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Il Villaggio [2006] QBCCMCmr 72 (16 February 2006)

Last Updated: 12 March 2009

Number 0197/2005
Number 0215/2005

Applicant Jane Marie Lamason

Respondent Body Corporate for Il Villaggio CTS

The Applications

By a dispute resolution application (0197/2005) dated 15 March 2005 the applicant sought two outcomes. Namely:
- (a) a declaration that the body corporate’s withholding of consent to a proposed assignment of management rights by the applicant to Susan Ridley was unreasonable.
- (b) an order that the body corporate pay to the applicant appropriate compensation for the body corporate’s unreasonable refusal to provide consent to the proposed assignment.
By a dispute resolution application (0215/2005) dated 22 March 2005 the applicant sought eight outcomes numbered in paragraph 5 of the application.
Those outcomes include:
- (a) a mandatory injunction directing the body corporate to meet the payment of the applicants remuneration under the terms and conditions of the management agreement dated 12 October 2000 for the month of February 2005;
- (b) that pursuant to clause 13 of the management agreement the body corporate nominate one member of the body corporate committee to liaise with the applicant;
- (c) that any notice provided by any other member of the body corporate committee to the applicant or any instruction provided shall have no effect and the applicant shall not be bound to acknowledge any such notice or instruction;
- (d) that the body corporate refrain from issuing frivolous vexatious and or misconceived breach notices;
- (e) the applicant shall only be obliged to meet the member the body corporate committee nominated under clause 13 of the management agreement once every three weeks at a time and on a date suitable to both parties;
- (f) that at least two days prior to any meeting referred to in the previous order the authorized member shall provide the applicant with an adequately particularized agenda of matters to be discussed at the meeting; and
- (g) that in all future dealings with the applicant the body corporate shall be required to act reasonably and in good faith.
Those outcomes are reflected in orders sought by the applicant.

Interim Order Sought

In correspondence sent to the Office of the Commissioner from Mahoney Lawyers the applicant sought an urgent interim order. So much was not set out in the application but given that indication I indicated a preparedness to consider whether an interim order should be made.
Section 265 of The Body Corporate and Community Management Act 1997 (the Act) provides for the adjudication of particular disputes by a specialist adjudicator which include anticipated or claimed contractual matters as defined in Schedule 6, about the engagement of a person as a body corporate manager or caretaking service contractor for a community titles scheme or the authorization of a person as a letting agent for a community titles scheme.
The Body Corporate and Community Management Act 1997 in section 276 allows an Adjudicator to whom an application is referred to 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 title scheme”. Some orders an adjudicator may make are set out in schedule 5. I am not restricted to those orders. I am able to require persons to act in a way stated in an order about the exercise of rights or powers under the Act and claimed or anticipated contractual matters about the engagement of a person as a body corporate manager or service contractor.
Section 279 allows an Adjudicator to 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.
The basis for an interim order sought is contained in a letter dated 30 March 2005 from Mahoney Lawyers to the Office of the Commissioner for Body Corporate and Community Management in which it is said:

“with respect to the application, our client has sought an urgent interim order in relation to the payment of her entitlements under the terms and conditions of the management agreement with the body corporate for “Il Villaggio”. If our client is not paid her entitlements pursuant to the management agreement, she will suffer severe hardship and will be unable to adequately discharge her obligations as required by the agreement.”

On 18 April 2005 supplementary submissions for the application for an urgent interim order were received from Mahoney Lawyers in the following terms:

“1. As stated in the applicant’s application, the Body Corporate for Il Villaggio has refused to meet the payment of the applicant’s remuneration for the month of February 2005 in accordance with the terms and conditions of the Management Agreement.

2. The decision not to meet the payment of the applicant’s remuneration was not determined by the Body Corporate in a general meeting but rather was a result of a unilateral decision by the Secretary for the Body Corporate Committee.

3. It is respectfully submitted that any decision to withhold the applicant’s remuneration would amount to a purported variation to the terms and conditions of the Management Agreement, without the consent of the Applicant.

4. In the absence of the applicant’s agreement, the Body Corporate is only entitled to amend the terms and conditions of a Management Agreement by the passage of an ordinary resolution. (Section 87 of the Body Corporate and Community Management (Standard Module) Regulation1997.)

5. In this circumstance, any decision by the Body Corporate Committee or the Body Corporate Committee Secretary to withhold the applicant’s remuneration is invalid and therefore, it is respectfully submitted that the Body Corporate should be directed to meet the payment of the applicant’s remuneration immediately.”

On that basis I was prepared to consider whether an interim order should be made in the terms that the body corporate be directed to meet the payment of the applicants remuneration under the terms and conditions of the management agreement dated 12 October 2000 for the month of February 2005.

Management Agreement

The management agreement dated 12 October 2000 by clause 2 obliges the body corporate to pay the applicants remuneration by way of calendar monthly installments in arrears:

“Remuneration of Manager

2. In consideration of the performance by the manager of the duties as herein set out the body corporate shall pay the manager the remuneration as set out in the schedule hereto by means of calendar monthly installments in arrears. The remuneration payable under this agreement is not for the provision of any letting service which the manager may provide to owners of units”.

Clause 3 of the management agreement provides for the duties of the manager.

Factual Matters

For the purposes of considering whether an interim order should issue in the terms set out above, I assumed the following facts to be correct:
- (a) By deed of assignment dated 30 October 2003 the applicant was assigned the management rights for “Il Villaggio”.
- (b) The management rights are contained in the management agreement provided to me dated 12 October 2000 between the Body Corporate for “Il Villaggio” Community Title Scheme 28518 and Arthur Neville Harvey.
- (c) Clause 8 of the management agreement provides for termination by the body corporate and clause 9 provides for termination otherwise.
- (d) Clause 12 provides for arbitration; and
- (e) Clause 13 provides for the giving of instructions from the body corporate to the manager.
- (f) Clause 13 provides:

“(a) the body corporate shall from time to time authorize one of its members to give instructions to and communicate with the manager on behalf of the body corporate and not more than one (1) member of the body corporate at any time shall be given such authority. (b) the manager will confer fully and freely with the representative of the body corporate if so requested relative to the performance of the duties of the manager herein set forth and shall at the request of the representative of the committee of the body corporate attend by its authorized representative meetings of the committee members of the body corporate. The representative of the manager shall be entitled to be heard on any relevant question or matter at any such meeting”.

The schedule referred to in the body corporate agreement by paragraph 1 provides:

“1. During the first twelve (12) calendar months of the term hereof the sum of forty thousand dollars ($40,000.00) per annum (or such greater sum as the body corporate may from time to time agree upon but without any obligation to do so);

2. At the expiration of each year the said remuneration shall increase by which ever is the greater of five percent (5%) or by the same percentage as the rise in the all group consumer price index for Brisbane in the State of Queensland occurring from the date of the quarter ending closes in time to the date of the commencement of the proceeding year to the date of the quarter ending closes in time to the date of the expiration of the proceeding year after the commencement of the year hereof.”

In the application it is asserted that:

“at no time since taking an assignment of the management rights has the applicant been provided with any notice from the body corporate or the body corporate committee that any representative of the body corporate committee has been provided with the authorization specified in clause 13 of the management agreement.”

I have been provided with a letter dated 18 March 2005 signed by Toni Leigh the apparent chair person of “Il Villagio” addressed to the resident unit manager. That letter outlines a number of items that require attention from January and/or February 2005. It requests that the matters outlined be actioned within 14 days. The letter then contains the following:

“Failure to carry out these duties will result in our body corporate incurring losses as a result of the body corporate having to pay someone else to perform your duties. In this case the body corporate will set off the amount of such loss against your February remuneration.”

The letter referred to occasions on which it was said a notice to remedy had been issued by the body corporate and asserted that on 15 February 2005 the body corporate wrote to advise that a satisfactory response had not been received and that the resident unit manager was in breach of the management and letting agreements. Without determining the merit or otherwise of the complaints or of any responses to those allegations I note that the remuneration is in consideration of the performance by the manager of the duties set out in clause 3. Clause 8 provides for the termination of the agreement by the body corporate by notice in writing to the manager in the event that the manager fails or neglects to carry out the duties pursuant to the agreement without good reason and such failure or neglect shall continue for a further period of 28 days after notice in writing shall have been given to the manager specifying the duty which the manager has failed or neglected to carry out and calling upon the manager to perform such duty. I do not see anything in the agreement which allows for there to be a set off or for remuneration to be withheld subject to the statement that the remuneration is in consideration of the performance of the duties.
I have taken into account the five matters set out in the supplementary submission.

Order Made Previously

Without making any final determination of any of the matters raised in the application on 19 April I indicated that in my opinion it was appropriate to make an interim order directing the body corporate to meet the payment of the applicant’s remuneration for the month of February 2005 and I so ordered. Because of the nature of this order and the material available to me I gave liberty to apply on 2 days notice concerning that order. So that all of the matters sought can be determined I made directions accordingly.
Those directions were made at a directions hearing held on the 21st of September 2005.
Because of those directions I was provided with submissions in respect of the preliminary matters on behalf of the body corporate for application numbers 0197-2005 and 0215-2005 .
Additional submissions I had regard to included correspondence from Mahoney Lawyers dated 18 August and 23 August 2005, from Dibbs Abbott Stillman and Geoff and Val Ivett and Meta Walden and Toni Leigh.

