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Acacia Lodge Hostel [2007] QBCCMCmr 96 (22 February 2007)

Last Updated: 12 March 2009

BODY CORPORATE AND COMMUNITY MANAGEMENT ACT 1997


APPLICATION NO: 0115A-2007



APPLICANT: RITA COMMISSO ENTERPRISES PTY LTD

AND

RESPONDENT: BODY CORPORATE FOR ACACIA LODGE HOSTEL COMMUNITY TITLES SCHEME 25755

ORDER


Before: Specialist Adjudicator Mr C. Carrigan

Date of Order/Direction: 22 February 2007


Initiating Document: Application filed 6 February 2007


IT IS ORDERED/DIRECTED THAT:
  1. Pending the resolution of this Application, the Body Corporate is not to vote (save and except for a vote to adjourn this motion if necessary) on motion 4 at the Extraordinary General Meeting to be held at Sargeant Strata Pty Ltd, Suite 5, 115 Currumburra Road, Ashmore at 9:30 a.m. on Friday, 23 February 2007 or at any adjourned date for that Extraordinary General Meeting;
  2. In terms of s.280 of the Act, I reserve the question of the costs of the Adjudication;
  3. I direct that both parties have liberty to apply for further Directions in respect of the determination of the final Orders sought in paragraph 48(b) to (f) of the Application.

Christopher Carrigan
Specialist Adjudicator


This page is certified by me as a true copy of the Order made 22 February 2007 at Brisbane.


....................................
Mr C.J. Carrigan
Specialist Adjudicator


c.c. The Commissioner for Body Corporate and Community Management

BETWEEN:

Applicant: RITA COMMISSO ENTERPRISES PTY LTD

AND:

Respondent: BODY CORPORATE FOR ACACIA LODGE HOSTEL COMMUNITY TITLES SCHEME 25755


Dispute Resolution Application Ref No 0115A-2007


TABLE OF CONTENTS


BETWEEN:

Applicant: RITA COMMISSO ENTERPRISES PTY LTD

AND:

Respondent: BODY CORPORATE FOR ACACIA LODGE HOSTEL COMMUNITY TITLES SCHEME 25755


Dispute Resolution Application Ref No 0115A-2007


REASONS FOR DECISION

THE APPLICANT’S CLAIM FOR INTERIM RELIEF

  1. The Application by Rita Commisso Enterprises Pty Ltd (“the Applicant”) seeks an interim order in these terms[1]:-

“Pending the resolution of this Application, the Body Corporate is not to vote on motion 4 proposed for the EGM.”


  1. On 1 February 2007 the Body Corporate Manager, Sargeant Strata Pty Ltd, gave notice to the two (2) lot owners of an Extraordinary General Meeting (“EGM”) of the Body Corporate to be held on Friday, 23 February 2007 at 9:30 a.m. Among the business to be dealt with at the EGM is motion 4 which was submitted by Dominic Surace, owner of Lots 2, 3 and 6. He proposed that motion which is submitted as an ordinary resolution in these terms:-

“That the attached remedial action notices be given to Rita Commisso Enterprises Pty Ltd.”


JURISDICTION

  1. This Application is between the owner of a lot, the Applicant, and the Body Corporate.[2] The Application also affects the interests of Dominic Surace, who is a lot owner, and is the person who has proposed motion 4.[3] It also involves the Body Corporate and the Applicant in its capacity as the Caretaking Service Contractor and Letting Agent for the Scheme.[4] The Application, by the facts raised in Annexure “A”, is sufficient to raise a dispute within the meaning of Chapter 6 of the Body Corporate and Community Management Act (“the Act”).
  2. Further, the Application relates to matters arising under the engagement of the Applicant as Service Contractor and as a Letting Agent by reason of the matters set out in Annexure “A” to the Application. The dispute is one which comes within the purpose of Chapter 6 of the Act.[5]
  3. Accordingly, the only remedy for the Applicant is by Specialist Adjudication in the dispute resolution process under the Act, provided that a Specialist Adjudicator has powers to make orders resolving the dispute.[6]
  4. A Specialist Adjudicator is empowered to make interim orders if they are necessary because of the nature or urgency of the circumstances to which the Application relates.[7] Specifically, an Adjudicator on an interim basis can make orders in respect of motion 4 under the general power in s.276(1), or the specific power to prohibit a person from acting in the way stated in s.276(2) or to make orders with respect to the General Meeting in terms of or similar to those set out in Schedule 5 to the Act. Accordingly, I am satisfied that a Specialist Adjudicator has the power to make orders with respect to the interim Application made by the Applicant.
  5. In the circumstances I conclude that there is jurisdiction to deal with this dispute.

