ManagementAct l997which imposes a prima facie obligation on the applicant to pay "the costs of the adjudication" ‘unless the adjudicator otherwise orders".

2. In my view section 280 does invest a Specialist Adjudicator with a discretion to order that an unsuccessful party pay the costs of the successful party in a matter of this kind. I note that my construction of the section was one shared by Mr Hampson of Queens Counsel acting as a specialist adjudicator in the matter of Castlejale Pty Limited and the Body Corporate for Crown Towers Dispute Resolution Application Number 58 of 2004.

3. In opposing the costs order the applicant relied upon the decision of McGill DCJ in Woodrange Pty Ltd V Legrande Broadwater Body Corporate [ QDC 215. His Honour in that case considered the application of Section 280 and concluded, at para 42:-

"...the reference to "a (sic) cost (sic) of the adjudication" is properly seen as a reference to the amount payable to the Specialist Adjudicator, and does not include legal expenses incurred by either party in connection with the adjudication."

4. Section 289 of the legislation confers on an aggrieved person a right of appeal to the District Court, on a question of law. In the premises it is my view that I am bound by the decision of McGill DCJ in this instance. Although I would have made an order for costs against the applicant if I had power to do so, in the premises, I make no additional orders in respect of costs other than those recorded above.

5. The respondent sought a costs order on an alternative basis. In their respective applications both the applicant and the respondents sought orders for the payment of costs. In those circumstances it was contended, by the respondent, that the issue as to which of the parties was responsible for costs was a ‘dispute" within the meaning of that word as defined in section 227 of the Act.

6. I cannot see that a dispute between the parties as to who should ultimately bear the costs of an adjudication can be seen as a "dispute" for the purposes of the Act. The "dispute’ in this instance was whether the respondents were in breach of the obligations imposed upon them by the Caretaking Agreement. Although costs were in dispute to the extent that they were placed in issue by the parties each of whom may well have believed, as I did, that section 280 of the Act conferred a discretion to award costs, that "dispute" does not, in my opinion, entitle me to make a cost’s order unless jurisdiction to do so is conferred by the Act.

7. Section 276 of the Act invests me with jurisdiction to make orders: "to resolve a dispute, in the context of a community title scheme, about --

(a) a claimed or anticipated contravention of this 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 statements; 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 Title Scheme; or

(ii) the authorisation of a person as a letting agent for a community title scheme."

8. Section 276 does not in my view confer any power on me to make an order for costs. I note that this was the conclusion reached by McGill DCJ in Woodrange Pty Limited v Legrande Broadwater Body Corporate supra. With respect I adopt what his Honour said at para 46 of his judgment: "In my opinion, if a statutory body concerned with resolution of disputes, such as a Specialist Adjudicator, is to be given power to make an order in relation to legal professional costs of the adjudication, that power must be conferred expressly or clearly appear. And it does not clearly appear merely because the adjudicator is given power in general terms to make such order as may be just and equitable in order to resolve the dispute."

9. In the premises I dismiss the respective applications for legal professional costs and outlays.

Queensland Body Corporate and Community Management Commissioner - Adjudicators Orders

Isle of Palms Resort [2004] QBCCMCmr 486 (15 October 2004)