The Grange Buderim [2007] QBCCMCmr 309 (23 May 2007)

Last Updated: 29 June 2007

REFERENCE: 0173-2007

ORDER OF AN ADJUDICATOR

MADE UNDER PART 9 OF CHAPTER 6

BODY CORPORATE AND COMMUNITY MANAGEMENT ACT 1997

Number of Scheme:	31718
Name of Scheme:	The Grange Buderim
Address of Scheme:	21 - 23 King Street BUDERIM QLD 4556

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

the body corporate

I hereby order that the application for reimbursement of $2,235.01 plus interest is dismissed on the basis that the dispute should be dealt with in a court or tribunal of competent jurisdiction.

STATEMENT OF ADJUDICATOR’S REASONS FOR DECISION - REF 0173-2007

"The Grange Buderim" CTS 31718

Application

The Grange Buderim Community Titles Scheme (The Grange) is an 8 lot scheme under the Body Corporate and Community Management Act 1997 (Act) and the Act’s Standard Module Regulation (Standard Module). The scheme is designed for residential purposes. Lot boundaries are designated under a building format plan.

This application is by the body corporate for The Grange (applicant) seeking orders against Whittles Body Corporate Services, the former body corporate manager for the scheme (respondent). The body corporate is seeking reimbursement of $2,235.01 plus interest regarding an amount of body corporate funds allegedly paid by the respondent Manager to Murphy Builders (Murphy) without authority.

Submissions

The background to this dispute relates to water leaking into lot 3, apparently from the rear of lot 4. It appears that Murphy claimed that landscaping performed by the previous owners of lot 4 had resulted in water leaking into lot 3 and Murphy therefore altered this landscaping and invoiced the body corporate for this work.

The body corporate makes submissions to the effect that this work by Murphy did not stop the leak and the leak was only fixed after subsequent waterproofing work by All Building Waterproofing. It is submitted that the committee had resolved not to pay the amount claimed by Murphy and decided the issue of whether or not the work was necessary should be determined between Murphy and the previous owners of lot 4 who would otherwise be responsible for paying for the work.

Whittles makes submissions to the effect that the invoice from Murphy needed to be paid and that the committee resolved to pay the invoice and seek reimbursement from the previous owners of lot 4.

Decision

Jurisdiction

Orders of an adjudicator

An adjudicator to whom an application is referred has jurisdiction to make an order that is just and equitable to resolve a dispute about claimed contraventions of the Act, the exercise of rights or powers under the Act and certain claimed contractual matters with body corporate managers, service contractors and letting agents (Act, 276). The order may require a person to act in a way stated in the order (Act, 276(2)). Without limiting either of these subsections, an adjudicator may make an order of the type listed in Schedule 5 of the Act (Act, 276(3)). Further provisions about specific types of orders of an adjudicator relate to orders appointing an administrator, consent orders, interim orders, orders about damage to property, and orders about the changing of financial year of the body corporate (Act 276(4), 276(5), 279, 281, 283).

Having been referred this application, it is necessary for me to determine whether I have jurisdiction to determine the dispute. An adjudicator must investigate the application to decide whether it would be appropriate to make an order on the application (Act, 269). Relevant to this application, an adjudicator may make an order about a claimed contravention of the Act or the exercise of rights or powers under the Act (Act, 276(1)).

Dispute

At the time of lodgement, this dispute was by the body corporate against its body corporate manager seeking reimbursement of body corporate funds alleged to have been spent by the body corporate manager contrary to the instructions of the committee. Whittles has since resigned as body corporate manager for The Grange but the dispute is ongoing. The claim by the body corporate is not based on breach of contract or negligence. The claim is for reimbursement of body corporate funds due to the funds being paid without authorisation of the body corporate and therefore requires consideration of the financial management arrangements established under the Act (Act, 150). I am satisfied that I have jurisdiction to resolve this type of dispute.^[1]

Issues arising from dispute

Both parties appear to agree that the payment of body corporate funds needed to be authorised by a resolution of the body corporate. However, there is a dispute particularly about a committee resolution on 13 June 2006 and whether this resolution authorised the payment. Whittles makes submissions to the effect that the resolution of 13 June 2006 required the body corporate manager to pay Murphy and provided that the body corporate would seek reimbursement from the owners of unit 4. The submissions from the body corporate committee are to the effect that the resolution specifically refused payment to Murphy and suggested that Murphy should seek any payment directly from the owners of unit 4. The wording of the resolution was that "the body corporate does not accept the Letter of Demand from Murphy Builders and that the responsibility for the payment of the invoice for repairs to the exclusive use area of unit 4 be put back to the owners of that unit."

If the body corporate can establish that Whittles paid Murphy without authorisation then it may seem at first glance that the body corporate is entitled to an order that Whittles reimburse the body corporate that exact amount. However, an adjudicator is required to make an order that is just and equitable in the circumstances (Act, 276). There are a number of other issues that I would need to be satisfied of before I considered it to be just and equitable to make the order sought.

In particular, questions arise from the claim that the work performed by Murphy did not actually fix the leak and Murphy is therefore not entitled to payment. The submissions indicate that the leak was from an area below the storm water grate and any additional landscaping done by unit 4, was not fixed by the work performed by Murphy, and was only fixed after additional work performed by the waterproofing subcontractor All Building Waterproofing. The evidence would tend to suggest that Murphy is not entitled to payment for the work in question. If so, it would seem just and equitable that Murphy reimburses the body corporate and neither the body corporate nor Whittles should be out of pocket. Alternatively, to the extent that landscaping performed by the previous owners of lot 4 had caused the water leakage and the work performed by Murphy was necessary to rectify the problem then ultimately the previous owners of unit 4 should bear the appropriate proportion of the costs of Murphy’s work.

Reference to alternate jurisdiction

In the circumstances, I consider the application would be better dealt with in a jurisdiction where there can be proper consideration and determination of the issues about whether the work performed by Murphy was necessary and who should be responsible for any payment due to Murphy. For example, it may be possible for the body corporate to bring its claim against Whittles in the Small Claims Tribunal and also list Murphy, the previous owners of unit 4, and the current owners of unit 4 as respondents. If all interested persons are parties to the claim then this would allow for determination of the questions raised above.

Order

I have concluded that I should refrain from making any order to resolve the present dispute as between only the body corporate and Whittles and should dismiss the application on the basis it should be dealt with in a court or tribunal of competent jurisdiction.

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^[1] Refer to Sail Isle v Body Corporate for Surfers Aquarius, [2006] QDC 109, Robin QC DCJ, 19 May 2006.