Bayview Tower [2005] QBCCMCmr 60 (3 February 2005)

Last Updated: 5 July 2005

REFERENCE: 0832-2004

INTERIM ORDER OF AN ADJUDICATOR

MADE UNDER PART 9 OF CHAPTER 6

BODY CORPORATE AND COMMUNITY MANAGEMENT ACT 1997

Number of Scheme:	5458
Name of Scheme:	Bayview Tower
Address of Scheme:	21 Bayview Street RUNAWAY BAY QLD 4216

TAKE NOTICE that pursuant to an application made under the abovementioned Act by

Baron Roland DINTE and Julie Anne DINTE, as the co-owners of Lot 11,

I hereby order that the owner of Lot 3 must disclose this application and this interim order to a prospective buyer of the lot pending determination of the application by final order.

STATEMENT OF ADJUDICATOR’S REASONS FOR DECISION - REF 0832-2004

"Bayview Tower" CTS 5458

The applicants, Baron and Julie Dinte of Lot 11, have sought the following orders of an adjudicator under the Body Corporate and Community Management Act 1997 ("the Act") -

1. That within 28 days from the date of the order, the Body Corporate register a new Community Management Statement amending Schedule E to show that the owners of Lot 11 have exclusive use for car space number 71T and storage number L15 and that Lot 3 shall have exclusive use to car space number 123.

2. All costs associated with the lodging of the new Community Management Statement shall be paid by the Body Corporate.

3. That the time restriction imposed under Section 176 is dispensed with and the reallocation agreement dated 7 November 2002 shall remain in full force and effect.

The applicant has also made application for the following interim order of an adjudicator –

1. "That the owner of Lot 3 shall disclose to any prospective buyer that the exclusive use rights attaching to Lot 3 are currently the subject of a dispute with the Commissioner for Body Corporate and Community Management, in so far as car space 71T and storage number L15 may not be the exclusive use area attached to Lot 3. In its place the exclusive use area may be car park 123.

2. That the owners of Lot 3 be prevented from listing their property for sale, or alternatively the owners of Lot 3 shall not contract with any person or persons for the sale of Lot 3.

3. Any other orders that the Adjudicator may deem fit."

The application for the above interim order was sought at a later date than the application for the above final orders (see under "Jurisdiction").


JURISDICTION:
This is a dispute between lot owners (the applicants of Lot 11) and the body corporate (the respondent) concerning the alleged failure of the body corporate (through an alleged omission by its then (and now) Body Corporate Manager, Stewart, Silver King & Burns (Gold Coast) Pty Ltd) ("SSKB")) to lodge with the Registrar of Titles a request to record a new Community Management Statement ("CMS") incorporating an agreement between two owners to transpose exclusive use car parking spaces and transfer a storage space. This is a matter falling within the disputes resolution provisions of the legislation (see sections 227(1)(b), 228(1)(b) and 276 of the Act) which may be determined by a departmental adjudicator.

Section 279 of the Act provides that an adjudicator may 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. An adjudicator’s order may contain ancillary or consequential provisions the adjudicator considers necessary or appropriate (section 284 of the Act).

General powers of an Adjudicator in making an order:
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 this 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) of the Act). An adjudicator’s order may contain ancillary or consequential provisions the adjudicator considers necessary or appropriate (section 284(1) of the Act).


APPLICATION AND SUBMISSIONS:
Under section 247 of the Act, the requirement to seek submissions from all interested parties may be dispensed with and the application for an interim order dealt with directly by an adjudicator.

In the circumstances of this dispute that course is appropriate.

The application for final orders was lodged and in a form to proceed on 12 January 2005; copies of the application were provided to the relevant parties in accordance with section 243 of the Act, in particular to the body corporate (committee) and to the co-owners of Lot 3, Malcolm Edward CLARK and Norma Christine CLARK, being a party likely to be affected by an order. Each recipient was invited to make a written submission to the application. While still within the time limit for submissions (18 February 2005), the applicants lodged an application for the above interim orders (see later under "Determination" for comments on this further application).

The brief facts of the dispute are as follows.

By agreement dated 7 November 2002 the then owners of Lots 3 and 11 agreed to exchange exclusive use car spaces and for the storage space attaching to Lot 3 to be transferred to Lot 11, with consideration of $55,000 passing from Lot 11 to Lot 3. Car space 71 and storage space L15 of Lot 3 were to be exchanged with Lot 11 for its car space 123 and the payment. The agreement was passed to SSKB who responded by letter dated 20 November 2002 with a copy of the then current CMS for amendment to include the transposition of rights.