Preliminary Matters Raised

At the directions hearing on the 21st of September 2005 I was at that time asked to consider whether I had the power to award damages in application 0197-2005.
I was also asked to consider whether I had the power but to give a mandatory injunction in application 0215-2005 and if so in what terms.
I agreed to consider those matters as preliminary matters and made directions. The costs were reserved.

Application number 0197-2005
Body Corporate’s submissions

In respect of the application for an order that the body corporate pay the applicant damages arising out of the Body Corporate’s alleged unreasonable refusal to provide consent to a proposed assignment of the applicant's management rights to Susan Ridley the body corporate contends that an adjudicator appointed under the Body Corporate and Community Management Act 1997 (the Act) has no power to award damages and that the adjudicator should dismiss that claim in the application pursuant to section 270(1)(a) and (b) of the act.
Section 270 provides:

“ 1. The adjudicator may make an order dismissing the application if -

a. it appears to the adjudicator and that the adjudicator does not have jurisdiction to deal with the application;

b. The adjudicator is satisfied the dispute should be dealt with in a court or tribunal of competent jurisdiction.......”

The respondent body corporate submits that there is no power expressly conferred upon an adjudicator under the act to make an award for damages. It submits that section 281 of the act only allows an award of reimbursement to be made for damage to property.
Section 281 provides:

“Order to repair damage or reimburse amount paid for carrying out repairs

1. If the adjudicator is satisfied that the applicant has suffered damage to property because of a contravention of the same or the community management statement, the adjudicator may order the person who the adjudicator believes, on reasonable grounds, to be responsible for the contravention-

a. To carry out stated repairs, or have stated repairs carried out, to the damaged property; or

b. To pay the applicant an amount fixed by the adjudicator as reimbursement for repairs carried out to the property by the applicant.
Example-

a waterproofing membrane in the roof of a building in the scheme leaks and there is damage to wallpaper and carpets in a lot included in the scheme. The membrane is part of the common property and the leak results from a failure on the part of the body corporate to maintain it in good order and condition, the adjudicator could, on application of the lots owner, order the body corporate to have the damage repaired or to pay an appropriate amount as reimbursement for amounts incurred by the owner in repairing the property.
2. The order cannot be made if-

a. For an order under subsection 1(a)-the cost of carrying out the repairs is more than $75,000; or

b. For an order made under subsection 1(b)-the amount fixed by the adjudicator would be more than $10,000.”

The respondent Body Corporate submits that the office of the commission of the body corporate and community management is a creature of statute.[1] It also points out that the office of the adjudicator is a creature of statute.[2] That being the case the respondent submits that statutory bodies cannot make orders beyond their statutory jurisdiction. [3]
The principle relied on is as follows:

“ ... It is clear that the court (tribunal)is intended to exercise only the powers conferred by the statute. It is purely a statutory tribunal subject to the well recognised limitations of power of such a court. If the power does not flow from the act as properly construed, it cannot exist. The jurisdiction of an inferior court is defined by the act of Parliament by which it is constituted or such general provisions of statutes which extend such jurisdiction. It is in connection with jurisdiction that lie the Chief distinctions between superior and inferior courts. Prima-facie, no matter is deemed to be beyond the jurisdiction of a superior court unless it is expressly shown to be so while nothing is within the jurisdiction of an inferior court unless it is expressly shown on the face of the proceedings that the particular matter is within the cognizance of the particular court.” (my underlining).

That principle has been applied in a number of other jurisdictions.[4]
In Burgess v QBSA[5] it was held that as a creature of statute the Queensland Building Tribunal could not fashion orders beyond its statutory jurisdiction.
In Bennett v Tasmania [6] it was held that:

“... A statutory tribunal, like a statutory court, does not have the inherent powers of the courts of the common law. A statutory tribunal has the powers expressly or by implication conferred by the legislation which governs it, as well as such powers as are incidental to the exercise of its jurisdiction and in referring to these powers, the term ‘inherent powers’ should be avoided.” (my underlining)

The respondent body corporate submitted by analogy that the adjudicator, being a creature of statute, is limited to those express powers contained in the act and has no inherent jurisdiction to make the order sought by the applicant and accordingly submitted that the application should be dismissed with costs.

Applicant's submissions on application 0197-2005

The applicant frames the orders that she seeks as follows:

a. A declaration that the withholding of consent by the Body Corporate to a proposed assignment of management rights by the applicant to Susan Ridley was unreasonable;

b. An order that the body corporate pay to the applicant appropriate compensation for unreasonable refusal of the Body Corporate to provide consent to the proposed assignment.

The applicant refers to section 276 of the Act. The applicant argues that section 276 provides a specialist adjudicator with wide discretion to make orders that are “just and equitable” to resolve a dispute 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 this act or the community management statement; or
c. a claimed or anticipated contractual matter about-

i. The engagement of a person is a body corporate manager or service contractor for a community title scheme; or

ii. The authorisation of a person as a letting agent for a community title scheme.

Section 276(2) provides that an order may require a person to act, or prohibit a person from acting, in a way stated in the order.
The applicant points out that a specialist adjudicator is entitled to make orders such as those mentioned in schedule 5 of the Act. The submission is made that the orders specified in schedule 5 are not to be regarded as being an exhaustive list of the orders which a specialist adjudicator is entitled to make.
Section 276(3) provides “ without limiting subsections 1 and 2, the adjudicator may make an order mentioned in schedule 5.
The applicant points out that the dispute lodged by her with the Commissioner's office is :
1. The body corporate is breach of the management agreement by failing to act reasonably in making its determination to refuse consent to an assignment of the applicant's management rights to Susan Ridley.
2. The body corporate is in breach of the accommodation module which provides that the body corporate may not unreasonably withhold approval to any proposed transfer.
In respect of those disputes the applicant refers to clauses 2.4 and 2.5 of submissions made by her on the 15th of March 2005 and clause 2.2 of those submissions.
The applicant submits that both of the matters lodged by way of dispute are properly the subject matter of dispute which are able to be determined by a specialist adjudicator who has wide powers to make orders which are in all the circumstances just and equitable. For the reasons given later herein I accept that submission.
Section 227 defines “dispute” as including a dispute between the body corporate for a community title scheme and a caretaking service contractor for the scheme.[7]
Section 229(2) provides that the only remedy for the dispute (if it may be resolved under chapter 6 by a dispute resolution process) is the resolution of the dispute by a dispute resolution process or an order of the District Court on appeal from the adjudicator on a question of law.
The applicant submits that a specialist adjudicator should strive to construe the act wherever possible to give effect to the objective of the legislators to create a one-stop shop for the resolution of be specified body corporate related disputes. They say, otherwise, it may give rise to the situation where disputants are obliged to submit part of their claim to the Commissioner and part to a court. They refer me to the decision in Greenhill homes Pty Ltd v Domestic Building Tribunal and others [1998] VSC 34.
They submit that requiring the applicant to first make application to the Commissioner under the provisions of the Body Corporate and Community Management Act 1997 to seek a declaration that the body corporate committee unreasonably withheld its consent to assignment to Susan Ridley, and then denying the applicant the right to obtain compensation for that unreasonable refusal and requiring her to take the matter further in the District Court would be contrary to the intention of the legislature.
The applicant goes on to submit that there is nothing in the Body Corporate and Community Management Act 1997 which would prevent a specialist adjudicator from making an order of damages against the body corporate.
Section 284(1) provides “the adjudicator's order may contain ancillary and consequential provisions the adjudicator considers necessary or appropriate.”
In Greenhill Homes Ltd v Domestic Building Tribunal the court considered the jurisdiction of the Domestic building Tribunal to hear and determine a claim for damages for misleading and deceptive conduct under the Fair Trading Act. It said:

“It was put, correctly in my view, that representations as to qualifications prior to the contract form the background to the building contract and to the work carried out under it. Accordingly, it was said that a claim arising out of them is not a claim “in relation to a domestic building contract or the carrying out of domestic building work”.

“The Tribunal was correct in rejecting this submission. What is required in order to attract jurisdiction is that the subject matter of the claim has the appropriate nexus with the building contract or with the building work. I will not go through the cases which his Honour analysed in his comprehensive reasons. It is sufficient that I refer to PMT Partners Pty Ltd (In liquidation) v Australian National Parks and Wildlife Service [1995] HCA 36; (1995) 184 CLR 301. In this case, the High Court had to consider whether the primary judge could exercise the power conferred by s48 of the uniform Commercial Arbitration Act to extend time. Under this provision, power was granted to extend time “for doing an act or taking a proceeding in or in relation to an arbitration”. The question was whether the court had power to extend the time prescribed in a building contract for a party to submit the matter in issue to the superintendent, a precondition to the right to arbitrate. The High Court upheld the primary judge’s conclusion that he did have that power. Brennan CJ, Gaudron and McHugh JJ were of opinion that the remedial nature of the power “to relieve against agreed time limits which might otherwise interfere with the fair and proper processes of arbitration” suggested that the power should be construed liberally: 184 CLR at 313. Toohey and Gummow J accepted that the expression “in and in relation to” in s48 required that the Act in question be to some extent connected with the arbitration. That the second event did not exist at the time of the first did not prevent the two events from having such a connection. At p184 of their judgment their Honours approved a dictum of Gray J in Newbury v Smith [1991] FCA 146; (1991) 29 FCR 246 at 252-3 which included the following:

The premise that an event which occurs before an election begins cannot be ‘in relation to’ that election is wrong. It is obviously possible to do an act ‘in relation to’ an event, before that event takes place. Acts preparatory to an event will usually be regarded as being performed ‘in relation to’ that event.

