Cairns Agincourt [2007] QBCCMCmr 410 (10 July 2007)

Last Updated: 17 July 2007

REFERENCE: 0141-2007

ORDER OF AN ADJUDICATOR

MADE UNDER PART 9 OF CHAPTER 6

BODY CORPORATE AND COMMUNITY MANAGEMENT ACT 1997

Number of Scheme:	1043
Name of Scheme:	Cairns Agincourt
Address of Scheme:	69 Arlington Esplanade CLIFTON BEACH QLD 4879

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

the body corporate

I hereby order that the application is dismissed under section 270(1)(b) of the Body Corporate and Community Management Act 1997.

STATEMENT OF ADJUDICATOR’S REASONS FOR DECISION - REF 0141-2007

"Cairns Agincourt" CTS 1043

Application

Cairns Agincourt Community Titles Scheme (Cairns Agincourt) is a 45 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.

This application is by the body corporate for Cairns Agincourt (applicant) seeking orders against Ron Gio Batta, occupier of lot 41 (respondent).

Background

The background to the present dispute is an argument about the lopping of a tree. The respondent says the lopping was either mistaken or illegal and he acted properly in seeking to stop the lopping. The body corporate says that the respondent contravened the Act and the by-laws in preventing the tree being lopped.

It is alleged that the body corporate was forced to incur additional costs as a result of the respondent's actions. The claimed costs are $440.00 for an extra visit by the tree loppers, $530.75 for legal advice related to obtaining assurances the respondent would not interfere with the lopping again, and $312.95 relating to the costs of additional committee meetings.

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).

An adjudicator must investigate the application to decide whether it would be appropriate to make an order on the application (Act, 269).

Preliminary question

A preliminary question arises as to whether the body corporate's claim is appropriate for this jurisdiction.

The body corporate's claim is phrased as reimbursement of expenses. However, the body corporate is not in fact seeking reimbursement from the respondent of money the body corporate mistakenly paid to the respondent or paid on the respondent's behalf. The body corporate is seeking to recover from the respondent some compensation for some additional expenses the body corporate has incurred allegedly as a result of the respondent's actions. This is properly categorised as a claim of the nature of damages to compensate the body corporate for its alleged loss.

The question arises as to whether the body corporate's claim for damages should be determined before a court of competent jurisdiction rather than within the present limited statutory jurisdiction. For it to be appropriate for an adjudicator to determine the claim it is necessary to satisfy some preliminary requirements. Firstly, it is necessary to determine whether the dispute is properly characterised as a dispute between the body corporate and an occupier of a lot within the scheme. Secondly, it is necessary to determine whether the dispute falls within the jurisdiction established under Chapter 6 of the Act. Thirdly, it is necessary to determine whether an adjudicator is able to grant the orders sought.

Dispute between the body corporate and an occupier

A "dispute" for the purposes of the Act is defined as being a dispute between specified persons relevant to a community titles scheme. This includes a dispute between the body corporate and an owner or occupier of a lot in the scheme (Act, 227). The Act establishes procedures for resolution of disputes including lodgement of applications with the commissioner, referral of applications to conciliators, mediators or adjudicators, and rejection of applications (Act, Chapter 6).

If the body corporate incurred extra costs because a person stood under a tree to prevent it being lopped then the body corporate could potentially take action against that person in court under the tort of nuisance. However, the body corporate has elected to take action against the respondent in the present jurisdiction based on an alleged contravention of the by-laws and based on section 167 of the Act which specifically prohibits the occupier of a lot in a community titles scheme using the lot or common property in a way that causes a nuisance or interferes unreasonably with the use or enjoyment of the scheme. I therefore conclude that the present dispute can be properly characterised as a dispute between the body corporate and an occupier of a lot in the scheme.

Jurisdiction

Section 229 of the Act provides as follows:
Exclusivity of dispute resolution provisions
(1) Subsection (2) applies to a dispute if it may be resolved under this

chapter by a dispute resolution process.

(2) The only remedy for the dispute is--

(a) the resolution of the dispute by a dispute resolution process; or
(b) an order of the District Court on appeal from an adjudicator on a
question of law.

(3) However, subsection (2) does not apply to a dispute if--

(a) an application is made to the commissioner; and
(b) the commissioner dismisses the application under part 5.

(4) Also, subsection (2) does not apply to a dispute about the adjustment
of a lot entitlement schedule.

The above provision was considered by the Supreme Court and then by the Court of Appeal in James v Body Corporate for Aarons Community Titles Scheme 11476.^[1] This involved an action by an owner against the body corporate seeking an order to require the body corporate to rectify water leaks in circumstances where the total cost of putting the building in repair, including but not limited to remedying the water penetration, was estimated by an independent expert to be $659,280. The Supreme Court^[2] said that "the combined functions of commissioner, mediator and arbitrator under chapter 6 constitute a specialised mechanism peculiarly suited to speedy, cheap and relatively informal resolution of community titles scheme disputes", that exclusivity is intended by section 229,^[3] and that the jurisdiction of the Supreme Court is excluded in respect of any dispute that can equally be resolved by an adjudicator's order. The Court of Appeal^[4] dismissed the appeal confirming that due to section 229 the plain intention is that an adjudicator is to have exclusive jurisdiction to make orders of the kind prescribed relevantly in section 276 and 281 in disputes under section 227.^[5]

