Il Villaggio [2006] QBCCMCmr 337 (23 June 2006)

Last Updated: 19 December 2006

REFERENCE: 0396-2006

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

Geoffrey & Valda Ivett & Toni Leigh, the Owner(s) of lots 24 and 31 respectively

I hereby order that, pending a final determination and subject to the further order of an adjudicator, the body corporate for Il Villaggio must not take any further action pursuant to resolution 13 of the annual general meeting of 4 February 2006 purporting to authorise legal proceedings against former committee members. This is an interim order and will remain in effect for a period of not longer than six months. It is the responsibility of the applicants to apply to extend this order if no final determination has been made within that period. This order will automatically lapse upon a final order being made or this application being withdrawn.

STATEMENT OF ADJUDICATOR’S REASONS FOR DECISION - REF 0396-2006

"Il Villaggio" CTS 28518

Interim Application

Il Villaggio Community Titles Scheme (Il Villaggio) is a 40 lot scheme under the Body Corporate and Community Management Act (Act) and the Act’s Accommodation Module Regulation (Accommodation Module).

This is an application for interim orders. It arises out of an application by Geoffrey & Valda Ivett and Toni Leigh, the Owner(s) of lots 24 and 31 respectively (applicants) against the body corporate for Il Villaggio (respondent).

Interim Orders Sought

The applicants seek an interim order to prevent the body corporate taking further action on a resolution to commence proceedings against former committee members pending a final determination of whether the resolution was validly passed.

Decision

Urgent interim relief

An interim order will not be granted unless is it necessary due to the nature or urgency of the circumstances to which the application relates (Act, 279). Further, any orders granted must be just and equitable in the circumstances (Act, 276).

In determining whether it is just and equitable to grant interim relief it is relevant to briefly consider whether the application raises any serious questions for final determination.

It is also relevant to consider whether any inconvenience likely to result from the interim order is outweighed by the potential detriment alleged in the application. Any evidence that an interim order is necessary to prevent serious or irreparable harm will be significant.

Serious legal question

The resolution in question is to the effect that the body corporate appoint Teys Legal Pty Ltd to start legal proceedings against certain former committee members in relation to alleged unauthorised legal expenses. An indemnity against any damages as a result of failure to pay the remuneration of the caretaker and failure to approve the assignment of the management rights is also sought. The resolution stated that the cost of these proceedings was not to exceed $15,000.

The resolution was passed on 4 February 2006. This raises some questions as to why an interim order is required at this stage. In particular, an application opposing a resolution should be made within three months unless an adjudicator waives this requirement for good reason (Act, 242). As it happens, one of the applicants made an application for final orders about the meeting within the three month period. This may amount to good reason for allowing an interim application regarding similar issues shortly outside this time frame.

In the present application, some serious questions have been raised about whether owners relied on false or misleading explanatory material in voting to pass the resolution. The applicants have also provided a letter from Dibbs Abbott Stillman Lawyers estimating that legal fees are likely to be in the order of $55,000 to $75,000 whereas owners may have assumed the amount of $15,000 mentioned in the resolution would be sufficient.

The present committee and body corporate manager have failed to provide any submissions disputing these claims. In the circumstances, there is a serious question raised as to whether it would be unreasonable for the body corporate to act upon the resolution (Act, 94(2)).

Inconvenience from an interim order

The applicant has established some justification for an interim order prohibiting the body corporate from taking any further action pursuant to this resolution pending a final determination of the dispute.

The absence of any submissions from the present committee or the body corporate manager makes it difficult to determine if the body corporate will suffer any significant inconvenience from an interim order preventing any further action pursuant to this resolution.

In the circumstances, I am prepared to make the interim order sought. If necessary, the body corporate can make an application for supplementary interim orders or for the specific authorisation of an adjudicator to allow the taking of any step that is considered necessary prior to a final determination being made.

Order

For these reasons, I make the interim order above.

The application will be allowed to proceed to submissions and a final determination in the normal course.