Paradise Palms Leisure Villas [2006] QBCCMCmr 17 (10 January 2006)

I, Gary J. Radcliff, Barrister at Law, and Specialist Adjudicator appointed pursuant to the Provisions of Part 8 of the Body Corporate Community Management Act 1997 in respect of Application number 5 of 2006

DO ORDER pursuant to Section 279 of the Body Corporate and Community Management Act 1997 that

1. Until further order or until investigation and resolution of the matters the subject of the Application the Respondent Body Corporate and its members be restrained from terminating the Agreement with the Applicant or in any way implementing the resolutions made at the extraordinary general meeting of the Body Corporate to be conducted at 3:30pm on 10 January 2006;

2. That the extraordinary general meeting be adjourned to 3:30pm on 31 January 2006;

3. That either party shall have liberty to apply on two days’ notice one to the other.

I do further direct:

1. That the Applicant serve copies of the Application and all written material on which it intends to rely in respect of the hearing of this adjudication upon Mr Paul Jones, of Short Punch & Greatorix, solicitors for the Respondent, and upon myself on or before 4 PM on 13 January 2006;

2. That the Respondent serve any response to the Application, and copies of all written material upon which it intends to rely upon at the hearing of this adjudication upon the Applicant and myself on or before 4 PM on 20 January 2006;

3. That the parties participate in a Directions Hearing to be conducted at my Chambers at Level 4, 52 Davenport Street, Southport at 10:00am on 23 January 2006 for the purposes of allocation of time for further viewing of evidence and further submissions if any.

Date 10 January 2006

Gary J Radcliff

I certify this to be a true copy of the Interim Orders made by me in Application number 5 of 2006

Signed

....................................
Gary J Radcliff
Barrister At Law

APPLICANT: SANTED PTY LTD

RESPONDENT: PARADISE PALMS LEISURE VILLAS CTS 7509

Pursuant to the Provisions of Part 8 of the Body Corporate and Community Management Act 1997, I have been appointed Specialist Adjudicator in respect of the issues the subject of Application number 5 of 2006 made by the Applicant against the Respondent in terms of the contents of a dispute resolution Application dated 19 December 2005.

My appointment was made at approximately 4:55pm on 9 January 2006. I am informed by the Applicant in material delivered to me for the purposes of a proposed mediation that it is the intention of the Respondent Body Corporate to conduct an extraordinary general meeting of the Body Corporate later today, the principal business to be discussed being a resolution in the following terms:

(a) terminate the Caretaking Agreement dated 2^nd December 1996 between the Body Corporate and Santed Pty Ltd ACN 082 629 132 (by virtue of assignment) effective as of 14 days after written notice to Santed Pty Ltd ACN (etc)."

"(b) This resolution be implemented by written notice from the secretary to Santed Pty Ltd ACN (etc)."

I have been orally requested by the representative of the Applicant to make interim orders so as to ensure that the Agreement not be so terminated whilst I undertake the investigation and resolution of matters the subject of my appointment.

Applicants Submissions

It is submitted to me by the Applicant that, in the absence of such interlocutory orders, if the business of the extraordinary general meeting of the Body Corporate results in a decision that the Agreement between the parties be terminated, then:

1. The whole purpose for which I was appointed would be rendered nugatory; and

2. The Applicant manager would suffer irretrievable damage.

It is further submitted to me by the Applicant that I would not have power, once the effect of the likely resolution is put in place, to reinstate the parties to their previous positions, should I ultimately determine that this would be an appropriate order.

Respondents Submissions

Immediately prior to my being appointed (at approximately 4:45pm on 9 January 2006) I foreshadowed this difficulty to the representative of the Body Corporate Respondent (Mr Paul Jones of Short Punch & Greatorix).

Mr Jones informed me that whilst he was without instructions in respect of what his client’s attitude would be in respect of any proposed stay, he did not consider that his client would agree to the making of any orders by consent or provision of undertakings to preserve the status quo.

I indicated to Mr Jones that whilst I had no detailed knowledge of the dispute, and whilst I therefore had no preconception of what may be my ultimate findings in respect of the matter, he should be ready to make urgent submissions to me in respect of the grant of a stay or an order of that kind if and when I was so appointed.

Today, at 8:30am, I telephoned Mr Jones to invite him to make such submissions as he considered appropriate as to why interim orders should not be made.