The applicant’s state they wrote to the secretary and SSKB on 24 November 2002 accompanied by the amended CMS and an undertaking to pay the associated fees for recording, and that the new CMS was subsequently tabled at the committee meeting of 6 December 2002. The new CMS was never recorded. Upon the sale of Lot 3 in mid-2004 the omission became known. However, both the owner (Ms Connors) and her marketing agent (Mark Gac) have given written statements saying that the buyer, the Clarks, were only ever shown and told that their car parking space was No. 123 and there was no storage space. Also, the Disclosure Statement provided to the Clarks showed No.123 as the relevant car space.

There then followed correspondence between the applicants and SSKB and the body corporate’s solicitors (Short Punch & Greatorix – P Jones), unsuccessfully seeking SSKB remedy the omission by having the transposition recorded. The Clarks then asserted rights over spaces 71 and L15 but offered to relinquish them in return for $3,500 in compensation. This was refused and this application lodged.


DETERMINATION:
"Bayview Tower" was registered as a building units plan (now termed a building format plan) on 28 February 1990 and comprises 110 lots. It is regulated by the Body Corporate and Community Management (Standard Module) Regulation 1997 ("the Standard Module").

In this order I am concerned solely with determining the application for interim orders for the dispute to be disclosed to buyers of Lot 3 or that the Clarks be prevented from listing the lot for sale or contracting with any person for sale of the lot.

I decline to make any interim order that prevents the Clarks from advertising their lot for sale or from actually selling the lot. However, I have a concern that a buyer may purchase Lot 3 without fully comprehending the dispute, leading perhaps to further legal costs for an additional party and for the present three, though I accept the Clark’s advice to the applicants that they always intended to give notice of the dispute to a prospective buyer (see also the Implied Warranties provisions of the Part 3 of Chapter 5 to the Act). With this concern, I am of the view that the possibility of a sale of Lot 3 constitutes urgent circumstances warranting my issuing an appropriate order for the following reasons.

The application for final orders only has ramifications for the applicant owners, the owners of Lot 3 ("the Clarks") and the body corporate. Both of the latter parties were directly served with a copy of the application by this office though neither has yet made a submission. However, the application appears to include copies of most if not all relevant correspondence relating to the dispute between the applicants and the Clarks, through their solicitors Reichman Lawyers (Darron Reichman). Also, the application for interim orders includes a copy of a response from the Clarks dated 24 January to advice given by the applicants that they would be seeking interim orders because the Clarks had expressed an interest to sell their unit.

The interim orders are only of interest to the applicants and the Clarks. In summary, the Clarks have received a copy of the application for final orders and, in particular, written advice foreshadowing the application for interim orders seeking disclosure of the application by them to prospective buyers. That is, the Clarks have knowledge of the dispute from the original application and knowledge of the interim orders and have made a written response setting out their opposition to an interim order relating to disclosure.

Additionally, I consider it is in the interests of all parties that the dispute be resolved promptly and therefore I intend to proceed to an interim order that will positively alert potential buyers to the dispute and the likelihood that their car space will be No. 123 and not as shown in the CMS, on the basis that early determination of the dispute by final orders will mean the interim order will not be in force for more than a few weeks. If they so wish, the Clarks may await that determination before marketing their lot as the final orders will provide certainty as to what exclusive use rights attach to Lot 3 allowing them to advertise and market their lot without the confusion and reluctance that will be generated in the minds of potential buyers by the application remaining on foot for the next 4 months.

While I am not determining the dispute at this time or foreshadowing my final orders, I will say that in the circumstances the facts put by the applicant, an adjudicator has power to require the body corporate to lodge a new CMS for recording showing the transposition and transfer as contained in the agreement for an agreed allocation between the owners of Lots 3 and 11 dated 7 November 2002 (see section 176(1) and Item 2 of Schedule 5 of the Act, and the general powers of an adjudicator referenced under "Jurisdiction").

I would also point out to the parties that an adjudicator has no power, other than in the circumstances described in section 270(3) of the Act relating to vexatious and like applications, to make a costs order. However, orders have been made requiring one of the parties to meet the costs of remedying an omission to perform a duty under the legislation, for example, in these circumstances, for the body corporate to meet the cost of preparing and lodging a new CMS.

I am satisfied that an interim order is necessary for the abovementioned reasons. I have therefore issued an interim order pending determination of the application.

Section 279(2) of the Act provides –

279 Interim orders in context of adjudication
(2) An interim order--

(a) has effect for a period (not longer than 1 year) stated in the order; and
(b) may be extended, varied, renewed or cancelled by the adjudicator until a final order is made; and
(c) may be cancelled by a later order made by the adjudicator; and
(d) if it does not lapse or is not cancelled earlier, lapses when--

(i) the application is withdrawn; or
(ii) the commissioner gives the person who made the application a written notice under section 241 rejecting the application; or
(iii) a final order is made by an adjudicator to whom the application is referred.