Whitton [2006] QBCCMCmr 52 (8 February 2006)

Last Updated: 19 December 2006

REFERENCE: 0233-2005

ORDER OF AN ADJUDICATOR

MADE UNDER PART 9 OF CHAPTER 6

BODY CORPORATE AND COMMUNITY MANAGEMENT ACT 1997

Number of Scheme:	13500
Name of Scheme:	Whitton
Address of Scheme:	40 Cypress Terrace PALM BEACH QLD 4221

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

Peter Bell, the Owner of lot 1

I hereby order that the application for orders (a) To correct many current legal and other problems with the Body Corp. appointments and operations so that the whole administration is put on a sound, honest, fair, long term footing quickly. (b) To recover moneys due to me from the body corporate and Connie as lot owner plus my costs of pursuing and resolving this dispute. Is dismissed as it is a dispute which should be dealt with in a court or tribunal of competent jurisdiction.

STATEMENT OF ADJUDICATOR’S REASONS FOR DECISION - REF 0233-2005

"Whitton" CTS 13500

THE SCHEME

Whitton Community Titles Scheme (Whitton) is a 2 lot (duplex) residential scheme registered on a Building Unit Plan, now referred to as a Building Format Plan under the Body Corporate and Community Management Act 1997 (Act). The Standard Regulation Module (Standard Module) applies to the scheme.

APPLICATION

This application is by Mr Peter Bell, the owner of lot 1 (applicant) seeking orders against Ms Connie Lamanna, the owner of lot 2 and the body corporate. The application is very lengthy and details the applicant’s experiences in dealing with the other owner since purchasing his unit in December 2000. The applicant has sought to alter the application and outcomes sought, on a number of occasions, with the result that the application and subsequent correspondence from the applicant now amounts to some 605 pages.

JURISDICTION

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)).

GENERAL OUTCOMES SOUGHT

The "outcomes sought" in this application are set out below:

• Appointment of a Committee for the body corporate.
• Appointment of an officer of Body Corporate Choice as Chairperson for all Committee meetings
• Appointment of an officer of Body Corporate Choice as body corporate manager
• Appointment of an officer of Body Corporate Choice as Chairperson for all General meetings
• Recovering body corporate funds and documents from the owner of Unit 2 and passing them to the body corporate manager.
• Requesting the body corporate manager to clarify outstanding body corporate financial and resolve required contributions/ refunds as a matter of urgency.

The applicant also claims that excessive noise travels from unit 2 through to unit 1 and that water has leaked into unit 1 causing water damage to unit 1. The owner of unit 2 submits that the water damage was caused during a storm when the roof was damaged and rainwater flowed through both units. I am further advised that the insurer made a payment of approximately $14,000 to the body corporate and a payment of $562 to the applicant in respect of water damage to his unit.

However, at page 6 of his application, the applicant also advised as follows:

I am advised that the tribunal will require separate Applications for some of these matters and have therefore restricted this application to the following:

(a) To correct many current legal and other problems with the Body Corp. appointments and operations so that the whole administration is put on a sound, honest, fair, long term footing quickly.

(b) To recover moneys due to me from the body corporate and Connie as lot owner plus my costs of pursuing and resolving this dispute.

On 16 January 2006 the applicant sought to amend the application by re-calculating the amount due and requesting that an additional 18 orders be made as listed below:

• "That the owner of unit 2 pay the applicant $27,900 for his time in lodging this application and sending further correspondence to this office";
• "That the owner of unit 2 pay the applicant’s daughter $1193 and provide an unconditional written apology";
• "That the owner of unit 2 pay the applicant 1 $1123 for further costs (stationary etc.);
• AGM election of Mr Beauchamp be reversed";
• "That the owner of unit 2 pay the applicant the sum of $250 toward replacing toilet ceiling;
• "That the tribunal provide clear confirmation on the validity or otherwise of all matters at the 21/9/2005 AGM";
• "That the tribunal provide such further orders as will reasonably ensure the body corporate can function according to that outcome and the Act.
• clear confirmation on the validity or otherwise of all matters at the 21/9/2005 AGM"
• That unit 2 apologise to a Mr Woodroffe and make a payment to him of at least $300;
• That unit 2 pay unit 1 the sum of $720 plus an allowance not less than $500 for extra long term depreciation arising from water damage to unit 1’s ceilings;
• That the applicant pay only $280 toward the current insurance policy premium and lot 2 contribute the balance;
• The AGM decision to exclude him as a cheque signatory be reversed;
• That unit 2 pay the body corporate the sum of $500 plus $75 for supervision, for replacement of their garage door in material and colour matching unit 1’s door;
• Unit 2 pay unit 1 interest on all monies due;

I do not propose to consider the additional claims by the applicant on 16 January 2006 . In my view these additional claims are misconceived and accordingly, this application is restricted to the applicant’s request for orders (a) and (b) above.