At 10.00am, I received written submissions from Short Punch and Greatorix on behalf of the Body Corporate. They are attached to these reasons.
In paragraph 4 thereof, Mr Jones identifies issues which he identifies as matters prejudicial to his client if it were to be restrained. In view of my decision which is reflected later in these reasons, I am of the opinion that whist there will be some prejudice to the Body Corporate, that is far outweighed by the Applicants likely suffering if interim orders are not made.

Mr Jones protests that he has not been served with the application or the grounds thereof (para1 of the submission. He rightly reserves his client’s position to make further submissions when he is properly appraised of the case he is to meet. My proposed orders accommodate that.

There is some force to his argument (in para5 of his submissions) that the breach complained of is incapable of remedy. He contends that equitable principles will not come to the assistance of the applicant. Accept that this submission was made without his having seen the grounds which are attached to the Application.

Though inelegantly framed, the grounds raise issues of waiver, acquiescence, variation, estoppel, unconscionability and unjust enrichment. All of these require investigation and cannot be summarily disregarded.

Mr Jones contends that "on the face of it Mr Will Jamieson does not have authority to act on behalf of Santed Pty Ltd." (Para2 of the submissions) and as authority, points to a current company search. If he is right about this, then that may be the end of the matter. However, agency may be made out in a number of ways, and this once again must be investigated. Further, the identification of a person as a representative of the company by way of ASIC records is not definitive of the fact. For example section 9 of the Corporations Act defines a director to include persons who are not validly appointed, but who "act in the position of a director" ,and also includes persons who are commonly called "shadow " or "de facto " directors.

Lastly, in para10 of the submissions, Mr Jones correctly points out that the meeting may be allowed to proceed, and any resolutions may be made, providing they are not implemented. I agree, and believe that orders can be made which will ensure this, and at the same time minimise prejudice to the respondent Body Corporate.

After reading and considering his written submissions, I once again invited Mr Jones to provide undertakings on the part of his client such that the status quo would be preserved for a brief period. He informed me that he could not obtain such instructions within the time remaining before the meeting was to commence.

As stated above, the meeting of the Body Corporate will apparently take place at 3:30pm this afternoon.

Pursuant to Section 276 of the Act, I am empowered to make an order that is just and equitable in the circumstances, and, pursuant to sub-Section 2 thereof, such Order may "require a person to act, or prohibit a person from acting in a way stated in such order."

Pursuant to Section 279(1) of the Act, I am empowered to make interim orders "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."

Upon consideration of the legislation, the second example given by the legislation in respect of Section 279(1) of the Act is particularly relevant here. It states:
"The adjudicator may stop a general meeting deciding or acting on a particular issue until it has been investigated and resolved."

The Body Corporate has chosen not to cooperate by providing undertakings which would avoid the necessity of my making any orders. That is the right of the Body Corporate, and by these reasons, I do not criticise the Body Corporate’s conduct in acting in this way. However, in the absence of the Body Corporate demonstrating serious prejudice, and in view of the likely serious prejudice to the Applicant, I believe that it is appropriate in the interim that orders be made to preserve the status quo.

Using the familiar tests that have been discussed on many occasions and authorities such as American Cyanamid Limited v Ethicon Limited (1975) AC402, Active Leisure (Sports) Pty Ltd v Sportsman Australia Limited (1991) 1QDR301, it is clear:

1. That there is a "serious question to be tried";

2. That the balance of convenience favours the grant of interim orders which will preserve the parties’ positions until further order.

Further, it is also appropriate to consider the principles discussed by Megarry J in Erinford Properties Ltd v Cheshire County Council (1974) 1CH261, it was explained that one criteria for considering whether it is appropriate to grant an injunction is the fact that to refuse to grant such an interlocutory injunction would have the effect of bringing to an end the parties’ rights to have a decision of a Court no matter how strong or weak a case ultimately appears to be.

I therefore have ordered that until investigation and resolution of the matter, the Respondent Body Corporate and its members be restrained from terminating the Agreement with the Applicant after the extraordinary general meeting to be conducted at 3:30pm this day and that the extraordinary general meeting be adjourned to 31 January 2006 with either party having liberty to apply on two days’ notice one to the other.

I have further made orders by way of directions as to the conduct of the adjudication, in the hope that a resolution in respect of this substantive matter may be made on or before the date to which the extraordinary general meeting has been adjourned.

Date: 10 January 2006

Signed: ...................................................
G J Radcliff, Barrister at Law

Queensland Body Corporate and Community Management Commissioner - Adjudicators Orders

Paradise Palms Leisure Villas [2006] QBCCMCmr 17 (10 January 2006)