Il Villaggio [2005] QBCCMCmr 215 (19 April 2005)

Last Updated: 12 July 2005

Number 0215/2005 Applicant Jane Marie Lamason Respondent Body Corporate for "Il Villaggio" CTS ORDER

1. I order that the body corporate pay to the applicant the remuneration it would normally receive pursuant to the management agreement dated 12 October 2000 for the month of February 2005 within four (4) business days. 2. I direct that any party or lot owner wishing to make any submission about the matters raised in the application give notice of such intention within seven (7) working days. 3. I direct that the body corporate send to each lot proprietor at the address shown on the role a copy of these orders and reasons. 4. I give each party and any lot proprietor liberty to apply to me in writing for any additional order that should be made in accordance with these reasons. 5. The costs of this application be reserved.

P.J. Favell

Specialist Adjudicator

19 April 2005

Number 0215/2005
Applicant Jane Marie Lamason
Respondent Body Corporate for II Villaggio CTS

By a dispute resolution application dated 22 March 2005 the applicant seeks eight outcomes numbered in paragraph 5 of the application.

Those outcomes include:

(a) a mandatory injunction directing the body corporate to meet the payment of the applicants remuneration under the terms and conditions of the management agreement dated 12 October 2000 for the month of February 2005;
(b) that pursuant to clause 13 of the management agreement the body corporate nominate one member of the body corporate committee to liaise with the applicant;
(c) that any notice provided by any other member of the body corporate committee to the applicant or any instruction provided shall have no effect and the applicant shall not be bound to acknowledge any such notice or instruction;
(d) that the body corporate refrain from issuing frivolous vexatious and or misconceived breach notices;
(e) the applicant shall only be obliged to meet the member the body corporate committee nominated under clause 13 of the management agreement once every three weeks at a time and on a date suitable to both parties;
(f) that at least two days prior to any meeting referred to in the previous order the authorized member shall provide the applicant with an adequately particularized agenda of matters to be discussed at the meeting; and
(g) that in all future dealings with the applicant the body corporate shall be required to act reasonably and in good faith.

Those outcomes are reflected in orders sought by the applicant.

It appears from correspondence sent to the Office of the Commissioner from Mahoney Lawyers that the applicant seeks an urgent interim order. So much was not set out in the application but given that indication I am prepared to consider whether an interim order should be made.

Section 265 of The Body Corporate and Community Management Act 1997 provides for the adjudication of particular disputes by a specialist adjudicator including contractual matters which are defined in Schedule 6.

The Body Corporate and Community Management Act 1997 in section 276 allows an Adjudicator to whom an application is referred to 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 title scheme. Some orders I may make are set out in schedule 5. I am not restricted to those orders. I am able to require persons to act in a way stated in an order about the exercise of rights or powers under the Act and claimed or anticipated contractual matters about the engagement of a person as a body corporate manager or service contractor.

Section 279 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 to which the application relates.

The basis for an interim order being sought is contained in a letter dated 30 March 2005 from Mahoney Lawyers to the Office of the Commissioner for Body Corporate and Community Management in which it is said:

"with respect to the application, our client has sought an urgent interim order in relation to the payment of her entitlements under the terms and conditions of the management agreement with the body corporate for "Ii Villaggio". If our client is not paid her entitlements pursuant to the management agreement, she will suffer severe hardship and will be unable to adequately discharge her obligations as required by the agreement."