The District Court has subsequently considered section 229 and determined that, while the section could be expressed in clearer terms, it seems the intention is to require remedy for "any" dispute between the body corporate and an owner to be sought under Chapter 6 of the Act if the dispute may be resolved by the dispute resolution process prescribed under the Act.^[6] This District Court decision related to a commercial scheme under which a claim was made for cost of repairs to a unit, loss of rental income, and loss of capital value of the unit allegedly caused by a failure of the body corporate to prevent water leakage into the unit. It was submitted that the adjudicator had no power to make orders to award damages for loss of rent or loss of capital value. However, the court found that unless or until the "dispute resolution process is completed pursuant to the relevant sections contained in Chapter 6 of the Act, ... the jurisdiction of a 'court or tribunal of competent jurisdiction' is not enlivened". Further, the court said it was not convinced that the dispute resolution process under Chapter 6 could not resolve all matters in issue between the parties given that "adjudicator's powers within the terms of s 276 are expressed in such broad terms". In any event, it was determined that an application under Chapter 6 was required even if ultimately the dispute was not resolved pursuant to that chapter.^[7]

The present dispute therefore appears to be properly within the jurisdiction of this office and has been referred to me for adjudication under section 248 of the Act.

No power to grant orders sought

The body corporate seeks an order that the respondent pay the body corporate $1,283.70. The question that arises is whether an adjudicator has power to make such an order for payment of money.

Section 281 of the Act gives an adjudicator the specific power to make an order requiring payment of or an amount fixed at not more than $10,000. However, this type of order is limited to a payment "as reimbursement for repairs carried out to property by the applicant" where the applicant "has suffered damage to property because of a contravention of this Act or the community management statement". Section 281 is therefore not applicable to the present application.

Section 276 of the Act gives an adjudicator the power to make an order that is "just and equitable in the circumstances (including a declaratory order) to resolve a dispute". Specifically, 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".

In Sail Isle v Body Corporate for Surfers Aquarius^[8] it was conceded that section 276(2) extends to an order to pay money. The District Court concluded that a claim by an owner against the body corporate for reimbursement of the costs of repairing a roof was covered by section 276(2).^[9]

The substantive right being claimed in the present case is also based in statute, being for a contravention of the by-laws and of section 167 of the Act. However, the nature of the present claim is legally quite different from a claim for reimbursement of maintenance costs as in the above case, especially if the claim is compared with traditional common law claims in contract, tort or restitution.

An order for reimbursement of money spent to rectify a failure of the body corporate to maintain a roof is "of the nature of a claim in restitution" based upon an owner recovering funds spent by the owner in performing work the body corporate was required to do. Similarly, a claim by the body corporate seeking recovery of body corporate funds that have been given to another person mistakenly or without authority is "of the nature of a claim in restitution".

On the other hand, the present claim is to compensate the body corporate for additional expenses incurred as a result of alleged actions of the respondent that constituted a nuisance or were contrary to the by-laws. Such a claim is "of the nature of a claim in tort to remedy a civil wrong".

In James, the Court of Appeal discussed the powers of an adjudicator to make orders under section 279 relating to "matters which might be expected to arise in the administration of the affairs of the body corporate" and orders under section 281 being "orders to remedy a civil wrong" where the wrong arises out of a contravention of the Act or the community management statement. The Court stated that:

Orders of the kind which the adjudicator is given power to make by [s276(3)] are all orders with respect to matters which might be expected to arise in the administration of the affairs of the body corporate including the obligation of the body corporate to maintain the common property in good condition. Orders which the adjudicator is given power to make under [s281] are orders of a quite different kind. They are orders to remedy a civil wrong causing damage to property where that wrong arises out of a contravention of the Act or the community management statement. In this respect they trespass into the field ordinarily occupied by the common law.^[10]

The Court appeared to prefer the view that section 276 does not give any general power to award damages of the nature of tortious damages and that an adjudicator has a limited power under section 281 to award damages of the nature of a claim in tort to remedy a civil wrong. This power under section 281 is for damages of up to $10,000 limited to the actual costs of repairs carried out to property where the applicant has suffered the damage to property because of a contravention of the Act or the community management statement. The present claim is not for the costs of repairs to property and I therefore have no power to grant the order sought.

Order

For the fairly technical reasons above, I have no power to grant the body corporate orders of the nature of damages for alleged interference with the tree lopping. If an application had been made at the appropriate time then it would have been within an adjudicator's power to grant any necessary orders to prevent subsequent interference with any authorised lopping. However, the body corporate elected to obtain its own legal advice and seek assurances from the respondent about future lopping rather than make any application to an adjudicator at that time.

The present application goes one step beyond seeking an order to prevent or directly rectify a contravention of the Act or by-laws and instead seeks damages to compensate the body corporate for an alleged contravention of the Act and by-laws. Even if the body corporate was successful in establishing the respondent contravened the Act or by-laws I would have no power to grant the order sought.

I have therefore not considered the merits of the application and have dismissed the application on the basis that an adjudicator has no power to grant the orders sought and the dispute should be dealt with in a court or tribunal of competent jurisdiction (Act, 270(1)(b)).

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^[1] James v Body Corporate Aarons Community Titles Scheme 11476 [2002] QSC 386 and James v Body Corporate Aarons Community Titles Scheme 11476 [2003] QCA 329.

^[2] James, [2002] QSC supra, at paragraphs 17-19.

^[3] Section 184 prior to a renumbering of the legislation in 2003.
^[4] James, [2003] QCA supra, at paragraph 12.
^[5] Sections 227, 229, 279 and 281 being renumbered from 182, 184, 223 and 227.
^[6] Penberg Pty Ltd v Body Corporate for Market Town Community Titles Scheme 2052, [2006] QDC at paragraph 18.
^[7] Penberg v Market Town, supra, at paragraph 24(d).
^[8] [2006] QDC 109.
^[9] Sail Isle v Surfers Aquarius, supra, at paragraph 12.
^[10] James, [2003] QCA, supra, at paragraph 20.