Wilks Street Apartments [2006] QBCCMCmr 219 (3 May 2006)

Last Updated: 19 December 2006

REFERENCE: 0234-2006

ORDER OF AN ADJUDICATOR

MADE UNDER PART 9 OF CHAPTER 6

BODY CORPORATE AND COMMUNITY MANAGEMENT ACT 1997

Number of Scheme:	294
Name of Scheme:	Wilks Street Apartments
Address of Scheme:	89 Wilks Street BUNGALOW QLD 4870

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

the Body Corporate for Wilks Street Apartments

I hereby order that within seven (7) days of the date of this order, Richard Anderson and Allan Nayda shall comply fully with the terms of the notice of the committee for return of body corporate property and all records in accordance with the notice served on them by the Secretary.

STATEMENT OF ADJUDICATOR’S REASONS FOR DECISION - REF 0234-2006

"Wilks Street Apartments" CTS 294

The applicant, the body corporate for Wilks Street Apartments has sought an order of an adjudicator under the Body Corporate and Community Management Act 1997 (the Act) quote:

That in accordance with the notice issued by the body corporate dated 7 March 2006 to Richard Anderson and Allan Nayda they should give to Mr Bill Aabers, Chairperson or Mr Harvie Demitt Secretary and Treasurer the following property belonging to the body corporate.

1. The body corporate property in your possession, including but not limited to, the body corporate seal, body corporate insurance details, all body corporate invoices and receipts, body corporate bank books and statements for all accounts, financial reports and records, in hard copy and Quickbooks body corporate back up file for the period1.04.05 through to the date of handover.
2. All of the body corporate funds (in the form of bank cheque).

The applicant body corporate has also sought an interim order to the above effect.

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) 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.

In any consideration of an application which seeks the making of an interim order, it is necessary to determine at the outset whether, because of the nature or urgency of the circumstances relating to the application, an interim order is in fact necessary or appropriate. The examples included in the Act under section 279(1) are suggestive of the usual circumstances where an interim order might be made. Both examples are in the nature of injunctive relief. Whilst the range of matters which might be the subject of an interim order is not capable of definition, the applicant does need to establish that the circumstances of the application warrant the making of an interim order.

An interim order will not be made, or will be refused, in circumstances where the only urgency relates to the applicant’s desire to resolve or expedite the matters in dispute, or where the nature of the circumstances are such that the matter is not capable of being dealt with in the context of an interim order. Again, it is not possible to define these circumstances. However, given that an interim order may be made ex parte (ie. without reference to, or submission from the respondent named in the matter), then as a guide, where the circumstances or matters in dispute include matters or allegations not capable of objective consideration, or ready determination, or relate to issues of credibility or character, for example, where an interim order would be inappropriate, then the request for an interim order will be refused. It is a matter for an adjudicator to determine in respect of each application.

I am satisfied that this matter warrants urgency. The issue of the return of body corporate records is considered a significant and serious one, given that the committee are entitled to possession of these records in order to be able to carry out its functions, including the calling of required meetings, and the day to day management of the body corporate.

The applicant body corporate has set out the facts of the matter in its grounds, and the named respondents, Messrs Nayda and Anderson have made a submission in response to the application. It is noted there is a history of disputation in this scheme, and there has been a previous application to this office on aspects not unrelated to the present application. Certain aspects of that determination will be relevant to this determination. In particular, it is noted that the adjudicator preferred the validity of a general meeting of the body corporate held on 24 November 2005 to that of another meeting held on 2 November 2005. It is further clear that certain resolutions were carried at the meeting of 24 November 2005 that the respondents obviously dispute, or at the very least, do not agree with. It is noted however that the respondents have not sought to challenge these aspects in an application to this office.

Relevantly, the committee held a meeting on 6 March 2006 whereat it resolved to give notice to the respondents for return of body corporate property and records. This notice was serviced on 7 March 2006. In concluding its grounds, the applicant body corporate states:

The body corporate records have not been returned and the body corporate is unable to hold the AGM within the required time frame. (The applicant body corporate then provides a series of statements indicating how the failure to return records has and is impacting on the body corporate). It is imperative that the AGM be held sooner rather than later, for without the AGM the body corporate will be unable to function in this current year.