These considerations point to the conclusion contended for by counsel for the Proprietors. The representations are connected both to the building contract and to the building works because, as it is alleged, these events occurred only because the Proprietors were induced by the representations to enter into this building contract. It may be that there is also a point of contact with the building works because the damages claimed are assessed by reference to the costs of completion and rectification of those works, matters which are to be determined also in the claim for breach of the building contract.

Some guidance on this question is to be found in the cases in which the courts have considered the power of an arbitrator under a private arbitration agreement to entertain a claim such as that under consideration. There are decisions which show that such a claim is not referred to arbitration by an agreement where the jurisdiction of the arbitrator is over a “controversy or claim arising out of or relating to the agreement”: Allergan Pharmaceuticals Inc v Bausch & Lomb Inc (1985) 3 BCL 61; ATPR 40-636, per Beaumont J; or “any dispute between the parties hereto arising under the agreement”: Paper Products Pty Ltd v Tomlinsons (Rochdale) Ltd [1993] FCA 346; (1993) 43 FCR 439, per French J; or “any dispute or difference between the parties hereto of any kind relating to the construction of the works or as to the materials or workmanship used or employed therein or as to the construction, meaning or effect of this agreement or any part or parts thereof”: Tropeano v Monogram Pty Ltd [1992] 2 Qd R 324, per Mackenzie J. See too: Laminex (Australia) Pty Ltd v Coe Manufacturing Company (1998) ATPR 4-610, where an exclusive jurisdiction clause in a contract directing the parties to litigate in Multnomah County in the State of Oregan “any actions arising hereunder” did not oblige them to litigate in that jurisdiction misleading and deceptive conduct claims made under the Trade Practices Act 1974. On the other hand, there have been, recently, a series of strong judgments which would accept the jurisdiction of an arbitrator over these misleading and deceptive conduct claims where the terms of the arbitration agreement cover “any controversy or claim arising out of or related to this agreement or the breach thereof”: IBM Australia Ltd v National Distribution Services Ltd (1991) 22 NSWLR 466; “any dispute arising from this charter or any bill of lading issued hereunder”: Hifert Pty Ltd v Kiukang Maritime Carriers Inc (unreported, Federal Court of Australia, Tamberlin J, 4 December 1996, BC 9605908); “any dispute or difference arising out of this agreement”: Francis Travel Marketing Pty Ltd v Virgin Atlantic Airways Ltd (1996) 39 NSWLR 160.

In this case, the text in question is found in a statute and in one which sets up a tribunal with broad powers to resolve domestic building disputes: s1. It is a statute and which empowers the parties or one of them to require that the dispute be taken from the courts to this specialist tribunal. In such a case, the courts should not approach its construction in a grudging way; they should be no less liberal in their identification of the matters which might be referred to this tribunal.

A further consideration is that the evident purpose of this part of the Act is to establish a forum to resolve domestic building disputes. Counsel for the Proprietor said that the Tribunal was intended to be a “one stop shop” for this purpose. To adopt the words of the Attorney-General on 24 October 1995 in her second reading speech “the Tribunal is to be established as a single point for the resolution of all domestic building disputes”: Hansard Legislative Assembly vol 426 p695. I mention, too, that in the context of the law of private arbitrations, judges now are very much inclined to construe agreements to give effect to the same principle of one stop dispute resolution: Harbour Assurance Co (UK) Ltd v Kansa General International Insurance Co Ltd [1993] 1 QB 701 at 724-5, per Hoffmann J; Continental Bank NA v Aeakos Campania Naviera SA [1994] 1 WLR 588 at 592, per Steyne LJ; Francis Travel Marketing Pty Ltd v Virgin Atlantic Airways Ltd (1996) 39 NSWLR 160 at 165, per Gleeson CJ, Meagher and Sheller JJA concurring. In this way, the parties are spared the trouble, expense and risk of essentially sterile and technical jurisdictional arguments. See, too, Mansell v Cumming (1989) 86 ALR 637 at 643, per Northrop J, Aafjes v Kearney [1976] HCA 5; (1976) 180 CLR 199 at 206, per Gibbs J. It is not likely that Parliament creating a tribunal such as the Domestic Building Tribunal would have been less inclined to avoid this difficulty for the disputants its tribunal was to serve. To my mind, the court should strive to construe the Act wherever possible to give effect to this objective. It would be regrettable indeed if, in a given case, disputants were obliged to submit part of their claim to the Tribunal, part to the court and, perhaps subject to s14 of the Act, a third part to arbitration.

In my opinion his Honour was correct in rejecting the submission put on behalf of Greenhill Homes that a claim against it for damages for misleading and deceptive conduct as alleged in this case is not within the jurisdiction of the Tribunal.”

In Independent Finance Group Pty Ltd v Mytan Pty Ltd & Anor [2001] QCA 306 Thomas JA said about the jurisdiction of an adjudicator:

“Chapter 6 of the Act (ss 182-249) in which the provisions concerning the adjudicator’s powers are contained, is concerned with dispute resolution. The primary object of the Act is declared to be “to provide for flexible and contemporary communally based arrangements for the use of freehold land having regard to the secondary objects”. One of the primary objects is the operation and management of community titles schemes. The secondary objects include flexible administrative and management arrangements for community titles schemes, and “to provide an efficient and effective dispute resolution process”. In this context it is not surprising to find a provision such as 223(3)(u) which permits a virtually direct managerial solution to defeat a certain type of unreasonable conduct that might otherwise frustrate an objective that could otherwise only be attained by a resolution without dissent. Such a power may seem surprising to those used to the independent management of companies, but there seems little doubt that the legislature has here deliberately established a mechanism for the resolution of community titles scheme disputes in this way. The difficulty of obtaining remedies such as specific performance in the context of disputes which required some action to be taken by the body corporate, and the sometimes unsatisfactory nature of legal remedies in such a context must have been apparent[8]. That is not to say that recourse may not be had to the courts or that legal remedies are unavailable. There remains of course a concurrent jurisdiction, and the ultimate power of the Supreme Court to restrain concurrent proceedings[9], although experience suggests that the court is generally reluctant to grant injunctions to restrain a party from exercising rights in a tribunal entrusted with a particular task and possessed of a particular expertise[10].” (my underlining)

In Burnitt Investments Pty Ltd v Body Corporate for St Andrews Comminity Titles Scheme 20508 [2002] Qdc 006, Judge Brabazon QC said at [17]; “The words “just and equitable” are words of the widest significance and do not limit the jurisdiction of the court. It is a question of fact. Each case must depend on its own circumstances (Re Kurilpa Protestant Hall Pty Ltd (1946) SR Qd 170 of 183).”
That statement was cited with approval in Sandhurst trustees Ltd v Condah Bay Investments Pty Ltd [2003] QDC 438. and in Fisher v Body Corporate for Centre Point Community Title Scheme [2004] QDC 017.

Applicant's submissions on application 0215-2005

The applicant by correspondence dated 20 June 2005 sought leave to amend the order sought so that rather than being restricted to directing the body corporate to pay the applicant for the month of February pursuant to the management agreement it sought such an order without reference to February.
Leave was granted.
The applicant submits that a specialist adjudicator may make an order in relation to the process to be followed in respect to any application provided that the rules of natural justice are followed. Before leave was granted the respondents were given sufficient opportunity to respond to the request for an amendment to the application. It is said the respondent did not make any submissions.
The applicant sought the amendment of the application because after the original application was filed on about 22 March 2005 the respondent did not pay the applicant remuneration said to be owing under the management agreement for the months of March, April and May 2005. The applicant submits that the application should have been amended as leave was given so to do because other wise separate applications covering the same matter would be required causing extra costs and requiring more hearing time. She submits that to require separate applications would be contrary to the intent of the Act to provide a dispute resolution process that is as simple as possible.
She submits that the injunction sought is not too wide and has been stated with sufficient clarity and precision. She submits that the relief sought is only in respect of the months February, March, April and May and is final relief. It appears from the submissions made that as at July 2005 the applicant’s remuneration was paid. The applicant submits that since the application (22 March 2005) and the amendment (20 June 2005) were made before the payment she should be entitled to costs of and incidental to the application.
There is Authority for proposition that I do not have jurisdiction to award legal professional costs apart from the costs of the adjudication.[11] I consider that authority binds me on the question of costs.
The applicant relies on some of the matters going to jurisdiction already raised in application 0197-2005 and submits that in the event the applicant is able to establish that the body corporate was not entitled to withhold her remuneration it would be just and equitable to direct the body corporate to meet the payment for her adjudication.