THE PARTIES

  1. The Applicant advises that it continues to seek the interim order set out in its Application and that it relies on the material set out in the Application, Annexure “A” to that Application and the accompanying Exhibits.[8] The Applicant does not propose to make any further submissions.[9]
  2. The Body Corporate has a different position. Its Committee is presently “dead locked” and has not passed any resolutions to:-

A copy of the Application and Annexure “A” to the Application has been served on the Body Corporate Manager. That service may not have included Exhibits “A” to “T” to the Application, but the Body Corporate Manager has been advised that they exist and are available from the Applicant’s Solicitors. The Body Corporate Manager has provided these above details. [10]

  1. It is clear that the Body Corporate is not taking any part in the hearing of the interim Application but rather is leaving the proceedings to the two owners of all of the lots in the Scheme to participate in the Specialist Adjudication to the extent that they are advised.
  2. Dominic Surace is the owner of three (3) out of the six (6) lots in the Body Corporate Scheme. The other three (3) lots are owned by the Applicant. Dominic Surace has legal advisors and they have made written submissions on his behalf with respect to the interim Application.[11] By those submissions Dominic Surace opposes the granting of the interim orders on several grounds including:-

THE FACTS

  1. The Body Corporate for Acacia Lodge Hostel consists of six (6) lots in the Accommodation Regulation. Three (3) of those lots are owned by the Applicant, and the remaining three (3) lots are owned by Dominic Surace. Both of those lot owners form the Committee of the Body Corporate.
  2. The six (6) lots now operate as rental units for persons on old age or invalid pensions and who require catering and assistance with serving of meals and related cleaning services. The Applicant advertises the units to “over 50’s”.[12] The units which are part of the six (6) lots do not contain kitchen or laundry facilities.[13]
  3. On 21 August 1998 the Body Corporate entered into a Resident Manager’s Agreement and a Letting Agreement with the then Manager and Letting Agent. Both of those Agreements contained a “Occupation Authority” in these terms[14]:-

The Manager/Agent has the right to the exclusive occupation of the area of common property shown hatched on the attached plan for the purpose necessary to enable the Manager/Agent to perform the Manager’s/Agent’s obligations under this Agreement and to operate as a Managing Agent/Letting Agent in accordance with the Resident Manager’s Agreement/Letting Agreement.

  1. It is said that the Resident Manager’s Agreement does not have an attached plan. The Letting Agreement, according to the Applicant, has an attached plan which shows that the hatched area is in respect of the kitchen and hallway, office, laundry and storeroom, linen storeroom and a car bay. The Submissions for Dominic Surace deny that either of these Agreements gives the Applicant exclusive use.[15]
  2. On or about 23 September 2002 the rights and obligations under the Resident Manager’s Agreement and the Letting Agreement were assigned to the Applicant. Since that time, the Applicant has used the exclusive occupation areas for preparation and provision of meals to residents of the Scheme as well as for cleaning and other assisting activities.
  3. On or about 30 August 2006 Dominic Surace, by his Solicitors, gave notice to the Applicant’s then Solicitors, that he was terminating the services of Ms Commisso as his Letting Agent and has appointed Raine & Horne as his Letting Agent. Presumably until this time Ms Commisso had been supplying meals, undertaking laundry and cleaning activities for occupiers of Dominic Surace’s lots. That notice also said that[16]:-

“Raine & Horne will require the tenants to have usage of the kitchen and the laundry. Further, Raine & Horne will also require usage of the office. ...