On 18 April 2005 supplementary submissions for the application for an urgent interim order were received from Mahoney Lawyers in the following terms:

I. As stated in the applicant’s application, the Body Corporate for B Villaggio has refused to meet the payment of the applicant’s remuneration for the month of February 2005 in accordance with the terms and conditions of the Management Agreement.
2. The decision not to meet the payment of the applicant’s remuneration was not determined by the Body in a general meeting but rather was a result of a unilateral decision by the Secretgary for the Body Corporate Committee.
3. It is respectfully submitted that any decision to withhold the applicant’s remuneration would amount to a purported variation to the tmers and conditions of the Management Agreement, without the consent of the Applicant.
4. In the absence of the applicant’s agreement, the Body Corporate is only entitled to amend the terms and conditions of a Management Agreement by the passage of an ordinary resolution. Section 87 of the Body Corporate and Community Management (Standard Module) Regulation
5. In this circumstance, any decision by the Body Corporate Committee or the Body Corporate Committee Secretary to withhold the applicant’s remuneration is invalid and therefore, it is respectfully submitted that the Body Corporate should be directed to meet the payment of the applicant’s remuneration immediately.

On that basis I am prepared to consider whether a interim order should be made in the terms that the body corporate be directed to meet the payment of the applicants remuneration under the terms and conditions of the management agreement dated 12 October 2000 for the month of February 2005.

The management agreement dated 12 October 2000 by clause 2 obliges the body corporate to pay the applicants remuneration by way of calendar monthly installments in arrears:

"Remuneration of Manager

2. In consideration of the performance by the manager of the duties has herein set out the body corporate shall pay the manager the remuneration as set out in the schedule hereto by means of calendar monthly installments in arrears. The remuneration payable under this agreement is not for the provision of any letting service which the manager may provide to owners of units".

Clause 3 of the management agreement provides for the duties of the manager.

For the purposes of considering whether an interim order should issue in the terms set out above, I have assumed the following facts to be correct:

(a) By deed of assignment dated 30 October 2003 the applicant was assigned the management rights for "II Villaggio".

(b) The management rights are contained in the management agreement provided to me dated 12 October 2000 between body corporate for "II Villaggio" Community Title Scheme 28518 and Arthur Neville Harvey.

(c) Clause 8 of the management agreement provides for termination by the body corporate and clause 9 provides for termination otherwise.

(d) Clause 12 provides for arbitration; and

(e) Clause 13 provides for the giving of instructions from the body corporate to the manager.

(f) Clause 13 provides:

"(a) the body corporate shall from time to time authorize one of its members to give instructions to and communicate with the manager on behalf of the body corporate and not more than one (1) member of the body corporate at any time shall be given such authority. (b) the manager will confer fully and freely with the representative of the body corporate if so requested relative to the performance of the duties of the manager herein set forth and shall at the request of the representative of the committee of the body corporate attend by its authorized representative meetings of the committee members of the body corporate. The representative of the manager shall be entitled to be heard on any relevant question or matter at any such meeting".

The schedule referred to in the body corporate agreement by paragraph I provides:

"1. During the first twelve (12) calendar months of the term hereof the sum of forty thousand dollars ($40,000.00) per annum (or such greater sum as the body corporate may from time to time agree upon but without any obligation to do so);

2. At the expiration of each year the said remuneration shall increase by which ever is the greater of five percent (5%) or by the same percentage as the rise in the all group consumer price index for Brisbane in the State of Queensland occurring from the date of the quarter ending closes in time to the date of the commencement of the proceeding year to the date of the quarter ending closes in time to the date of the expiration of the proceeding year after the commencement of the year hereof"

In the application it is asserted that

"at no time since taking an assignment of the management rights has the applicant been provided with any notice from the body corporate or the body corporate committee that any representative of the body corporate committee has been provided with the authorization specified in clause 13 of the management agreement."

I have been provided with a letter dated 18 March 2005 signed by Toni Leigh the apparent chair person of "II Villagio" addressed to the resident unit manager. That letter outlines a number of items that require attention from January andlor February 2005. It requests that the matters outlined be actioned within 14 days. The letter then contains the following:

"Failure to carry out these duties will result in our body corporate incurring losses as a result of the body corporate having to pay someone else to perform your duties. In this case the body corporate will set off the amount of such loss against your February remuneration."

