Isle of Palms Resort [2005] QBCCMCmr 238 (5 May 2005)

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

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.

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 11 March 2005 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 1 to 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 7.OOam 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 800am and 900pm on weekends and during school holidays and three times daily between 400pm and 900pm 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 incl) 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 incl) 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 incl) 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 Management Act 1997 which 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 [2004] 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 [2005] QBCCMCmr 238 (5 May 2005)