We again call on your client to cease and desist from interfering with the use and enjoyment of our client’s lot owners. ...”


  1. On or about 16 December 2005 Solicitors for the Applicant advised Dominic Surace’s Solicitors that their client had been granted exclusive occupation of the kitchen and laundry areas which appear to be accepted as being part of the common property of the Body Corporate.[17] Since at least that time the parties have remained in dispute about the use or occupation of the kitchen, laundry and office areas of the common property.
  2. On 28 November 2006 Dominic Surace, by his Solicitors gave notice to the Body Corporate Manager, Sargeant Strata Pty Ltd, that an Extraordinary General Meeting (“EGM”) of the Body Corporate was to be called to consider motions relating to a reduction in strata levies and that attached remedial action notice be given to Rita Commisso Enterprises Pty Ltd.
  3. As a consequence on 1 February 2007 the Body Corporate Manager, Sargeant Strata Pty Ltd, gave notice to the two lot owners of the convening of an EGM to be held on Friday, 23 February 2007 at 9:30 a.m. to consider the motions for the reduction in Body Corporate levies and motion 4 which is in the following terms:-

“That the attached remedial action notices be given to Rita Commisso Enterprises Pty Ltd.”


  1. The attached Remedial Action Notices are intended to be given to Rita Commisso Enterprises Pty Ltd in its capacity as Resident Manager and Letting Agent pursuant to the respective Agreements with the Body Corporate. Those Remedial Action Notices are intended to be delivered pursuant to s.84C of the Body Corporate and Community Management (Accommodation Module) Regulation 1997. Each notice asserts that the Applicant has contravened the relevant codes of conduct by not allowing lot owners (viz. lots owned by Dominic Surace) access to the kitchen and laundry comprising part of the common property and that the Applicant has behaved in a way that unreasonably affects the lot owners’ lawful use and enjoyment of a lot or common property.
  2. The Applicant now seeks an order in effect restraining any voting on motion 4 at tomorrow’s EGM pending the resolution of this Application to resolve the current dispute. It may well be argued that the proposed interim order allows the Body Corporate to put motion 4 to the EGM but not to vote on the motion. That form of order presupposes a vote “for” or “against” but does not take into account a vote to “adjourn” the motion. I do not think this was intended by the Applicant. It may have been more convenient to restrain that motion from being put to the meeting in the first place, however, the effect of either order will be the same if the interim order sought by the Applicant is granted.

DETERMINATION OF THE INTERIM APPLICATION

  1. In determining interim Applications such as this it is generally accepted that the relevant test is whether:-

SERIOUS QUESTION TO BE TRIED

  1. As the Committee is presently “dead locked” and is unable to pass a resolution where the two owners are in dispute, it is therefore necessary to break that dead lock by conducting a General Meeting of lot owners to authorise and determine whether the Remedial Action Notices be served on the Applicant. This is so particularly if a poll is declared for the voting on any motion.
  2. Motion 4 seeks to authorise the serving of Remedial Action Notices on the Applicant as a means of either:-
  3. Both of these consequences raised by the service of the Remedial Action Notice have not addressed the underlying dispute between the parties as to whether clause 5 of the Resident Manager’s Agreement and clause 3 of the Letting Agreement, together with the attached plan, if any, sufficiently authorise the Applicant to exclude Dominic Surace or his occupiers of lots from the kitchen, laundry, office and other areas referred to in the attached plan. That is, until such time as that dispute is resolved, the Body Corporate will not be in a position to know whether the Applicant, in its capacity as Resident Manager or Letting Agent is in breach of the relevant code of conduct. That is, if the Applicant is ultimately shown to be correct as having exclusive occupation of those disputed areas, then the Body Corporate is not entitled, and never was, to either allege a contravention or to effect a termination of any of the relevant Agreements pursuant to s.84C of the Accommodation Module. If it is ultimately shown, as Dominic Surace asserts in submissions prepared by his Solicitors, that the Applicant does not have exclusive possession of part of the common property, then it may be appropriate to request the Applicant to remedy the alleged contravention. At this stage neither of the above two propositions can be established.
  4. In the circumstances, I am satisfied that there is a serious question to be tried.