The letter referred to occasions on which it was said a notice to remedy had been issued by the body corporate and asserted that on 15 February 2005 the body corporate wrote to advise that a satisfactory response had not been received and that the resident unit manager was in breach of the management and letting agreements. Without determining the merit or otherwise of the complaints or of any responses to those allegations I note that the remuneration is in consideration of the performance by the manager of the duties set out in clause 3. Clause 8 provides for the termination of the agreement by the body corporate by notice in writing to the manager in the event that the manager fails or neglects to carry out the duties pursuant to the agreement without good reason and such failure or neglect shall continue for a further period of 28 days after notice in writing shall have been given to the manager specifying the duty which the manager has failed or neglected to carry out and calling upon the manager to perform such duty. I do not see anything in the agreement which allows for there to be a set off nor for remuneration to be withheld subject to the statement that the remuneration is in consideration of the performance of the duties.

I have taken into account the five matters set out in the supplementary submission.
Without making any final determination of any of the matters raised in the application in my opinion it is appropriate to make an interim order directing the body corporate to meet the payment of the applicant’s remuneration for the month of February 2005. I so order. Because of the nature of this order and the material available to me I give liberty to apply on 2 days notice concerning this order. So that all of the matters sought can be determined I have made directions accordingly.


P J Favell
Specialist Adjudicatory
19 April 2005

ORDER Number 0215/2005 Applicant Jane Marie Lamason Respondent Body Corporate for Il Villaggio CTS

I further direct that the Body Corporate send to each lot proprietor at the address shown on the roll a copy of these orders and reasons. I direct that the applicant and any party or lot owner wishing to make a submission about the matters raised in the submissions on behalf of the Body Corporate give notice of such intention within seven (7) working days of receipt of these orders and reasons. Further, I order that any written submissions on behalf of the applicant by way of response to the submissions made on behalf the Body Corporate be lodged with the Office of the Commissioner for Body Corporate and Community Management within twenty-eight (28) days of receipt of these orders and reasons. Further, I order that there be liberty to apply generally and in particular for further directions after seven (7) days of the receipt of any of the submissions on behalf of the applicant in reply. I give each party and any lot proprietor liberty to apply to me in writing for any additional order that should be made in accordance with these reasons. I order that the further costs of this application be reserved.

P J Favell
Specialist Adjudicator
9 June 2005

I, Paul Favell hereby certify that this is a true and correct copy of my
order made 9 June 2005.

DECISION



Number 0215/2005

Applicant Jane Marie Lamason

Respondent Body Corporate for Il Villaggio CTS

On 31 May 2005 I was provided with copies of submissions received in the Office of the Commissioner for Body Corporate and Community Management with respect to this matter. I have read and considered those submissions which include a submission dated 20 May 2005 by Grant and Katalin Brown, an email dated 3 May 2005 from Christine Weatherby and an email from Domingo Martinez dated 25 May 2005 all to the effect of supporting the resident managers position.

I have also been supplied with submissions from Mr Scott Guthrie of Dibbs Barker Gosling Lawyers, Solicitors for the Body Corporate for Il Villaggio. Those submissions are dated 25 May 2005 and are in their body twelve pages in length. Attached to them are a number of attachments.

The submissions on behalf of the Body Corporate adopted and rely on the recital of facts set out in paragraphs 2.1 to 2.6 of the Applicants submissions and further to clause 2.2 of the applicants submissions make reference to clauses 3, 4 and 5 of the Management Agreement. They also make reference to clause 3(v) which was inserted into the Management Agreement by an extraordinary general meeting of October 2002. The submissions assert that Schedule A to the submissions forms part of the Management Agreement as an aid to interpretation and amounts to a "reasonable direction" of the Body Corporate "in and about the administration and management" of the premises within the meaning of clause 3(k) of the Management Agreement and therefore requires compliance against the applicant.

It is further asserted that during negotiations with the applicant at the time of assignment of the Body Corporate Agreement in October 2003 the applicant provided the Body Corporate with answers to "questions for prospective buyers" which document it is said is incorporated into the Management Agreement and therefore forms part of the Management Agreement.