Respondents Submissions in 0215/2005

The respondent submits that an adjudicator has no power to amend an application once it has been referred.
Further, in response to the applicant’s submission that at the time the amendment was effected the body corporate’s behavior indicated that it would continue to withhold the applicant’s remuneration indefinitely the respondent submits that there was no such indication on behalf of the respondent.
A submission is made that there is no jurisdiction to make the order sought as, it is said there is no dispute to resolve since it is said the applicant has been paid her entitlements pursuant to the management agreement.
The respondent referred to what it says is a clear contemplation of limits to relief sought in sections 270(1)(a) and (b) and 276(5)(a) of the Act. It also submits that the order sought is too wide and it does not specify that it is final relief.
Whilst referring to section 276 of the Act and the power of an adjudicator to make an order that is just and equitable in the circumstances including a declaratory order to resolve a dispute says that there is no express provision which confers equitable jurisdiction and submits that the decisions in Chandalay [2004] QBCCM Cmr 105 and Fletcher [2005] QBCCM Cmr 85 are to the effect that no equitable jurisdiction is conferred.
The respondent’s submission seek to distinguish the decision in Greenhill Homes as being concerned with legislation which expressly provided for an award of damages. It is then submitted that there is no jurisdiction to deal with the application and in the alternative because there is no equitable jurisdiction there is no jurisdiction to deal with the application.
As to costs the respondent says that it sought clarification of the amendments to which it received no response. It also refers to section 280(2) which provides “Unless the adjudicator otherwise orders, the applicant is responsible for the costs of the adjudication.”
It submits that there is nothing in the circumstances which warrant a departure from the usual rule and refers to section 270(1) of the Act.
In Chandalay the adjudicator dealt with a submission that the application should be dismissed under section 270(1) and continued to hear the application.. In considering a submission that adjudicators do not have equitable jurisdiction expressly conferred on them said “while I accept that adjudicators do not have equitable jurisdiction expressly conferred upon them , I consider that the power in section 276(1) of the Act to make orders that are “just and equitable”....is broad enough to enable me to consider whether or not the body corporate should be prevented from relying on the respondents failure to comply with the legislation to necessarily require removal of the improvements” The adjudicator then considered the elements of estoppel[12] to assist in determining what would be a just and equitable order.
In Fletcher the adjudicator recognized that the Act did not expressly confer equitable jurisdiction on an adjudicator and then regarded section 276 as imposing on an adjudicator the overarching duty to make an order that is just and equitable in the circumstances to resolve a dispute and applied the equitable doctrine of a fraud on the minority.
In Acapulco [200] QBCCMCmr 124 the adjudicator considered an application for damages under three heads, loss of income, damage to a chair and damage to a carpet.. Jurisdiction to make such orders does not seem to have been argued. The adjudicator made some orders and not others basing his decision on what would be a just and equitable order.
Similar considerations were raised in Yallock [200] QBCCMCmr 152. Again where damages were awarded it was done on the basis of what was just and equitable. Damages were also awarded in Peninsula Court [2004] QBCCMCmr 122 and Pine Court Lodge [2005] QBCCMCmr 33 to name but a few instances.

DECISION

The starting point in any question of jurisdiction is whether an application has been made by a person who is a party to or is directly concerned with a dispute to which Chapter 6 of the Act applies.[13]
In my view there is clearly a dispute between the body corporate and a caretaking service contractor for the scheme as covered by section 227 (1)(d).
An application has been made and the appropriate actions taken under Chapter 6 part 4 of the Act.
I have in making these determinations had regard to the purposes of the Act and in particular that of part 9[14] and sections 228 and 229 of the Act.
As has been noted many times section 276 provides for orders of adjudicators. Section 279 provides for a power to make interim orders. Section 284 allows an order to contain ancillary and consequential provisions considered necessary. The express limitation on an adjudicators powers is that there is no power to resolve a question about title to land.
None of the issues raised herein concern a question about title to land.
The qualification to any order that I may make concerning a dispute as defined in the Act is that it must be “just and equitable in the circumstances (including a declaratory order) to resolve a dispute in the context of a community titles scheme “about the matters set out in section 276(1) .
I consider that the current disputes are disputes about a claimed or anticipated contractual matter about the engagement of a person as a service provider for a community titles scheme[15] or between the body corporate and a caretaking service contractor/or letting agent for the scheme[16].

Application 0197/2005 – Decision

There is no express power conferred to award damages (expressed as a claim for appropriate compensation) for unreasonable refusal of the body corporate to provide consent to the proposed assignment. I find that I do not have jurisdiction or power to award damages in such circumstances. I do not regard such an order as being a “just and equitable” order in the circumstances to resolve a dispute. I place some emphasis on the purpose of the order namely “to resolve a dispute”. The “dispute” is whether an alleged refusal or withholding of consent by the body corporate to the proposed assignment of the management rights was unreasonable. I do not regard the sought after order as being “just and equitable” in the circumstances to resolve that dispute. I do consider that I have jurisdiction, or more correctly put, power to make an order or declaration concerning the alleged withholding of consent.
I do not consider the sought after order for damages as being ancillary and consequential and appropriate to any possible finding (if there is such a finding) of an unreasonable withholding of consent.
I have had regard to the purposes and aims of the Act and the reasoning in Greenhill Homes but I find that the order sought does not have sufficient nexus with this dispute resolution. I do not find that there is a power to make such an order as implied or incidental to the exercise of the jurisdiction conferred on a specialist adjudicator.
I find that such a power does not flow from the Act as properly construed. In so deciding I also had regard to the fact that the legislature specifically provided (by section 281) for a power to order payment as a reimbursement for repairs carried out. The fact that there is nothing in the Act which would prevent the making of the order does not operate so as to positively give jurisdiction or power to make the order sought.
I dismiss that part of the application which seeks an order that the body corporate pay to the applicant compensation for the asserted unreasonable refusal to provide consent to the proposed assignment.
I do not find that the application was frivolous, vexatious, misconceived or without substance so as to attract an order under section 270(3) of the Act.

Costs

Because I have either declined to find the application in 0197/2005 was covered by section 270(3) of the Act or have refused to dismiss the applicants made in 0215/2005 I do not make any order so as to compensate any party for costs associated with these rulings. I reserve the costs of the adjudication of the matters determined herein to the final adjudication and order. I will hear from the parties as to the further resolution of the outstanding matters in dispute.
In accord with the requirements of section 274 a copy of this decision and orders provided to the applicant and the body corporate. There were no persons who made a submission on an invitation under section 243 or 271(1)(c).

Application 0215/2005 – Decision

I find that there is a power to amend an application once it has been referred. I find that the amendment was reasonably necessary in the circumstances and allowed the parties and the adjudicator to deal with the essential dispute between the parties. The amendments in my view covered issues raised in dispute between the parties and covered the essential dispute whilst not limiting the order sought to one month only. The amendments would in any event have been ancillary and consequential provisions necessary and appropriate to determine the dispute. I consider that the wider ambit of such an order would be “just and equitable” in the circumstances to resolve the dispute.
Given the submissions made it would now seem that payments have been made pursuant to the management agreement and an order directing the body corporate to meet the payment of the applicants remuneration may not be necessary.
In my opinion, I do have power to make the orders sought in this application. I find that such orders are capable of being orders which are “just and equitable” to resolve this dispute which I consider is within jurisdiction.
Accordingly, I refuse to dismiss the applications made in 0215/2005.

...............................
P J Favell
Specialist Adjudicator
16 February 2006
I certify that this is a true copy of my orders and decision on the preliminary points raised in application 0197/2005 and 0215/2005.

...............................
Paul Favell

Number 0197/2005
Number 0215/2005

Applicant Jane Marie Lamason

Respondent Body Corporate for Il Villaggio CTS

The Applications

By a dispute resolution application (0197/2005) dated 15 March 2005 the applicant sought two outcomes. Namely:
- (c) a declaration that the body corporate’s withholding of consent to a proposed assignment of management rights by the applicant to Susan Ridley was unreasonable.
- (d) an order that the body corporate pay to the applicant appropriate compensation for the body corporate’s unreasonable refusal to provide consent to the proposed assignment.
By a dispute resolution application (0215/2005) dated 22 March 2005 the applicant sought eight outcomes numbered in paragraph 5 of the application.
Those outcomes include:
- (h) a mandatory injunction directing the body corporate to meet the payment of the applicants remuneration under the terms and conditions of the management agreement dated 12 October 2000 for the month of February 2005;
- (i) that pursuant to clause 13 of the management agreement the body corporate nominate one member of the body corporate committee to liaise with the applicant;
- (j) that any notice provided by any other member of the body corporate committee to the applicant or any instruction provided shall have no effect and the applicant shall not be bound to acknowledge any such notice or instruction;
- (k) that the body corporate refrain from issuing frivolous vexatious and or misconceived breach notices;
- (l) the applicant shall only be obliged to meet the member the body corporate committee nominated under clause 13 of the management agreement once every three weeks at a time and on a date suitable to both parties;
- (m) that at least two days prior to any meeting referred to in the previous order the authorized member shall provide the applicant with an adequately particularized agenda of matters to be discussed at the meeting; and
- (n) that in all future dealings with the applicant the body corporate shall be required to act reasonably and in good faith.
Those outcomes are reflected in orders sought by the applicant.

