No. 9 Port Douglas Road [2006] QBCCMCmr 517 (12 October 2006)

Last Updated: 19 December 2006

REFERENCE: 0774-2006

INTERIM ORDER OF AN ADJUDICATOR

MADE UNDER PART 9 OF CHAPTER 6

BODY CORPORATE AND COMMUNITY MANAGEMENT ACT 1997

Number of Scheme:	24368
Name of Scheme:	No. 9 Port Douglas Road
Address of Scheme:	9 Port Douglas Road PORT DOUGLAS QLD 4871

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

Maxwell Stainlay, the Owner(s) of lot 17

I hereby order that the application for interim orders is dismissed. The application for final orders remains outstanding. There will be an opportunity for persons likely to be affected by any final orders to provide submissions regarding the application for final orders in due course.

STATEMENT OF ADJUDICATOR’S REASONS FOR DECISION - REF 0774-2006

"No. 9 Port Douglas Road" CTS 24368

Interim Application

No. 9 Port Douglas Road Community Titles Scheme (PDR) is an 18 lot scheme under the Body Corporate and Community Management Act (Act) and the Act’s Accommodation Module Regulation (Accommodation Module). The scheme is described as a warehouse/office/residence converted to an 18 unit complex. Lot boundaries are designated under a building units plan (now known as a building format plan).

This is an application for interim orders seeking to put on hold any proceedings in relation to resolution 1 of an extraordinary general meeting held on 15 September 2006. It arises out of an application by Maxwell Stainlay, owner of lot 17 (applicant) seeking final orders to void this resolution.

The resolution in question purports to engage Michael Laycock of Miller Harris Lawyers to act on behalf of the body corporate in relation to an appeal brought by the applicant and another owner in the District Court. The resolution states that costs are not to exceed $11,000 and a special levy is to be raised to meet these costs.

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.

Submissions

The applicant makes submissions to the effect that:

• The resolution involves major spending but owners were not give the option of two quotations as required by section 104 of the Standard Module;
• The committee submitting the motion had two estimates only, not firm quotations, and then levied owners with the maximum estimated amount;
• The appeal in question is to be decided on a point of law and the need to defend an action merely because the body corporate may be liable for the cost of proceedings cannot be justified.

The body corporate manager has made submissions to the effect that:

• The body corporate committee approached two separate solicitors to advice on costing to act for the body corporate in relation to the appeal. Both of these estimates came in at $5,000 to $10,000 for the entire appeal process;
• The body corporate was named as a respondent in an appeal and was required to attend a directions hearing at the District Court on 11 August 2006. The body corporate did not have time to call and hold an extraordinary general meeting to appoint a solicitor so held a committee meeting on 2 August 2006 to appoint a solicitor, not to exceed the relevant committee expenditure limit of $2,250. The solicitor acted under this amount to attend the directions hearing;
• On 17 August 2006 the committee approved the calling of an extraordinary general meeting to appoint a solicitor to act on the remaining matters for the appeal. The extraordinary general meeting was held on 15 September 2006 at which time the motion to engage legal representation was approved;
• The request by the applicant to have the motion ruled void appears to be attempting to obstruct the body corporate from having a defence against the appeal that he himself has made against the body corporate. The body corporate is entitled and also required to have legal representation in this regard.

The committee made submissions, including that it was impossible to obtain two firm quotes for the cost of litigation and the applicant should be aware of this considering he previously spent over $4,000 of owners’ money on legal fees without authorisation or knowledge of the owners.

Other owners have also made submissions, including a group of twelve owners claiming that the application is vexatious and stating that they are considering making application to recover some of the costs incurred by the body corporate in distributing and answering the dispute.

Order

The applicant’s submissions appear to be lacking in substance in establishing any serious question for determination. Questions are raised about whether section 104 requires two quotations but the application seems to fail to take account of whether the applicable time limits meant that it was appropriate for the committee to engage legal representation up to the committee limit and then put forward only that quotation under section 104(6).

Further, the applicant provides little argument to support an assertion that a fixed price quotation must be provided rather than estimate and an assertion that the body corporate should not engage legal representation to defend the appeal. In particular, where estimates are given it may simply be prudent to authorise expenditure up to the maximum amount estimated and raise a special levy accordingly.

In any event, the submissions indicate that the appeal is set down for hearing in only two weeks time and the balance of convenience would seem to favour risking that the applicant may need to make a contribution towards costs of legal representation over the period leading up to a final determination rather than risking that the body corporate be deprived of legal representation for the same period.

The application for interim orders is therefore dismissed.

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