The relevant section of the standard module dealing with the return of body corporate records is:

152 Return of body corporate property--Act, s 322
(1) This section applies if--
(a) a person has possession or control of any of the following property (the "specified property")--
(i) a body corporate asset for a community titles scheme;
(ii) a record or other document of a body corporate;
(iii) a body corporate seal; and
(b) the person took possession or control of the specified property in the person’s capacity, or purportedly in the person’s capacity, as--
(i) a member, or an associate of a member, of the body corporate or of the committee; or
(ii) a body corporate manager or service contractor, or an associate of a body corporate manager or service contractor; and
(c) the person is served with a prescribed notice requiring the person to give, within 14 days after the person is served with the notice, the specified property to--
(i) a member of the committee who is named in the notice; or
(ii) if a body corporate manager is acting under a part 3, division 10 engagement--a member of the body corporate who is named in the notice.
(2) The person must comply with the notice.
Maximum penalty--20 penalty units.
(3) The person may not claim a lien on specified property mentioned in subsection (1)(a)(ii) or (iii).
(4) In this section--
"prescribed notice" means--
(a) a notice of a resolution of the committee; or (b) if a body corporate manager is acting under a part 3, division 10 engagement--a notice signed by or for the owners of at least one-half of the lots included in the scheme.

The respondents were members of the body corporate committee before resigning. It is clear from their submission that they still hold the relevant records of the body corporate. They acknowledge that they have been served with the relevant notice. That notice requires the two respondents to return to the chairperson, secretary or treasurer all relevant body corporate records held by them. I conclude that the notice is in order and was duly authorised by the committee at a meeting. The respondent conclude their submission with a statement from the previous order of the adjudicator relating to the importance of the committee and lot owners recognising their obligations under the Act and acting in a manner which ensures that the body corporate is able to fulfil its functions and obligations. The respondents reliance on this particular statement is ironic I suggest given the respondents refusal to comply with a notice served on them which I consider a valid exercise of the committee’s power. Do the respondents think that it is only others that need to recognise their obligations under the legislation and act in a manner which allows the body corporate to fulfil its obligations. These actions would suggest so.

The respondents in their submission have set out a series of reasons which they obviously consider justifies them holding on to the relevant records. These reasons include:

• Not recognising the manager appointed at the meeting held on 24 November;
• Alleged deficiencies in the appointment of the manager;
• Alleged deficiencies in the meeting itself;
• The secretary not correctly elected to the committee based apparently on the alleged invalidity of the meeting;
• The committee meeting held on 6 March 2006 alleged to be invalid.

The respondents further state that "the body corporate has access to all records when requested as per the Act".

Certain of the respondents’ allegations cannot be accepted based on the findings of the adjudicator in order 869 of 2005. This order, with certain reservations, contained findings on certain of the allegations raised above. Clearly, the adjudicator in that application preferred the validity of the meeting held on 24 November to that held on 2 November. I am not prepared to revisit the findings of that order. I conclude that the respondents had an opportunity to make further application to test their above allegations after the making of the previous order. I conclude that it is not appropriate or reasonable for a party to make such allegations as a defence to an application for return of body corporate records. Possession by the committee of body corporate records is pivotal to its ongoing management of the body corporate. If members of a body corporate believe meetings etc to be invalid, then the way to test this or these allegations is by way of application for such determination.

I consider members of the committee have a statutory right to possession of body corporate records, and in circumstances where proper notice for return of records has been given, then those records must be returned, in compliance with that notice. The requirements of the legislation are absolutely clear on this aspect, and are intended to allow the management of bodies corporate to continue by preventing persons from improperly holding only body corporate records. To not support a committee in these circumstances would make a notice for return of records pointless and redundant. Any person in possession of records, and opposed to the committee, could simply allege any basis for refusing the return of records. In the circumstances, the respondents have no basis for not returning body corporate records in that the requirements of section 152 have been satisfied, and I intend to order that accordingly, the respondents must return the property and records immediately. If the respondents thereafter refuse the return of records, the committee will be able to seeking the enforcement of this order, and or the imposition of penalties, in the Magistrates Court.