Interim Order Sought

In correspondence sent to the Office of the Commissioner from Mahoney Lawyers the applicant sought an urgent interim order.
Section 265 of The Body Corporate and Community Management Act 1997 (the Act) provides for the adjudication of particular disputes by a specialist adjudicator which include anticipated or claimed contractual matters as defined in Schedule 6, about the engagement of a person as a body corporate manager or caretaking service contractor for a community titles scheme or the authorization of a person as a letting agent for a community titles scheme.
The Body Corporate and Community Management Act 1997 in section 276 allows an Adjudicator to whom an application is referred to 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 title scheme”. Some orders an adjudicator may make are set out in schedule 5. I am not restricted to those orders. I am able to require persons to act in a way stated in an order about the exercise of rights or powers under the Act and claimed or anticipated contractual matters about the engagement of a person as a body corporate manager or service contractor.
Section 279 allows an Adjudicator to 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.
The basis for an interim order which was sought is contained in a letter dated 30 March 2005 from Mahoney Lawyers to the Office of the Commissioner for Body Corporate and Community Management in which it is said:

On 18 April 2005 supplementary submissions for the application for an urgent interim order were received from Mahoney Lawyers in the following terms:

On that basis I was prepared to consider whether an interim order should be made in the terms that the body corporate be directed to meet the payment of the applicants remuneration under the terms and conditions of the management agreement dated 12 October 2000 for the month of February 2005.

Management Agreement

The management agreement dated 12 October 2000 by clause 2 obliges the body corporate to pay the applicants remuneration by way of calendar monthly installments in arrears:

“Remuneration of Manager

Clause 3 of the management agreement provides for the duties of the manager.

Factual Matters

For the purposes of considering whether an interim order should have issued in the terms set out above, I assumed the following facts to be correct (and I still make those assumptions on the final decision):
- (g) By deed of assignment dated 30 October 2003 the applicant was assigned the management rights for “Il Villaggio”.
- (h) The management rights are contained in the management agreement provided to me dated 12 October 2000 between the Body Corporate for “Il Villaggio” Community Title Scheme 28518 and Arthur Neville Harvey.
- (i) Clause 8 of the management agreement provides for termination by the body corporate and clause 9 provides for termination otherwise.
- (j) Clause 12 provides for arbitration; and
- (k) Clause 13 provides for the giving of instructions from the body corporate to the manager.
- (l) Clause 13 provides:

The schedule referred to in the body corporate agreement by paragraph 1 provides:

In the application it is asserted that:

I have been provided with a letter dated 18 March 2005 signed by Toni Leigh the apparent chair person of “Il Villagio” addressed to the resident unit manager. That letter outlines a number of items that require attention from January and/or February 2005. It requests that the matters outlined be actioned within 14 days. The letter then contains the following:

The letter referred to occasions on which it was said a notice to remedy had been issued by the body corporate and asserted that on 15 February 2005 the body corporate wrote to advise that a satisfactory response had not been received and that the resident unit manager was in breach of the management and letting agreements. At the interim decision stage and without determining the merit or otherwise of the complaints or of any responses to those allegations I noted that the remuneration is in consideration of the performance by the manager of the duties set out in clause 3. Clause 8 provides for the termination of the agreement by the body corporate by notice in writing to the manager in the event that the manager fails or neglects to carry out the duties pursuant to the agreement without good reason and such failure or neglect shall continue for a further period of 28 days after notice in writing shall have been given to the manager specifying the duty which the manager has failed or neglected to carry out and calling upon the manager to perform such duty. I do not see anything in the agreement which allows for there to be a set off or for remuneration to be withheld subject to the statement that the remuneration is in consideration of the performance of the duties.
I have taken into account the five matters set out in the supplementary submission.

Order Made Previously

Without making any final determination of any of the matters raised in the application on 19 April I indicated that in my opinion it was appropriate to make an interim order directing the body corporate to meet the payment of the applicant’s remuneration for the month of February 2005 and I so ordered. Because of the nature of this order and the material available to me I gave liberty to apply on 2 days notice concerning that order. So that all of the matters sought can be determined I made directions accordingly.
Those directions were made at a directions hearing held on the 21st of September 2005.
Because of those directions I was provided with submissions in respect of the preliminary matters on behalf of the body corporate for application numbers 0197-2005 and 0215-2005 .
Additional submissions I had regard to included correspondence from Mahoney Lawyers dated 18 August and 23 August 2005, from Dibbs Abbott Stillman and Geoff and Val Ivett and Meta Walden and Toni Leigh.

Preliminary Matters Raised

At the directions hearing on the 21st of September 2005 I was at that time asked to consider whether I had the power to award damages in application 0197-2005.
I was also asked to consider whether I had the power to give a mandatory injunction in application 0215-2005 and if so in what terms.
I agreed to consider those matters as preliminary matters and made directions. The costs were reserved.
The Body Corporate and the applicant supplied written submissions in respect of Application number 0197-2005 and application number 0215-2005 on the interim matters concerning jurisdiction and any power to allow amendments to an application.
The applicant by correspondence dated 20 June 2005 sought leave to amend the order sought so that rather than being restricted to directing the body corporate to pay the applicant for the month of February pursuant to the management agreement it sought such an order without reference to February.
Leave was granted.

JURISDICTION, POWERS AND ORDERS POSSIBLE

The starting point in any question of jurisdiction is whether an application has been made by a person who is a party to or is directly concerned with a dispute to which Chapter 6 of the Act applies.[17]
In my view there was and is clearly a dispute between the body corporate and a caretaking service contractor for the scheme as covered by section 227 (1)(d).
An application has been made and the appropriate actions taken under Chapter 6 part 4 of the Act.
I have in making these determinations had regard to the purposes of the Act and in particular that of part 9[18] and sections 228 and 229 of the Act.
As has been noted many times section 276 provides for orders of adjudicators. Section 279 provides for a power to make interim orders. Section 284 allows an order to contain ancillary and consequential provisions considered necessary. The express limitation on an adjudicators powers is that there is no power to resolve a question about title to land.
None of the issues raised herein concern a question about title to land.
The qualification to any order that I may make concerning a dispute as defined in the Act is that it must be “just and equitable in the circumstances (including a declaratory order) to resolve a dispute in the context of a community titles scheme “about the matters set out in section 276(1) .
I consider that the current disputes are disputes about a claimed or anticipated contractual matter about the engagement of a person as a service provider for a community titles scheme[19] or between the body corporate and a caretaking service contractor/or letting agent for the scheme[20].

DECISION ON PRELIMINARY MATTERS

On 16 February 2006 I decided on the preliminary questions in respect of application 0197-2005 as follows (with reasons):
1. There is no express power conferred to award damages (expressed as a claim for appropriate compensation) for unreasonable refusal of the body corporate to provide consent to the proposed assignment. I found that I do not have jurisdiction or power to award damages in such circumstances. I did not regard such an order as being a “just and equitable” order in the circumstances to resolve a dispute. I placed some emphasis on the purpose of the order namely “to resolve a dispute”. The “dispute” is whether an alleged refusal or withholding of consent by the body corporate to the proposed assignment of the management rights was unreasonable. I did not regard the sought after order as being “just and equitable” in the circumstances to resolve that dispute. I did consider that I have jurisdiction, or more correctly put, power to make an order or declaration concerning the alleged withholding of consent.
2. I did not consider the sought after order for damages as being ancillary and consequential and appropriate to any possible finding (if there is such a finding) of an unreasonable withholding of consent.
1. I had had regard to the purposes and aims of the Act and the reasoning in Greenhill Homes but I found that the order sought does not have sufficient nexus with this dispute resolution. I did not find that there is a power to make such an order as implied or incidental to the exercise of the jurisdiction conferred on a specialist adjudicator.
1. I found that such a power does not flow from the Act as properly construed. In so deciding I also had regard to the fact that the legislature specifically provided (by section 281) for a power to order payment as a reimbursement for repairs carried out. The fact that there is nothing in the Act which would prevent the making of the order does not operate so as to positively give jurisdiction or power to make the order sought.
2. I dismissed that part of the application which sought an order that the body corporate pay to the applicant compensation for the asserted unreasonable refusal to provide consent to the proposed assignment.
3. I did not find that the application was frivolous, vexatious, misconceived or without substance so as to attract an order under section 270(3) of the Act.
On 16 February 2006 I also decided on the preliminary question in respect of application 0215-2005 as follows (with reasons):
1. I found that there was a power to amend an application once it has been referred. I found that the amendment was reasonably necessary in the circumstances and allowed the parties and the adjudicator to deal with the essential dispute between the parties. The amendments in my view covered issues raised in dispute between the parties and covered the essential dispute whilst not limiting the order sought to one month only. The amendments would in any event have been ancillary and consequential provisions necessary and appropriate to determine the dispute. I considered that the wider ambit of such an order would be “just and equitable” in the circumstances to resolve the dispute.
2. Given the submissions made it seemed that payments have been made pursuant to the management agreement and an order directing the body corporate to meet the payment of the applicants remuneration was not be necessary.
1. In my opinion, I did have power to make the orders sought in this application. I found that such orders are capable of being orders which are “just and equitable” to resolve this dispute which I consider is within jurisdiction.
1. Accordingly, I refused to dismiss the applications made in 0215/2005.
At that time I also decided in respect of costs sought the following (with reasons):
1. Because I had either declined to find the application in 0197/2005 was covered by section 270(3) of the Act or had refused to dismiss the applicants made in 0215/2005 I did not make any order so as to compensate any party for costs associated with those rulings. I reserved the costs of the adjudication of the matters determined therein to the final adjudication and order.
Since those decisions I have been asked to decide the outstanding matters.