BACKGROUND

Although the subject scheme is a duplex consisting of two small units, this dispute resolution application is complicated by a number of factors including the following:

• failure by the body corporate to hold meetings and maintain proper body corporate records for a number of years ;
• the inability of the parties to communicate with one another on a rational basis for a number of years;
• unilateral decisions to undertake work without consulting the other lot owner; and

• lack of clarity as to what expenditure was incurred on behalf of the body corporate and what expenditure relates solely to lot 1.

With a view to introducing some order into this scheme I made the following interim orders on 8 June 2005:

• That Ms Wendy Steadman of Body Corporate Choice is appointed as Administrator to call, hold, and chair an annual general meeting in accordance with this order and within 3 months from the date of this order. The Administrator shall hold the appointment for the period beginning on the date of this order, until the close of the meeting ordered to be held.

• That for the purposes of the Body Corporate and Community Management Act 1997 (the Act), the meeting shall be deemed to be an annual general meeting of the Body Corporate.

• That for the purposes of calling and chairing the meeting, the Administrator shall have all the powers of chairperson, secretary and treasurer of the Body Corporate and of the committee, with the exception of the following powers-
To further delegate any of those powers to another person; and
To incur any expenditure apart from that reasonably necessary for the calling and holding of the meeting, and apart from expenses that must necessarily be met and are capable of being authorised and incurred by a committee under the legislation.

• That the Administrator shall prepare an agenda for the meeting, including but not necessarily limited to, the matters set out in section 62(3) of the Body Corporate and Community Management (Standard Module) Regulation 1997 ( the Standard Module), however the meeting may also consider any other matter before it.

• That within 14 days of the date of this order, Ms Lamanna shall hand to the Administrator all books and records of the body corporate in her possession to enable the Administrator to call and hold the meeting so ordered.

• That the Administrator shall issue a notice of the meeting in accordance with sections 42(1), (2) and (3) of the Standard Module.

• That except as provided in this order, the meeting must be called and held in accordance with the Act and the Standard Module.

• That for the purposes of determining the future financial years of the Body Corporate, the end of the financial year shall be the last day of the month immediately preceding the month in which the anniversary of the meeting authorised by this order falls.

In doing so I also made the following comments:

Although a large amount of documentation and information has been provided in support of the application it is difficult at this stage to precisely determine the liability of the body corporate to the applicant. This is because it is unclear whether some items of expenditure have been correctly
characterised as body corporate expenses, whether the work was authorised by lot owners and whether the charges are reasonable. It may be that once a body corporate manager has been appointed, records reviewed and further information is provided by the parties to this dispute, that I will be able to calculate the amounts owing to the applicant with some certainty by way of a final order.


After making these Interim Orders I received a large amount of written material from the applicant on various dates. The applicant has claimed that the owner of lot 2 owes him certain monies for repairs and maintenance and also claimed that the owner of lot 2 misappropriated certain moneys from the body corporate bank account. The owner of unit 2 claims that this cash amount was paid to a handyman who completed certain works on the building. As the amount allegedly owed by lot 2 could not be calculated with any certainty, I suggested that one option for consideration was the appointment of an auditor to conduct an audit of the expenses incurred on behalf of the body corporate. The applicant rejected this suggestion owing to the cost involved and suggested that amongst other things, that the adjudicator could question the tradesmen who undertook the work.

