The Mediterranean - East Tower [2004] QBCCMCmr 74 (6 February 2004)

Last Updated: 30 September 2005

REFERENCE: 0069-2004

INTERIM ORDER OF AN ADJUDICATOR

MADE UNDER PART 9 OF CHAPTER 6

BODY CORPORATE AND COMMUNITY MANAGEMENT ACT 1997

Number of Scheme:	15901
Name of Scheme:	The Mediterranean - East Tower
Address of Scheme:	220 The Esplanade, North Burleigh QLD 4220

TAKE NOTICE that pursuant to an application made under the abovementioned Act by Braigh Holdings Pty Ltd, the caretaking service contractor and letting agent

I hereby order that the body corporate shall allow the applicant, Braigh Holdings Pty Ltd, a further period of twenty-one (21) days from the date of this order within which to remedy the alleged breach of its caretaking and letting agreements detailed in the letter dated 23 January 2004 from Herdlaw Solicitors to the applicant’s solicitors, Hickey Lawyers.

STATEMENT OF ADJUDICATOR’S REASONS FOR DECISION - REF 0069-2004

"The Mediterranean - East Tower" CTS 15901

The applicant, Braigh Holdings Pty Ltd, has sought an interim order of an adjudicator under the Body Corporate and Community Management Act 1997 (the Act) as follows:

An order restraining the Bodies Corporate for the Mediterranean – North Tower CTS 15617 and The Mediterranean – East Tower CTS 15901 ("the Bodies Corporate") from terminating caretaking and letting agreements which they have with the applicant, subject to final orders made in this application.

The applicant has also sought final orders as follows:

A declaration that the applicant is not in breach of the caretaking and letting agreements which it has with the bodies corporate;

A declaration that Leo Hanrahan and Michelle Hanrahan ("the applicant’s nominees") submitted as the applicant’s nominees to the bodies corporate have the capability to perform their obligations and duties under the caretaking and letting agreements to a suitable standard;

A declaration that the consent of the bodies corporate is not required as a pre-condition to appointment of the nominees by the applicant;

A declaration that the applicant is not in breach of clause 5(f) of the letting agreements or clause 7(f) of the caretaking agreements by appointing Leo Hanrahan and Michelle Hanrahan as its nominees;

An order directing the bodies corporate to approve Leo Hanrahan and Michelle Hanrahan as the applicant’s nominees;

An order that the bodies corporate be permanently restrained from terminating the caretaking and letting agreements based on a purported technical default by the applicant dated 23 January 2004, the date upon which the bodies corporate informed the applicant that it had refused consent to the nominees.

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)).

Section 279(1) of the Act allows an adjudicator to make an interim order if satisfied, on reasonable grounds, that an interim order is necessary because of the nature or urgency of the circumstances of the application.

The application was received by facsimile transmission in the Commissioner’s office at 12:59pm on 4 February 2004. The application was referred to me by the Commissioner under section 247 of the Act on 6 February 2004. Given the applicant was required by the body corporate to remedy the alleged breach of its caretaking and letting agreements by 5.00pm on 6 February 2004, I am satisfied that the application warrants urgent consideration, even though notice of the application has not been given, and all persons entitled to make submissions about the application have not had the opportunity to make submissions.

At 2.15pm on 6 February 2004 I conducted a teleconference with the solicitors for the applicant, Mr Michael McDonald and Mr Joe Welch, both of Hickey Lawyers, and with the solicitor for the body corporate, Mr Robert Herd, of Herdlaw Solicitors.

Mr Herd had not had been provided with a copy of the application, but stated that he was aware of the issues which had given rise to it.

The background to the application has been set out in the material accompanying it. I do not propose to repeat all of that information here. The body corporate and all affected parties will in due course receive, or have access to, that material, and will have the opportunity to respond to it.

In summary, the dispute that has arisen relates to the appointment by the applicant of its nominee under clause 7(a) of the caretaking agreements and clause 5(a) of the letting agreements, and the refusal by the body corporate to approve that appointment. In consequence of its refusal, the body corporate has written to the applicant on 23 January 2004 placing it on notice that it is now in breach of clause 7(f) of the caretaking agreements and clause 5(f) of the letting agreements and requiring the applicant to remedy the alleged breach by 5.00pm on 6 February 2004.

On 30 January 2004, the applicant’s solicitors wrote to the body corporate’s solicitors denying that the applicant was in breach of its obligations under the agreement, but, pending resolution of that issue, and without admission of the applicant’s alleged default, requesting the body corporate’s consent to the appointment of an alternative nominee. Certain information was provided to the body corporate in support of the further request, and the body corporate then sought some additional information by letter dated 4 February 2004, but did not extend the deadline imposed in the letter dated 23 January 2004.

During the course of the teleconference, the parties acknowledged that the ultimate resolution of the dispute was required to be conducted by a specialist adjudicator under section 265 of the Act.

The parties also acknowledged that any termination of the caretaking and letting agreements could only occur if owners had considered an appropriate motion to that effect, by secret ballot at a general meeting in accordance with the requirements of the Act.

I do not consider that sufficient time has been afforded to the applicant to provide the additional material requested by the body corporate’s solicitors in their letter dated 4 February 2004. I propose to order that the body corporate shall allow the applicant, Braigh Holdings Pty Ltd, a further period of twenty-one (21) days from the date of this order within which to provide that material, and thereby remedy the alleged breach of its caretaking and letting agreement.