OUTSTANDING MATTERS

The outstanding matters requiring determination are:
1. whether the body withholding of consent to a proposed assignment of management rights to Susan Ridley by the Body Corporate was unreasonable;
2. whether any of the outcomes sought in application 0215-2005 should be the subject of orders.

OBLIGATIONS AND MATTERS TO BE CONSIDERED

Section 82 of the Accommodation Module (the applicable module to Il Villaggio) provides (where relevant):

“82 Transferring engagements and authorizations:

(1) A person’s rights under an engagement as a body corporate manager or service contractor, or under an authorization as a letting agent, may be transferred only if the body corporate under the engagement or authorization approves the transfer.

(2) To avoid doubt, it is declared that the approval may be given by resolution of the committee (unless the decision on the approval is a decision on a restricted issue for the committee) or by ordinary resolution of the body corporate.

(3) In deciding whether to approve a proposed transfer, the body corporate may have regard to-

(a) the character of the proposed transferee and related person of the proposed transferee; and

(b) the financial standing of the proposed transferee; and

(d) the competence, qualifications and experience of the proposed transferee and any related persons of the proposed transferee, and the extent to which the transferee and any related persons have received or are likely to receive training; and

(e) matters to which, under the engagement or authorization, the body corporate may have regard.

(4) The body corporate must decide whether to approve a proposed transfer within 30 days after it receives the information reasonably necessary to decide the application for approval.

(5) The approval may be given on condition that the transferee enters into a deed of covenant to comply with the terms of the engagement or authorization.

(6) The Body Corporate must not-

(a) unreasonably withhold approval to the transfer; or

(b)require or receive a fee or other consideration for approving the transfer (other than reimbursement for expenses reasonably incurred by the body corporate in relation to the application for its approval)....”

I have to have regard to the matters which because of section 82(3) the Body Corporate may have regard to in deciding whether it will approve a proposed transfer.
The body corporate must not unreasonably withhold approval to the transfer.
The applicable Management Agreement which had been assigned to the applicant provided for the management rights for Il Villaggio. Clause 6 allowed the manager to assign the manager’s interest to any person provided that person was “responsible, respectable and financially sound and capable of conducting the obligations of the manager”. The manager has the obligation of providing information about those requirements and the body corporate must, acting reasonably, determine whether those requirements are met. Further, the body corporate may not unreasonably withhold its consent to any assignment.
Clause 5 of the applicable letting agreement allows the letting agent to assign the letting agents interest in the agreement to any person who is “reasonable, respectable and financially sound and capable of conducting the obligations of the letting agent”. The letting agent has the responsibility of providing information about such a person and the decision of the Body Corporate is to be determined by a majority vote of the Committee of the Body Corporate.

INFORMATION PROVIDED TO BODY CORPORATE AND DECISION OF BODY CORPORATE

By a letter dated 3 November 2004 lawyers for the applicant forwarded information seeking to address the matters of suitability. On 17 November 2004 the Committee of the Body Corporate met with the proposed purchaser and asked her to complete two questionnaires. Those questionnaires were completed and supplied to the Body Corporate. On 16 December 2004 the Body Corporate Committee resolved not to consent to the assignment. By a letter dated 23 December 2004 solicitors for the Body Corporate advised that the Body Corporate’s reasons for not consenting to the assignment were based on Section 82(3) of the Accommodation Module and the terms of the management agreement.

SUBMISSIONS OF THE BODY CORPORATE

The submissions of the Body Corproate raise the matters of jurisdiction to award damage, the application of a time limit contained in section 242 of the Act and reasonableness of the refusal.
The jurisdiction in question has already been dealt with and the application in that regard dismissed.
As to the application of any time limit, I do not find that this application for a declaration falls foul of section 242 of the Act. That section applies to an application for an order declaring void a resolution of the committee or body corporate. In this case the applicable discussion was made on 16 December 2004 and the application made on 15 March 2005. It is within the allowed time.
As to the question of “reasonable refusal” the submissions of the Body Corporate are:

“it became apparent to the members of the body corporate that Ridley

may not have the financial standing to qualify as an appropriate person to be the resident unit manager;
may not be responsible, respectable or of an appropriate character to be the resident unit manager; and

did not have the appropriate competence, qualifications and experience necessary to be the resident unit manager and was not capable of conducting the obligations of the resident unit manager under the Management Agreement.”

Whilst some phrases in that submission pick up wording in clause 6 of the Management Agreement they also pick up some of the wording in Section 82 of the Module. Generally they are appropriate matters to have regard to.
In concluding that the proposed purchase may not have the financial standing to qualify as an appropriate person the Body Corporate Committee relied upon an answer said to be given to question 2 of the first questionnaire. The question was: “Are you borrowing more than 55% of the value of the manager’s unit and management rights?”. The answer was: “ Based on income available we are and our financier are satisfied as to our ability to meet out borrowing commitments”.
That answer is categorized by the submission as an “attempt to evade the question” and that is said to have led the body corporate to reasonably believe the negative to the question, and because of that a belief that Ms Ridley did not have the financial standing nor was financially sound. Further because of the answer they concluded that Ridley was being uncooperative and therefore may not be responsible, respectable or of an appropriate character.
In my opinion the question asked makes an assumption that a negative answer would led to the conclusion that Ridley did not have an appropriate financial standing and/or was not financially sound. In my opinion that conclusion is not based on reason. If the answer raised a concern, further enquiries should have been made.
Further, it is submitted that the Body Corporate found Ridley may not be responsible, respectable or of an appropriate character because Ridley did not answer a number of questions thus indicating uncooperativeness.
The examples of failure to answer are the questions which appear on page 3 and 5 of the first questionnaire. I do not see how the failure to answer some of those questions amount to being uncooperative especially when one of them did not require an answer .
As to the answer to the question on page 3 concerning the entity buying the management rights and the managers unit the answer was “the unit contract and the manager’s rights contract are conditional upon each others completion. One will not settle without the other. There is no need for a further deed.” While that answer did not give the names of the entity or entities it did make reference to the conditional nature of the two purchases. The contracts for the management rights makes specific reference to a licence to use the unit. Again the answers given in my view do not reasonably allow the conclusions set out to be drawn.
The third conclusion the body corporate reached was based on the following summarized factors:
- (a) a half page resume only;
- (b) no prior experience in management rights;
- (c) no details of previous experience in undertaking general handyman duties;
- (d) the lack of a second business reference requested;
- (e) an unsatisfactory answer to the question “do you have a written business plan?”;
- (f) perceived inadequate and brief answers to the second questionnaire said to display a lack of detail, effort, understanding and experience in unit management and letting issues;
- (g) a perceived lack of understanding of duties pursuant to the schedule of duties;
- (h) a conclusion reached on the basis of an answer which included the words “we don’t really know any Chinese or Taiwanese and we don’t want to” that there was a prospect that Ridley would discriminate against or was incapable of working for or with, Chinese or Taiwanese people;
- (i) a lack of understanding of the level of work and effort in being a Resident Unit Manager based on an indication that she anticipated working 10 hours per week spread over 5 days and the answer “the longer we are here the less hours we will have to put in”;
- (j) a perception of plagiarism or reproduction of the current managers answers to the questions apparently asked of them before they became managers.
A further reason is relied upon for the refusal it, being that the proposed Deed of Assignment did not contain a term which imposed a continuing liability on Lamason until such original term of the agreement had expired, which it is claimed the respondent was reasonably entitled to require.