BALANCE OF CONVENIENCE

  1. If the Body Corporate is not restrained from voting on motion 4 and passes a resolution[18] in accordance with the terms of that motion then there is prejudice to the Applicant. That prejudice would be constituted by:-

These additional matters are against the background that the Applicant and the only other lot owner, Dominic Surace, are in significant dispute about their entitlement to parts of the common property in the Scheme. It seems far more practical and sensible, to have the underlying dispute dealt with prior to embarking upon these additional matters which could cause prejudice to the Applicant.

  1. If the interim relief is granted to the Applicant, then I am not satisfied that there is any prejudice to the Body Corporate or to the person affected, Dominic Surace. I have taken into account the submissions made on this issue by his Solicitors. Any order would be interim and would only continue until such time as the determination of the Application. The issues raised in the Application should be capable of expeditious and early resolution. Any postponement of the right to vote on motion 4 is not one which is going to unduly delay the Body Corporate. However, the outcome of the determination of the underlying dispute, will be of assistance to the parties in determining whether or not it is appropriate for such a resolution as motion 4 to proceed before the Body Corporate.
  2. Dominic Surace submits that the Applicant has delayed in this matter. It is the case that this dispute has been in existence for some time. However, it is only recently that an EGM has been called and the Applicant’s interim order relates to Remedial Action Notices which were first given to the Body Corporate Manager on 28 November 2006. It is not known whether those Notices came to the Applicant’s attention at any time prior to the Notice of the EGM given on 1 February 2007. In the circumstances I do not regard delay, if any, by the Applicant as a disentitling factor to the interim relief sought.
  3. In these circumstances I consider that the balance of convenience favours the Applicant.

ORDERS

  1. As I am satisfied that there is a serious question to be tried and the balance of convenience favours the Applicant I propose to make interim orders sought by the Applicant.
  2. Consideration was given to formulating an order which allowed voting on motion 4 to proceed but any resolution passed be not implemented or carried into effect until the final determination of these proceedings. Given that the lot entitlements favour one owner as against the other and that there are only two owners to vote at the General Meeting there does not appear any utility in providing the circumstances for lot owners to express a democratic vote. Further, there does not appear to be any advantage in proceeding with motion 4 until such time as the underlying dispute between the two lot owners is resolved.
  3. I order that:-

Dated: 22 February 2007


_____________________________
Christopher John Carrigan
Specialist Adjudicator


[1] See paragraph 48(a) to Annexure “A” of the Application dated 6 February 2007.

[2] See Definition of Dispute in s.227(1)(b).

[3] See Definition of Dispute in s.227(1)(a).

[4] See Definition of Dispute in s.227(1)(d) and (f).

[5] See s.228.

[6] S.229.

[7] S.279.

[8] See email from Applicant’s Solicitors dated Thursday, 22 February 2007.

[9] See Applicant’s Solicitors’ email dated Wednesday, 21 February 2007.

[10] See email to Carolyn Sargeant sent Thursday, 22 February 2007.

[11] Submissions sent by email from Stacks Grey, Lawyers, on Thursday, 22 February 2007.

[12] See Submissions from Dominic Surace at para. 3(iv).

[13] See Submissions from Dominic Surace at para. 5(iii).

[14] See clause 5 of the Resident Manager’s Agreement and clause 3 of the Letting Agreement.

[15] See Submissions from Dominic Surace at para. 4.

[16] See Exhibit “D” to the Application.

[17] See Exhibit “F” to the Application.

[18] In all likelihood the motion would be passed if a poll was declared for voting on the motion.

[19] S.84C(3).

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