Glades Easthill North [2007] QBCCMCmr 268 (11 May 2007)

Office of the Commissioner for Body Corporate and
Community Management

SPECIALIST ADJUDICATION
(Service Contractor Dispute)

Number: 0384A-2007

Applicant: AMBRO (AUST) PTY LTD

Respondent: BODY CORPORATE FOR GLADES EASTHILL NORTH

ORDER that the "Body corporate for Glades Easthill North community titles scheme 32506" be restrained from putting motion No 11, as notified on its notice of annual general meeting for 17 May 2007, to a vote at such meeting, or at any adjournment thereof until the first of the following occurs –

(a) a final determination of this application is made; or

(b) this order otherwise ceases to have legal effect.

Office of the Commissioner for Body Corporate and
Community Management

SPECIALIST ADJUDICATION
(Service Contractor Dispute)

Applicant: AMBRO (AUST) PTY LTD

Respondent: BODY CORPORATE FOR GLADES EASTHILL NORTH

This is a dispute between a body corporate and a caretaking service contractor. On 16 August 2004 the body corporate entered into a caretaking agreement with THL Robina Pty Ltd ("Caretaking Agreement") and a separate letting agreement ("Letting Agreement"). With the consent of the body corporate on 28 February 2005 both agreements were assigned to Ambro (Aust) Pty Ltd, the current caretaker and letting agent and the applicant in this matter.

On or about 15 December 2006 the body corporate served the following notices on the applicant:

The first 2 notices set out a very substantial number of alleged breaches of the Caretaking Agreement, most of which are in very general terms. If these alleged breaches are established by the body corporate, then this would effectively mean that the applicant has totally failed to perform under the Caretaking Agreement.

The applicant disputed the validity of all the notices and, on a without prejudice basis, sought further and better particulars from the body corporate. The body corporate refused to provide those particulars. Then, on or about 13 February 2007, the body corporate served a further notice on the applicant under clause 7.1(b) of the Caretaking Agreement alleging further breaches of the Caretaking Agreement in similar terms to the earlier allegations. The body corporate then alleged that the applicant failed to remedy the breaches complained of and advised of its intention to propose a motion to its owners to terminate the 2 agreements.

Meanwhile it appears that the applicant has negotiated or contracted to assign the 2 agreements to a purchaser, Investor Property Management Pty Ltd, and is seeking the consent of the body corporate committee to that assignment.

The annual general meeting of the body corporate has been convened for 17 May 2007 and motion 11 on the voting paper for the meeting proposes that the agreements be terminated unless they are assigned beforehand.

The applicant has made this application seeking orders that effectively –

In its application the applicant also seeks an interim order restraining the body corporate from putting motion 11 to a vote at the annual general meeting, which is due to be held in less than a week’s time and clearly before the substantive aspects of this application can be determined.

If I do not make the interim order and motion 11 is put to the vote and passed by the general meeting, then the body corporate may move to terminate the 2 agreements. This may totally defeat the application and, at worst, leave the applicant only with a claim for damages. It may also result in a loss for the applicant of the sale of the "management rights" constituted at least partly by the 2 agreements. On the other hand, if I do make the interim order, the body corporate will not be able to act against the manager until such time as the application has been finally determined. If the complaints in the various default notices are well founded, then this will impose substantial hardship on the body corporate because it will have to cope with a caretaker who is virtually totally non-performing. It may also –

Section 279(1) of the Body Corporate and Community Management Act 1997 empowers me to make an interim order if I am satisfied, on reasonable grounds, that such an order "is necessary because of the nature or urgency of the circumstances to which the application relates". On the information before me it is difficult to assess the merits of the applicant’s case. However, the very general nature of the defaults complained of by the body corporate and its refusal to supply further and better particulars so the applicant could determine what action was necessary to satisfy the notices suggests to me that the applicant’s case may well have some merit.

I am also mindful that management rights are normally valuable assets and it is not unreasonable that the applicant be allowed, without undue pressure, the opportunity of assigning them to recover some or all of their value.

On balance, I am therefore satisfied that the circumstances of this case are such that there is not only urgency, but also a compelling reason why the status quo should be preserved pending determination of this application, or completion of an assignment, and that such circumstances outweigh the consequences to the body corporate of the making of an interim order.

I therefore propose to make an interim order along the lines requested by the applicant.

G F Bugden OAM
Specialist Adjudicator

(a)	restrain the body corporate from putting motion 11 to a vote at the annual general meeting; and
(b)	declaring that the various notices I have referred to "be declared void and of no effect".

(a)	deprive the body corporate of a commercial advantage against the applicant; namely the pressure to finalize the assignment before the meeting; and
(b)	require it, at some expense, to convene a further general meeting to reinitiate the process for termination of the agreements.

Queensland Body Corporate and Community Management Commissioner - Adjudicators Orders

Glades Easthill North [2007] QBCCMCmr 268 (11 May 2007)