Since the date of the interim orders, Ms Wendy Steadman of "Body Corporate Choice" acted as administrator for the scheme for the purposes of preparing accounts and calling an AGM. Part of the reason for appointment of an administrator was to have an independent person interpret the voluminous material produced regarding this dispute. I subsequently received from Ms Steadman an extract from a "cashbook" for the period 1 January 2003 to 30 June 2005, taken from information provided by the applicant. These accounts show that in that period, contributions paid on behalf of lot 1 amounted to $5,0676.63 (excluding the disputed amount of $1,562). These accounts also show that in that same period, contributions paid on behalf of lot 2 amounted to $2,363.78. Based on the above, Ms Steadman advised that unit 2’s share of the contributions were in the vicinity of $1,350. The applicant also sought payment of $1,562 allegedly owed to him.

I subsequently sought feedback from the owner of lot 2 regarding Ms. Steadman’s reconstruction of the body corporate accounts and attached a copy of the "cashbook" entries. The principal source of information relied upon by Ms Steadman was a "cashbook" prepared by the applicant. The owner of unit 2 claims that this document is nothing more than the document created by the applicant, many of the items detailed in the document are "very dubious", and that most of the work was not authorised by her. Further, the owner of unit 2 states that she has incurred expenditure in the vicinity of $10,000 in attending to body corporate maintenance over recent years, but is willing to pay the amount of $1,350 to settle this matter. This offer was rejected by the applicant.

For the purposes of clarifying this application and the response by the owners of unit 2, I conducted a teleconference with the applicant and lot 2’s representative on 7 February. The applicant stated that lot 2 owed $1,269.09 to the body corporate and $1,602.42 to lot 1. Much of this amount relates to repairs and maintenance which the applicant conceded, had not been agreed to by the owner of unit 2.

Although lot 2’s representative was not satisfied with this calculation, he advised that he was willing to pay a total of $2,871.50 in order to finally resolve the matter.

I asked the applicant for his response having regard to the various amounts which he has sought to claim from unit 2. The applicant advised that he intended to claim an additional amount of between $2500 and $3000 in respect of water damage allegedly caused by water escaping from unit 2. It was not clear why the cost of remedying this damage could not be claimed on the body corporate insurance policy. Unfortunately it was therefore impossible to resolve this matter on a basis that was acceptable to both parties.

I also raised with the parties the possibility of appointing an administrator in order "to correct many current legal and other problems with the Body Corp. appointments and operations so that the whole administration is put on a sound, honest, fair, long term footing quickly". However the applicant would not agree to the appointment of an administrator to the body corporate and expressed the view that an administrator should be "appointed to lot 2 only".

DETERMINATION

This dispute resolution involves the applicant’s request for the following orders:

(a) To correct many current legal and other problems with the Body Corp. appointments and operations so that the whole administration is put on a sound, honest, fair, long term footing quickly.

(b) To recover moneys due to me from the body corporate and Connie as lot owner plus my costs of pursuing and resolving this dispute.

The first issue for consideration is the applicant’s claim for reimbursement of the amounts expended on repairs and maintenance to the exterior of the building.

In a letter dated 16 November 2005, the body corporate manager advised as follows:

" Peter Bell has put some considerable time and effort into tracking back through his records for the past few years and has come up with a final cashbook for 2003-2005. From this it appears that Mr. Bell has contributed some $6,629.63 and Ms Lammana $2,363.78, other payments were made from the body corporate. In one of his many emails Mr. Bell asks that you order that Unit 2 match his match his contributions which would have them pay approximately $2854."
The abovementioned sum of $2854 includes the disputed amount of $1562.

I put this to the owners of unit 2 who replied as follows:

" Wendy Steadman has obviously capitulated because the cash flow that she has sent to you is no more than a copy of Peter Bell’s cash flow . I sent a letter to Wendy on 7/10 as I wasn’t sure where $1,562 that Peter is saying is missing had gone. Connie has since told me that the was paid to a fellow named Allen Woodroff, Peter Bell’s friend. There was not enough money in the Suncorp Bank account, the cheque bounced, a few days later there was money in the account so cash was taken out and given to Ben Calvi our tenant who in turn gave the money to Allen Woodroff as instructed to do by Peter Bell.

This $1,562 was a $562 insurance payment which was banked into the Whitton Body Corporate and $1,000 was given back to Peter Bell for money that he had paid into the bank account prior to him getting upset.

