Sunnybank Heights [2007] QBCCMCmr 17 (11 January 2007)

Last Updated: 15 January 2007

REFERENCE: 0001-2007

INTERIM ORDER OF AN ADJUDICATOR

MADE UNDER PART 9 OF CHAPTER 6

BODY CORPORATE AND COMMUNITY MANAGEMENT ACT 1997

Number of Scheme:	22781
Name of Scheme:	Sunnybank Heights
Address of Scheme:	12 Grandchester Street, SUNNYBANK HEIGHTS Q 4109

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

Noel Edmonds, the Owner(s) of lot 51

I hereby order that the application for an interim order is declined.

STATEMENT OF ADJUDICATOR’S REASONS FOR DECISION - REF 0001-2007

"Sunnybank Heights" CTS 22781

Application

This is an application by Noel Edmonds, the owner of Lot 51 (the applicant) for the following interim orders (quote):

To put on hold the transfer of caretaking rights until the investigations into the conduct, behaviour, monetary discrepancies and also property management breaches are concluded and a decision made in regards to the termination of the caretaking agreement by obtaining independent legal advice

Jurisdiction

Sunnybank Heights is a subdivision of 81 lots on a Standard Format Pan (previously known as a Group Title Plan). The regulation module applying to the scheme is the Accommodation Regulation Module.

Section 276(1) of the Act provides that an adjudicator may make an order that is just and equitable in the circumstances (including a declaratory order) to resolve a dispute, in the context of a community titles scheme, about-

(a) a claimed or anticipated contravention of the Act or the community management statement; or

(b) the exercise of rights or powers, or the performance of duties, under the Act or the community management statement; or

(c) a claimed or anticipated contractual matter about-

(i) the engagement of a person as a body corporate manager or service contractor for a community titles scheme; or

(ii) the authorisation of a person as a letting agent for a community titles scheme.

An order may require a person to act, or prohibit a person from acting, in a way stated in the order (section 276(2)). An adjudicator's order may contain ancillary and consequential provisions the adjudicator considers necessary or appropriate (section 284(1)).

Interim order

Section 279(1) provides that an adjudicator may make an interim order if satisfied, on reasonable grounds, that an interim order is necessary because of the nature or urgency of the circumstances to which the application relates.

In any consideration of an application which seeks the making of an interim order, it is necessary to determine at the outset whether, because of the nature or urgency of the circumstances relating to the application, an interim order is in fact necessary or appropriate. The examples included in the Act under section 279(1) are suggestive of the usual circumstances where an interim order might be made. Both examples are in the nature of injunctive relief. While the range of matters which might be the subject of an interim order is not capable of definition, the applicant does need to establish that the circumstances of the application warrant the making of an interim order.

Grounds

The applicant states that there have been several complaints received by the Body Corporate in regard to the conduct and behaviour of the current resident unit managers. He states that there are also issues in relation to monetary discrepancies regarding gardening, maintenance and letting arrangements
He says that owners are currently requesting an investigation and if found to be solid, a new caretaking agreement would be drawn up. He states that the benefit in allowing the agreement to be terminated rather than transferred is in the form of new details in resident manager duties and a reduced cost to the contract. He has not provided a copy of the caretaking agreement he says is inadequate or the schedule of remuneration he says is excessive.

He does not provide any evidence of referring these matters to the committee for investigation or of an application being lodged for specialist adjudication of the caretaking contract.

Submissions

Submissions were sought from the committee. Three submissions were received. One supports the application on the basis of the application itself and also another document said to have been distributed by the applicant (not to my hand).

The other two submissions oppose the application. One is from a voting committee member and another is from the resident unit manager. One states that there are no investigations on foot by either the committee, the police the body corporate manager or an auditor. The other states that a notice to remedy breach has never been served on the resident manager.

The submissions make it clear that there is long running tension in the scheme and it is likely that there are some factions in existence surrounding old and new committee members. One of the submissions states that the resident manager has made an apology as the result of one complaint received, but that no complaint has been significant enough to warrant termination of the agreement.

One submission states that the Body Corporate has already engaged a solicitor in relation to the assignment of the management rights. They say that if any breach were ever established, the Body Corporate could still pursue its remedies against the old resident manager, even if the contract is assigned.

Determination

It is not appropriate for me to consider the substantive issues in this application in detail at this time. But to determine whether it is just and equitable to grant interim relief, it is relevant to briefly consider whether the application raises any serious questions for final determination. It is also relevant to consider whether any inconvenience likely to result from the interim order is outweighed by the potential detriment alleged in the application. Of particular relevance is evidence that an interim order is necessary to prevent serious or irreparable harm.

In this matter, the applicant has provided very little assistance to the adjudicator in terms of providing the basis or supporting evidence for the allegations made. In fact, there is a long way to go if the applicant seeks to terminate the contract, as the committee would need to resolve to lodge a notice to remedy breach and resolve whether or not to initiate a dispute in relation to termination (which would need to pass through the hands of a specialist adjudicator at the expense of whoever applies for the adjudication).

If the Body Corporate were to initiate such an application, it risks the costs of legal representatives, the specialist adjudicator and, if it should fail, it faces some risk of costs associated with the delay in settlement for the sale of management rights.

The applicant has not provided me with any evidence to support the proposition that the currently worded contract may be inadequate or overpriced. In other words, the applicant has not demonstrated to my satisfaction that the Body Corporate is likely to suffer a detriment if the assignment proceeds (rather than termination). However, the inconvenience that would be caused by ordering that settlement be delayed is readily apparent.

Therefore on balance, I regard the inconvenience that would result to the Body Corporate, the outgoing managers and the incoming managers (by ordering the postponement of assignment) as outweighing the benefit that might be gained by the Body Corporate (should it successfully achieve termination of the current contract and the establishment of new terms).

In the circumstances, I decline to make the interim order sought.