Surfers Palms North [2007] QBCCMCmr 239 (27 April 2007)

Last Updated: 21 May 2007

Office of the Commissioner for Body Corporate and
Community Management

SPECIALIST ADJUDICATION
(Caretaking Contractual Matter)

Number: 0343A-2007

Applicants: PRINCI CABINETS PTY LTD Respondent: BODY CORPORATE FOR SURFERS PALMS NORTH COMMUNITY TITLES SCHEME 20846

INTERIM ORDER
27 April 2007

ORDER under section 279(1) of the Body Corporate and Community Management Act 1997 that the Respondent refrains from considering or passing motion No 16 (relating to the termination of the applicant’s "management rights") at its annual general meeting on Monday 30 April 1997 or at any adjournment of that meeting or any reconvened meeting until such time as this order expires or the application on which this order is made is finally determined whichever first occurs.

G F Bugden OAM
Specialist Adjudicator

Office of the Commissioner for Body Corporate and
Community Management

SPECIALIST ADJUDICATION
(Caretaking Contractual Matter)

Number: 0343A-2007

Applicants: PRINCI CABINETS PTY LTD



Respondents: BODY CORPORATE FOR SURFERS PALMS NORTH

COMMUNITY TITLES SCHEME 20846

INTERIM DETERMINATION
27 April 2007

1. This application has been referred to me for specialist adjudication under section 265 of the Body Corporate and Community Management Act 1997 ("Act") because it involves a dispute between a caretaking service contractor (the applicant) and a body corporate (the respondent).
2. The body corporate has served 2 notices on the applicant requiring rectification of alleged defaults under certain caretaking and letting agreements between the applicant and the body corporate. The applicant disputes the validity of those notices or, in the alternative, says they were complied with.
3. In reliance on those notices and alleged continuing default of the applicant, the annual general meeting of the body corporate, which is being held on next Monday (30 April 2007), proposes to consider a motion to terminate the agreements.
4. Certain material has been distributed to lot owners relevant to any vote they may decide to cast on that motion. The applicant says that material is false and misleading in material respects and may lead to the motion being considered without owners being properly informed.
5. There appears to be a turbulent history involving the applicant and the body corporate and it is clear from material on the Commissioner’s file that a number of applications have been made in respect of this particular Scheme. Indeed, an adjudicator when determining one of those applications appears to have seriously considered appointing an administrator to take control of the affairs of the body corporate. The current body corporate committee has also been strongly criticized by the adjudicator for past conduct.
6. The applicant seeks an interim order under section 279(1) of the Act to effectively refrain consideration of that motion by the annual general meeting.
7. Under that section I can make an interim order if I am satisfied, on reasonable grounds, that an interim order is necessary because of the nature or urgency of the circumstances to which the application relates.
8. In this case, if I do not make an interim order the motion may well be passed as a resolution and the body corporate may rely upon that resolution to serve a notice terminating the agreements. The decision to pass the motion may be unduly influenced by inaccurate or incomplete information being available to lot owners. Indeed, if the action I have foreshadowed did occur and it is subsequently held that the termination of the agreements was not legal, the body corporate may incur a very substantial liability as a consequence of its actions.
9. These possible outcomes are not in the interests of either the applicant or the owners, who as members of the body corporate are responsible for providing funds to discharge its liabilities. It therefore seems preferable to me to investigate the applicant’s claims before any termination occurs.
10. Apart from that, I am mindful that, if this motion is considered at Monday’s meeting, it will be considered in circumstances that are not conducive to an informed and rational decision. Such a significant decision requires lot owners to be fully informed in a balanced way and I am not satisfied that this will occur on Monday given the history of dispute in the scheme and the material that has recently been circulated to lot owners.
11. If I make an interim order and the substantive aspects of this application are not ultimately successful, then the impact on the body corporate will be to delay it from terminating a defaulting caretaking service contractor.
12. I am satisfied that in this case there is both urgent and necessary circumstances to justify the making of an interim order. In balancing the interests of the parties I am also satisfied that the interests of the applicant prevail.
13. I therefore propose to make an interim order restraining consideration of the motion at Monday’s meeting.

G F Bugden OAM
Specialist Adjudicator