Peter has continued to make our life a misery. He has proceeded to do work on the property without asking should the work be done, neither have we been able to confirm whether the work has actually been done. Some things are obvious such as the painting of eaves and fixing of brackets, but there are lots of things on this cash flow which are very dubious.....................
Connie has paid for all the ongoing maintenance for the Whitton Body Corporate since 1997 and never been reimbursed. If Peter Bell is now saying he is to be reimbursed for minor amounts of work so should Connie for all the work that has been paid for out of her pocket that has never been claimed back......

If required we will take this further and we will have our lawyers and accountants go through the cash book and all documentation from Peter Bell. We will have the cash book scrutinised correctly as the cash book does not make any sense."

As an adjudicator, it is impossible at this point in time for me to determine with any accuracy the amount owed by lot 2 to either the applicant or the body corporate. As I pointed out above, this body corporate has failed to hold meetings as required by the Act and has failed to maintain proper records. Accordingly, there is no record of work authorised by the body corporate even though the
Act provides that such work should be authorised by resolution of the body corporate rather than
being undertaken without consulting the other owner. Although there is limited scope for the making of an order as part of the adjudicator’s "just and equitable" jurisdiction, there are no proper body corporate records to work from but rather a cash book prepared by the applicant which is disputed by the respondent.

As I pointed out to the parties during the teleconference, Departmental adjudication involves dispute resolution procedures that are designed to facilitate inexpensive and relatively informal resolution of disputes. The adjudication procedure involves an examination of material submitted in writing, with very limited scope for the adjudicator to make findings regarding disputed facts. There is no provision under the Act for an adjudicator to conduct a hearing or to take evidence on oath. Where there is conflicting evidence which cannot be objectively resolved on the papers, it is often the case that evidence can only satisfactorily be tested if the parties and their witnesses are able to be examined and cross examined. I do not believe it would be appropriate for me to make a determination regarding the above issues. Section 270(1)(b) of the Act allows for an adjudicator to dismiss an application if they are satisfied the dispute should be dealt with in a court or tribunal of competent jurisdiction. I believe that this is the only way that various questions of fact can be resolved in this case.

As outlined above, for the purposes of introducing some order into this scheme I previously made the following interim orders:

• That Ms Wendy Steadman of Body Corporate Choice is appointed as Administrator to call, hold, and chair an annual general meeting in accordance with this order and within 3 months from the date of this order. The Administrator shall hold the appointment for the period beginning on the date of this order, until the close of the meeting ordered to be held;

• That for the purposes of the Body Corporate and Community Management Act 1997 (the Act), the meeting shall be deemed to be an annual general meeting of the Body Corporate;

• That for the purposes of calling and chairing the meeting, the Administrator shall have all the powers of chairperson, secretary and treasurer of the Body Corporate and of the committee, with the exception of the following powers-
To further delegate any of those powers to another person; and
To incur any expenditure apart from that reasonably necessary for the calling and holding of the meeting, and apart from expenses that must necessarily be met and are capable of being authorised and incurred by a committee under the legislation;

• That the Administrator shall prepare an agenda for the meeting, including but not necessarily limited to, the matters set out in section 62(3) of the Body Corporate and Community Management (Standard Module) Regulation 1997 ( the Standard Module), however the meeting may also consider any other matter before it;

• That within 14 days of the date of this order, Ms Lamanna shall hand to the Administrator all books and records of the body corporate in her possession to enable the Administrator to call and hold the meeting so ordered;

• That the Administrator shall issue a notice of the meeting in accordance with sections 42(1), (2) and (3) of the Standard Module;

• That except as provided in this order, the meeting must be called and held in accordance with the Act and the Standard Module; and

• That for the purposes of determining the future financial years of the Body Corporate, the end of the financial year shall be the last day of the month immediately preceding the month in which the anniversary of the meeting authorised by this order falls.

I have also subsequently raised with the parties the possibility of appointing an independent third party as administrator to perform the role of the committee and executive members of the body corporate. However, the applicant objects to having to contribute toward the cost of an administrator and by e-mail communication dated 16 January 2006, the applicant has advised that
an administrator should be appointed to lot 2 only. During the teleconference held on 7 February 2006 the applicant again rejected the proposal that an independent administrator be appointed.

Given the need for this dispute to be determined by a court or tribunal of competent jurisdiction in order to ascertain the various questions of fact, and the applicant’s rejection of the proposal that an administrator be appointed, there is little more that I am able to do for the purposes of resolving this dispute and accordingly I have dismissed the application.