SUBMISSIONS OF THE APPLICANT

The submissions in reply from the applicant raise the question of whether the refusal was capricious or arbitrary. They rely upon the decisions in Frederick Berry Ltd v Royal Bank of Scotland (1949) 1 KB 619; Secured Income Real Estate (Australia) Ltd v Saint Martins Investments Pty Ltd (1979) 144 CLR 956.
They submitted that the general principle expressed by Walsh J in Colvin v Bowen (1958) 75 WN (NSW) 262 applying to the unreasonable withholding of consent to the assignment of a lease that “the grounds upon which a refusal may be based must be concerned either with the character and personality of the proposed assignee or with matters effecting the use or occupation of the premises which may result from the proposed assignment” apply to cases concerning the unreasonable withholding of consent to the assignment of management rights.
I accept that so far as it goes and add that they must also be concerned with the ability of the proposed assignee to carry out the management duties.
The applicant also submits that the Body Corporate would not be acting reasonably if the purpose for refusing consent was not related to the suitability of Susan Ridley as a resident unit manager but for a collateral advantage. (J.A. McBeath Nominees Pty Ltd v Jenkins Development Corporation Pty Ltd [1992] 2 QdR 121).
I accept that the Body Corporate can not make the decision to refuse so that the refusal is designed to achieve some collateral purpose wholly inconsistent with the terms of the management agreement.
Accordingly there is a question raised whether the refusal was a refusal not for the reasons given in the submissions but for collateral reasons outside of the terms of the management agreement.
In my opinion the applicant has the responsibility of showing that the refusal was not for the reasons given but for a collateral reason outside of the terms of the management agreement or that the reasons given for the refusal amounted to an unreasonable refusal to consent to the assignment.
In an endeavour to overcome that onus the applicant submits:
- (a) over the last 6 months the Body Corporate has issued an absurd number of breach notices in circumstances where they are malicious, vexatious, oppressive and/or misconceived;
- (b) the Body Corporate seeks to terminate the applicants caretaking and letting agreement so as to enable it to enter into an agreement with another;
- (c) the Body Corporate should be restricted to reasons which are contained in the document headed “Notes on interview 16 December 2004” on page 2 because the document states that a vote was taken and recorded by John Millard before Mr. Stewart was asked to comment and various telephone calls were taken; (Tamsco Ltd and Ors v Franklins Ltd and Ors (2001) NSWSC 1205 per Young J)
- (d) a blanket refusal to consent to an assignment on grounds that Susan Ridley required finance and had no prior experience would be unreasonable; (Spintar Pty Ltd v Ranieri Nominees Pty Ltd (NSWSC, Bryson J, 1 February 1991, unreported); M & G Jaz Pty Ltd v Retzam Pty Ltd [2004] VCAT 866 referred to).
- (e) the Body Corporate’s attitude towards Susan Ridley was fixed and rigid and there was no real consideration of whether the consent should be given;
- (f) the answers to questions dealing with finance and experience relied upon by the Body Corporate are not such in the circumstances to be the basis of a reasonable withholding of consent;
- (g) the Body Corporate was in error in its perception of the duties to be performed and accordingly reliance upon any assertion of an inability to carry out those perceived duties which were additional to contractual requirements could not be reasonable;
- (h) the fact that the committee only spent 5 minutes in discussing the proposed assignment is an indication of a lack of reasonable consideration;
- (i) any requirement for borrowing of 55% or less of the value of the managers unit and management rights is not reasonable;
- (j) the answers to the questions in the first questionnaire were not uncooperative or dishonest and the Body Corporate had already been supplied with documentation which provided answers to questions concerning proposed ownership;
- (k) answers to other questions supplied answers to the questions concerning ownership;
- (l) the Body Corporate committee was well aware that the Ridleys would be purchasing the managers unit as joint tenants;
- (m) the Body Corporate committee had the opportunity to obtain further information or clarify any matters during two meetings with the Ridleys and the Body Corporate did not avail itself of the opportunities;
- (n) there is a likelihood that the Body Corporate committee had made an arbitrary decision based on Susan Ridley’s inexperience and there was no basis on objective evidence;
- (o) the Body Corporate should have raised any dissatisfaction with the completed questionnaires at the meetings with the Ridleys and because they did not do so they should be estopped from raising any dissatisfaction now;
- (p) there is evidence from Carol McDougall, Linda Bayliss and Barbara Platt that Susan Ridley was honest, of integrity, trustworthy and of good moral character;
- (q) Susan Ridley had appropriate competence qualifications and experience in that she had been chairperson of another Body Corporate and she had five years experience in the management off a convenience store;
- (r) there is evidence that prior experience as a resident unit manager is not necessary for a person to be able to adequately discharge required duties;
- (s) Susan Ridley subsequently purchased other management rights and has discharged her duties in that role to a very high standard (I note the submission but I do not regard it as an appropriate consideration as to the reasonableness of the decision taken);
- (t) the Ridleys were well capable of carrying out handyman tasks;
- (u) any decision based on a failure to provide two written business references is unreasonable particular by when no further reference was sought;
- (v) it was not reasonable to require a written business plan and it was appropriate for the Ridleys to follow the usual practice of the previous manager;
- (w) the answers given to questions 3, 4, 5 and 6 were adequate or not required;
- (x) any decision based on Susan Ridley denying that she had to carry out duties not required by the caretaking agreement is not reasonable;
- (y) Susan Ridley did not make various statements attributed to her in paragraphs 3.14(g), (h) and (i) of the Body Corporate’s submissions;
- (z) the reproduction of the previous managers answers to questions was not relevant to the decisions to be made concerning the consent;
- (aa) the requirement of a continuing liability on the exiting unit manager in the deed of assignment was not, usual practice, previously sought or give; and was unreasonable and not legally open (Le Coz v Innominata Pty Ltd (1999) v Conv R 58-539).

REASONABLENESS

It is apparent from the submissions that there are some factual disputes about what happened at the meetings between the Body Corporate and the Ridleys. In my view it is not necessary for me to finally determine where the truth lies because those factual matters even if assumed to be correct as submitted by the Body Corporate do not in my view detract from the unreasonableness of the decision to withhold approval.
I have had regard to the qualified assertions concerning Ridley.
I do not accept that the Body Corporate could have reasonably found on the basis of the material presented to me that Susan Ridley was uncooperative, evasive, or dishonest. It may be unreasonable to reach such a conclusion based on the answers to the questions asked and the answers without inquiring further and in this case I think that is so.
Part of the material I have had regard to includes a Statutory Declaration of Howard Stewart.
Of some concern in this matter is the feeling of Mr. Stewart that what he regards as unreasonable treatment of Jane Lamason has been calculated to reduce the salability of her management rights business and force her to abandon her business.
If that is correct such conduct has a bearing on whether the Body Corporate was acting reasonably in that in my view they are not entitled to use pedantic reasoning to find an excuse to refuse consent in order to further their own goals.
In this case I note that the reasoning set out in the submissions on behalf of the Body Corporate was not provided before this application. In my view that circumstance can be considered in the determination of this application.
In my opinion some of the reasons given in the submissions could give rise to a withholding of consent which may not be unreasonable. In that regard I have noted the alleged lack of understanding of the level of work required and the perception of anticipated working hours. However in my opinion, it was unreasonable not to clarify those matters and enquire further.
I find many of the reasons advanced to be matters which required more investigation or clarification before they could support a reasonable refusal of consent. In that regard I have noted the alleged inadequate resume, lack of details lack of previous experience, lack of a second business reference and unsatisfactory answers.
I doubt the correctness of other reasons given including the nature of the managers duties said to be misunderstood, the result said to flow from the claim of plagiarism or reproduction and the claim of potential racism.
I have had regard to the declaratory material provided on behalf of the applicant.
I find that the applicant has established that consent was unreasonably withheld and accordingly I make the declaration sought in the first of the applicants outcomes.
As to the other orders sought in application 0215/2005 I do not make any order concerning the continuing payment of the managers entitlement under the agreements given that the payments are now occurring.

OTHER ORDERS SOUGHT

The applicant seeks other orders/declarations:
1. an order requiring the body corporate to ensure that any breach notices issued under clause 8 of the Management Agreement are fully and properly particularized and the action which the body corporate requires of the manager be set out;
2. a declaration that correspondence of 18 March 2005 from Toni Leigh is not a valid breach notice in accordance with clause 8 of the Management Agreement;
1. an order that pursuant to clause 13 of the Management Act the body corporate nominate one member of the committee to liaise with the applicant;
1. an order that the body corporate refrain from issuing frivolous, vexatious misconceived breach notices pursuant to clause 8 of the Management Agreement;
2. orders concerning meeting obligations under clause 13 of the Management Agreement.
Clause 8 of the Management Agreement provides:

“This agreement may be terminated by the body corporate by notice in writing to the manager in the event that the manager:

(b) fails or neglects to carry out the duties pursuant to this agreement without good reason and such failure or neglect shall continue for a further period of twenty eight (28) days after notice in writing shall have been given to the manage specifying the duty which the manager has failed or neglected to carry out and calling upon the manager to perform such duty;

Clause 13 of the Management Agreement provides:

“(a) The committee of the body corporate shall from time to time authorise one of its members to give instructions to and communicate with the manager on behalf of the body corporate and not more than one member of the body corporate at anytime shall be given such authority.

(b) The manager will confer fully and freely with the representative of the body corporate if so requested relative to the performance of the duties of the manager herein set forth and shall at the request of the representative of the committee of the body corporate attend by its authorized representative meetings of the committee of members of the body corporate. The representative of the manager shall be entitled to be heard on any relevant question or matter at any such meeting.”

