Il Villaggio [2006] QBCCMCmr 308 (14 June 2006)

Last Updated: 19 December 2006

REFERENCE: 0439-2006

INTERIM ORDER OF AN ADJUDICATOR

MADE UNDER PART 9 OF CHAPTER 6

BODY CORPORATE AND COMMUNITY MANAGEMENT ACT 1997

Number of Scheme:	28518
Name of Scheme:	Il Villaggio
Address of Scheme:	24 Radan Street, SUNNYBANK HILLS QLD 4109

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

T Leigh and V Ivett, the Owner(s) of lots 24 and 31

I hereby order that the application for interim orders is dismissed.

STATEMENT OF ADJUDICATOR’S REASONS FOR DECISION - REF 0439-2006

"Il Villaggio" CTS 28518

The Application

The applicants, Toni Leigh and Val Ivett, are the owner and co-owner of lots 31 and 24 respectively, in the Il Villagio Community Titles Scheme (Ill Villagio). Il Villagio is a 40-lot scheme whose regulation module is the Accommodation Module (Body Corporate and Community Management (Accommodation Module) Regulation 1997).

The applicants are concerned with the financial health of the Body Corporate; in particular, they are concerned that existing funds in the administrative fund are insufficient for projected expenditure. This application runs parallel and builds on an application lodged by the applicants in February 2006. The applicants have made a number of requests to the managers of Il Villagio – TEYS Strata [Brisbane] Pty Ltd – relevant to their concerns.

The applicants are seeking interim orders that:

1. A general meeting of the Body Corporate be held within 30 days of the date of this order pending a final determination that the financial position necessitates the calling of a general meeting.
2. The Body Corporate provide the applicants requested copies of body corporate records within 7 days of the date of this order.
3. The Body Corporate provide members with current financial records to include projected cash flows and expenditure commitments for the next 6 months within 14 days of the date of this order.

Section 276(1) of the Body Corporate and Community Management Act 1997 (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 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. Section 279 of the Act goes on to provide examples where an interim order might be made. The examples are in the nature of injunctive relief. Whilst the range of matters that 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 matter in dispute.
An interim order will not be made 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 ( that is, without reference to, or submission from the respondents named in the matter) where the circumstances or matters in dispute include matters or allegations not capable of expeditious and objective consideration, then the request for an interim order may be refused.

In terms of the orders sought by the applicants, there are logistical difficulties with the outcomes sought. The second and third orders seek two classes of documents; "requested documents" and current financial records to include "projected cash flows and expenditure commitments for the next six months".

The class of documents covered by the generic term "requested documents" is not clearly defined. The applicants have provided correspondence between themselves and the Body Corporate Managers dated in April and May 2006 where they request answers to a relatively large number of questions and request a smaller number of documents most of which appear to have been supplied upon request.

The parties all appear aware of the requirements of section 205 of the Act: this section states:

205 Information to be given to interested persons

(1) This section provides for the giving of information by the body corporate for a community titles scheme from the body corporate’s records.

(2) Within 7 days after receiving a written request from an interested person accompanied by the fee prescribed under the regulation module applying to the scheme, the body corporate must--

(a) permit the person to inspect the body corporate’s records; or
(b) give the person a copy of a record kept by the body corporate.

Maximum penalty--20 penalty units.

(3) However, the body corporate is not required to allow a person to inspect or obtain a copy of a part of a record under subsection (2) if the body corporate reasonably believes the part contains defamatory material.

(4) The body corporate must, within 7 days after receiving a written request from an interested person accompanied by the fee prescribed under the regulation module applying to the scheme, issue a certificate (a "body corporate information certificate") in the approved form giving financial and other information about the lot.

Maximum penalty--20 penalty units.

(5) A person who obtains a certificate under subsection (4) may rely on the certificate against the body corporate as conclusive evidence of matters stated in the certificate, other than to the extent to which the certificate contains an error that is reasonably apparent.

(6) In this section--
"interested person" means--
(a) the owner, or a mortgagee, of a lot included in the scheme; or
(b) the buyer of a lot included in the scheme; or

(c) another person who satisfies the body corporate of a proper interest in the information sought; or

(d) the agent of a person mentioned in paragraph (a), (b) or (c).

It is not clear from the applicants’ material what documents remain outstanding and if so, why their access could not continue to be pursued through the legislated processes.

The request that the Body Corporate provide members with ‘projected cash flows and expenditure commitments for the next six months’ is similarly problematic in nature.
There is no information before me that the Body Corporate has performed this analysis. This analysis is usually performed closer to the time of the Annual General Meeting as part of the budgetary processes for the administrative and sinking funds. If the analysis does not exist presently, there is no information before me that the Body Corporate could produce an analysis within the requested two-week timeframe.

It strongly appears that the orders sought concerning Body Corporate documents are little more than an ‘educated fishing expedition’ which seeks to obtain corroborative material for the applicants’ argument of financial incompetence by the current Managers.

This purpose is indicated by the first order being sought by the applicants. The first order is circular in nature. The applicants want an urgent order for a general meeting pending a final order for a general meeting if their document research necessitates that meeting. It appears that the final order sought will be a declaration that there are irregularities with the finances of the Body Corporate. That is by no means a given at this point in time having regard to the information before me.

It is simply not clear what the applicants are trying to achieve through this first order. It is not clear what is intended to be discussed at the first general meeting in ’30 days’ time. It is also not clear why a second meeting then needs to take place at some unspecified future date. What would be the point of these meetings if, for the sake of argument, the research shows that the applicants’ concerns are unwarranted?

Finally, it is not clear why the process set out in section 59(1) of the Body Corporate and Community Management (Accommodation Module) Regulation 1997 is not available to the applicants; this section states:

59 Requirement for requested extraordinary general meeting [SM,s 61]

(1) An extraordinary general meeting (a "requested extraordinary general meeting") of the body corporate must be called if a notice asking for an extraordinary general meeting to consider and decide motions proposed in the notice is--
(a) signed by or for the owners of at least 25% of all the lots included in the scheme; and

(b) given to the secretary or, in the secretary’s absence, the chairperson or, if the committee has not yet been chosen, given to the original owner.

My decision

The applicants have provided no information on the ‘nature or urgency of the circumstances’ that could support an application for interim orders. There is no information before me that there would be an adverse impact arising from a decline to grant an interim order other than the passing of time. There is no suggestion that in the absence of an interim order records will be lost. The applicants have not stated that any significant action is impending that would require an urgent order. There is no suggestion that any person’s rights will be affected in the absence of an order.

The applicants’ material suggests that the ‘urgency’ of the matter is that the applicants feel that their concerns are not being dealt with expeditiously. It strongly appears to me that the applicants are in fact simply seeking expedited final orders. This is not the purpose of interim orders which by their nature seek to preserve a status quo that is would be otherwise affected by a person’s actions. Moreover, I find that the applicants’ orders are imprecise to the point of impracticality. I also note that some of the outcomes sought by the applicants are capable of being pursued through legislated processes.

For all the above reasons, I am satisfied there are no reasonable grounds to support the necessity for interim orders and I accordingly decline to grant the orders sought by the applicants.