The submissions also claim that during negotiations with the applicant the Body Corporate agreed with the applicant that it would rectify the standard of the premises at its cost. Works which were included are set out in paragraph 2.7 of the submissions. It is said that the estimated cost to the Body Corporate to undertake the works was in the order of $45,000.00.

It is submitted that although there was no formal resolution passed by the Body Corporate Committee authorizing one representative pursuant to clause 13 of the Management Agreement to be the contact point, nevertheless any correspondence or notices to remedy issued by the secretary were issued in her capacity as secretary and therefore represented a communication from the Body Corporate directly. I am referred to annexure 5 to the submissions which are said to be a true copy of the by-laws of the Body Corporate.

It is asserted on behalf of the Body Corporate that it is entitled to withhold the applicant’s remuneration by way of setoff for the damages incurred by reason of the applicant’s breach of the Management Agreement. Further, it is said, contrary to paragraph 2 of the applicant’s supplementary submissions the decision not to meet the payment of the applicants remuneration was determined by unanimous resolution of the committee on 1 April 2005 and was not a unilateral decision by the secretary. To support the latter contention I am referred to annexure 6 which is said to be a true copy of the resolution as passed and annexure 7 as a true copy of the minutes of the meeting. The resolution I have been referred to reads as follows:

"that the motion is recording a vote of no confidence in the resident manager in respect of her lack of communication with the committee executive and specifically her failure to respond to the chair persons correspondence of 18 March 2005 consequently, the Body Corporate will pay someone else to perform the duties and set off the amount of the Body Corporate loss against the resident managers remuneration. The minutes records such a vote of no confidence was carried unanimously."

It seems to me that the resolution referred to is not a resolution not to meet the payment of the applicants remuneration (even if it was properly made).

It is also asserted that the applicant has evinced an intention to no longer be bound by the Management Agreement by reason of the applicant’s continuing and successive breaches from the inception of the Management Agreement. It is asserted that throughout the entire term of the Management Agreement the applicant has been in breach by failing to adequately carry out her duties.

Paragraph 5 of the submissions details the alleged "major areas of failure" of the manager to carry out her duties properly.

Given the extent of those matters it is appropriate that the applicant be given the chance to respond and I think in the circumstances, if sought, the chance to have oral argument.

It seems to me that there is a question of whether there is a repudiation of the Management Agreement by the applicant and if that is so the consequences of any such repudiation.

Further, there is a real question as to the Body Corporate’s entitlement to withhold payment for the reasons claimed in paragraph 8.2.

There may well also be a question as to the terms of the Management Agreement.
I note that in paragraph 8 the Body Corporate has now nominated the chairman as the contact person for the applicant within the Body Corporate.

Orders and Directions

Because of the matters raised as outlined above and my orders of 19 April 2005 I direct that the Body Corporate provide to the applicant a copy of the submissions provided to the Office of the Commissioner for Body Corporate and Community Management.

I further direct that the Body Corporate send to each lot proprietor at the address shown on the roll a copy of these orders and reasons.

I direct that the applicant and any party or lot owner wishing to make a submission about the matters raised in the submissions on behalf of the Body Corporate give notice of such intention within seven (7) working days of receipt of these orders and reasons.

Further, I order that any written submissions on behalf of the applicant by way of response to the submissions made on behalf the Body Corporate be lodged with the Office of the Commissioner for Body Corporate and Community Management within twenty-eight (28) days of receipt of these orders and reasons.

Further, I order that there be liberty to apply generally and in particular for further directions after seven (7) days of the receipt of any of the submissions on behalf of the applicant in reply.

I give each party and any lot proprietor liberty to apply to me in writing for any additional order that should be made in accordance with these reasons.

I order that the further costs of this application be reserved.


P J Favell
Specialist Adjudicator
9 June 2005

I, Paul Favell hereby certify that this is a true and correct copy of my
order made 9 June 2005.