In my opinion clause 13 clearly requires the Body Corporate by its committee to authorise one of its members to give instructions to and communicate with the manager and requires the manager to confer fully and freely with that representative if required relative to the performance of his duties. It also give the manager an entitlement to be heard. It also restricts the authority given by the committee to one person.
In my opinion it is appropriate to construe the management agreement so as to give it business efficiency and to achieve the objects of the agreement. (Codelfa Construction Pty Ltd v State Rail Authority of New South Wales [1982] HCA 24; (1982) 149 CLR 337; Mackay v Dick (1881) 6 App Cas 251 at 263; Secured Income Real Estate (Australia) Limited v Sain Martins Investments Pty Ltd; Perri v Coolangatta Investments Pty Ltd [1982] HCA 29; (1982) 149 CLR 537; Meehan v Jones (182) [1982] HCA 52; 149 CLR 571.
I also accept that the Body Corporate owes the applicant an implied duty of good faith and fair dealing with the applicant in relation to the terms and conditions of the Management Agreement (see Renard Constructions (ME) Pty Ltd v Minister for Public Works (1992) 26 NSWLR 234; Alca Tel Australia Ltd v Scarcella (1998) 44 NSWLR 349.
I have been referred to section 94 of the Body Corproate and Community Management Act 1997 which requires the Body Corporate to act reasonably in the exercising of its powers. I accept that is so.
The applicant submits that the Body Corporate is issuing numerous frivolous, vexatious and/or misconceived notices to remedy breach and is thereby interfering with the applicant’s ability to conduct the duties of her engagement pursuant to the management agreement. The applicant relies upon the meaning of “frivolous and vexatious” set out in Oceanic Sun Line Special Shipping Co In v Fay [1988] HCA 32; (1988) 62 ALJR 389 namely “seriously and unfairly burdensome prejudicial or damaging” and “ productive of serious and unjustified trouble and harassment”.
To make out that submission the applicant has listed numerous examples which she says support the submission. I do not need to repeat those examples. I do regard many of the examples as indications of unnecessary, ill conceived and inappropriate correspondence or demands which in many instances are well outside of the contracted obligations of the applicant.
Further, the applicant contends that the requirement by Toni Leigh and Val Ivett that the applicant attend weekly meetings is unreasonable and outside of her contractual obligations.
In my opinion the obligation of the applicant is to attend properly called and constituted committee meetings and does not extend to meetings which are not so called and constituted.
Further, in my opinion the obligation expressed in Clause 13 to confer with a committee member is to confer with a committee member so authorized by the committee only in so far as the requirements for same is reasonable.
In my opinion, for such meetings to be reasonable there should be some form of agenda or notice given so as to allow the manager to consider matters to be raised. In my opinion it is reasonable for 2 days notice to be given failing any other agreement and that such meetings if required be held monthly, unless extraordinary circumstances dictate otherwise.
The consideration of the matters raised in this application has led me to conclude that the Body Corporate may be seen as intent on making life as difficult as possible for the manager and that it does so in order to force the manager to abandon her business. In my opinion it could be said that much of the complaints made was illconcieved, misconceived or wrong but on the other hand some of them may have some warrant. In my opinion without the aid of oral evidence and cross examination and a more detailed examination of the numerous factual issues, assertions and denials I cannot find that the Body Corporate has been shown to have had an collateral reason for refusal. In any event given my decision that the refusal was not reasonable it is not necessary for me to so decide that question. I have had regard to the indications of support from various unit owners and Mr. Millard and Mr. Stewart which indicate that the performance of the applicant is satisfactory. I have also had regard to the material from members of the committee which is a denial of any collateral reason.

BODY CORPORATE SUBMISSIONS

I have been provided with numerous and extensive complaints from the Body Corporate Committee to the manager and the response thereto.
The Body Corporate opposes the application. It refers to clauses 3, 4, 5 of the Management Agreement and the schedule setting out the Managers duties. It submits that schedule A amounts a “reasonable direction” of the Body Corporate “in and about the administration and management” of the premises within the meaning of clause 3(k) of the Management Agreement and requires compliance by the applicant.
The Body Corporate says that any correspondence and/or notices issued by the Secretary were issued in her capacity as Secretary and amount to a communication from the Body Corporate. I accept that is so but it may not comply with the requirement of clause 13.
It submits that it is entitled to withhold the applicant’s remuneration by way of set off for alleged damages. This is not a matter which I am now called on to decide and I have already made comment about.
It also submits that the applicant has evinced an intention not to be bound by the Management Agreement and there has been a repudiation of the Management Agreement. I do not accept that submission.
It is submitted that the applicant has been in breach of the agreement by failing to adequately carry out her duties. Many examples are given. I have had regard to the claimed frustration and the decision by the committee to issue notices to remedy as and when necessary, such notices to be issued by the Secretary.
I am not called on to determine whether the complaints made about alleged failures to perform required duties were in fact in fact not performed but I have had regard to the nature of the complaints and the amount of them. In any event the material which I have does not allow me to determine whether the complaints are factually correct.
The Body Corporate submits that the notices to remedy breaches and meetings were necessary because of the inaction by the applicant.
The Body Corporate submits the applicant is not entitled to orders 1 and 2. As to the applicants claimed order 3 the Body Corporate submits that section 84 c (4) of the Accommodation Module requires a notice to remedy to state the details of the action sufficient to identify the duties the Body Corporate believes have not been carried out.
No submissions are made by the Body Corporate with respect to order 4 and for the purposes of order 5 the Body Corporate nominates the chairman as the contact person.
The Body Corporate submits that orders 7 and 10 are not supported by any power or ground in the Act. It contends order 8 is not open because of clause 3(w) of the agreement and order 9 is unnecessary.

APPLICANT’S RESPONSE TO SUBMISSIONS OF THE BODY CORPORATE

The applicant acknowledges payment of remuneration and submits that she should have a mandatory injunction and should have the costs of the adjudication including legal costs.
Although they are sought I do not have the power to award legal costs.
With respect to the operation of schedule A referred to in the submissions of the Body Corporate the applicant contends that it has never become part of the agreement.
I accept that whilst schedule A may aid in the interpretation of the duties to be performed by the applicant it has not been incorporated into the Management Agreement. The applicant contends that the schedule does not amount to a reasonable direction and that the duties are set out in the Management Agreement and where schedule A is inconsistent with those set out they cannot amount to a reasonable direction within the meaning of clause 3(k) of the agreement. In my opinion that contention is correct.
I have had regard to the contents of letters from Errol and Jade Pinto, Steve and Teresa Herring and Grant Brown and the submissions made about the improvements to Il Villaggio.
The submissions deny breaches of the Management Agreement, assert harassment, identify a lack of any obligations to some perform duties claimed by the Body Corproate, and claims (with examples) that the correspondence and breach notices issued by Valda Ivett and Toni Leigh were misconceived, petty and frivolous, oppressive, vague and ambiguous. I do not intent to repeat them.
With respect to the content of Notice to remedy breach my attention is drawn to section 84c of the Accommodation Module and the submission is made that the notices do not comply in various respects.

SUBMISSIONS IN REPLY TO THE APPLICANT’S SUBMISSIONS IN RESPONSE

I have had regard to declarations by Toni Leigh, Candy Fan, Valda Ivett, Meta Walden and Susan Nugent.
The submissions address the matters raised by the applicant in reply and in the main deny the allegations of unreasonable refusal and bad faith. They submit that there is insufficient to determine an improper purpose.
I have had regard to the submissions concerning the content and relevance of the declarations of Mr. Millard and Mr. Stewart.

DETERMINATION ON APPLICATION 0197/2005

I declare for the reasons given that the withholding of consent to a proposed assignment of management rights by the applicant to Susan Ridley was unreasonable.

DETERMINATION ON APPLICATION 0215/2005

I decline to make an order directing the Body Corporate to meet the payment of the applicants remuneration as that order is not now necessary.
I order that pursuant to clause 13 of the Management Agreement the Body Corporate nominate a contact person to liaise with the applicant and given the submission by the Body Corporate that person so nominated is the chairman of the Body Corporate.
I declare that any notice provided outside of the terms of the Management Agreement or the Letting Agreement or the Act is invalid as a notice. I also declare that the correspondence from Toni Leigh is not a valid breach notice.
I decline to make an order that the Body Corporate refrain from issuing frivolous, vexatious or misconceived breach notices because such an order requires a determination about the nature of future matters. The parties have an obligation to act reasonably and regard should be had to that obligation when notices are being issued.
As to the costs of the adjudication I determine that the costs of the adjudication should be divided equally between the applicant and the Body Corporate in recognition of the varying degrees of success.
In accord with the requirements of section 274 a copy of this decision and orders is provided to the applicant and the body corporate any persons who made a submission on an invitation under section 243 or 271(1)(c). An outline in the approved form of the appeal rights available accompanies this decision and orders.

...............................
P J Favell
Specialist Adjudicator
21 April 2006

I certify that this is a true copy of my orders and decision on the points raised in applications 0197/2005 and 0215/2005.

...............................
Paul Favell

[1] Section 231
[2] section 236
[3] ex parte Currie; Re Dempsey (1969) 70SR (NSW) 443 at 447.
[4] Parmer v Clarke (1989) 19 NSWLR 158: Australian international insurance Ltd v Graham [2005] VSC 183
[5] District Court Queensland 5.9.1997 , Forno DCJ
[6] [2005] TASSC 44 per Evans J
[7] section 227(1)(d)
[8] cf Birstar Pty Ltd v Proprietors “Ocean Breeze” Building Units Plan No 4745 [1997] 1 Qd R 117.

[9] R v Windridge; Ex parte Pacific Coal Pty Ltd [1992] 2 Qd R 180, 193, 194
[10] R v Windridge; Ex parte Pacific Coal Pty Ltd [1992] 2 Qd R 180, 193, 194.

[11] Woodrange Pty Ltd v Le Grande Broadwater Body Corporate [2004] QDC 215 McGill DCJ SC

[12] Walton Stores (Interstate) Ltd v Maher (1988) 164 CLR 397
[13] Section 238
[14] Section 266
[15] Section 276(1)(c)(ii)
[16] Section 227(1)
[17] Section 238
[18] Section 266
[19] Section 276(1)(c)(ii)
[20] Section 227(1)

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