Handford Close [2008] QBCCMCmr 112 (3 April 2008)

Last Updated: 30 April 2008

REFERENCE: 0280-2008

ORDER OF AN ADJUDICATOR

MADE UNDER PART 9 OF CHAPTER 6

BODY CORPORATE AND COMMUNITY MANAGEMENT ACT 1997

Number of Scheme:	19378
Name of Scheme:	Handford Close
Address of Scheme:	380 Handford Road TAIGUM QLD 4018

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

The body corporate for Handford Close.

I hereby order that within seven (7) days of that date of this order, Gary Taylor and Body Corporates Australia Pty. Ltd. shall, at their own cost, deliver to Ms. Sharon Clark of 33/380 Handford Road Taigum, the Secretary of the Body Corporate for Handford Close, all paper and electronic records and any other property or assets of the Body Corporate for Handford Close that are in the possession of Gary Taylor and/or Body Corporates Australia Pty Ltd, in accordance with sections 152 and 153 of the Body Corporate and Community Management (Standard Module) Regulation 1997. I further order that within seven (7) days of that date of this order, Gary Taylor and Body Corporates Australia Pty Ltd shall transfer all funds belonging to the Body Corporate for Handford Close from accounts operated by Body Corporates Australia Pty. Ltd. or Gary Taylor to the bank account number 20641165 for the Handford Close Body corporate at the Bank of Queensland

STATEMENT OF ADJUDICATOR’S REASONS FOR DECISION - REF 0280-2008

“Handford Close” CTS 19378

Handford Close community titles scheme (Handford Close) consists of 38 lots and common property. The community management statement (CMS) for Handford Close indicates that the Body Corporate and Community Management (Standard Module) Regulation 1997 (Standard Module) applies to the scheme. Department of Natural Resources and Water records show the scheme is registered on a Group Title Plan, now known as a Standard Format Plan.

APPLICATION

Pursuant to the Body Corporate and Community Management Act 1997 (Act), this application was made by the Body Corporate for Handford Close (applicant) on 31 March 2008. The lodging of an application in regard to the dispute was authorised at a committee meeting on 18 March 2008.

The applicant seeks orders against the former body corporate manager for the scheme, Gary Taylor of Body Corporates Australia Pty Ltd (respondent) in the following terms:

1. The official dismissal of Body Corporates Australia Pty. Ltd. from the position of Manager for the Body Corporate for Handford Close;
2. the return of all documents and property relating to the Body Corporate for Handford Close to the Body corporate committee;
3. the transfer of all funds belonging to the Body Corporate for Handford Close from accounts operated by Body Corporates Australia Pty. Ltd. to the bank account number 20641165 for the Handford Close Body corporate at the Bank of Queensland.
4. the calling of an Annual General Meeting for the Body Corporate for Handford Close.
5. The immediate return of all records relating to Handford Close Body Corporate including:

(a) Statements of accounts, balance sheets and budgets;

(b) details of payments made;

(c ) Details of payments received including maintenance contributions from body corporate owners to sinking fund and administrative fund.

(d) details of insurance paid, insurance policy and any claims made;

(e) Minutes of meetings;

(f) Books, records and common seal;

(g) Correspondence sent and received.

BACKGROUND

The application relates to the return of body corporate records. The facts of the dispute, as outlined in the application and submission can be summarised as follows:

At an Annual General Meeting on 28 March 2007 the Body Corporate resolved to engage Body Corporates Australia Pty. Ltd. as Body Corporate Manager for a period of one year commencing on 1 April 2007 and ending on 31 March 2008.

The previous management company, Australasian Body Corporate Management (Qld) Pty. Ltd. subsequently handed over to Body Corporates Australia Pty. Ltd. all records and funds held on behalf of the body corporate for Handford Close. The principal of Body Corporates Australia Pty. Ltd. (BCA), Mr. Gary Taylor, agreed to :

(a) prepare annual statements of account, balance sheets and budgets;
(b) prepare and issue notices of meetings and maintenance contributions;
(c) pay approved accounts and outgoings;
(d) receipt, bank and account for maintenance contributions.

However, it would appear that very little of this work, if any, has been done. The body corporate has been unable to hold the 2008 AGM (which was due to be held by the end of March 2008) due to the failings of the body corporate manager.

On 28 February the committee Treasurer emailed BCA advising that the AGM was to be held on 24 March 2008 . It has subsequently came to light that BCA has failed to:

(a) prepare annual statements of account, balance sheets and budgets;
(b) issue notices of the requested AGM
(c) issue notice of maintenance contributions due on 21 March 2008;
(d) prepare and distribute minutes of meetings.

Despite numerous communications by phone, email and in person, Mr Taylor has failed to produce accounts, books and records for the scheme and has put forward a range of excuses including illness, incompetent staff and computer problems.

On 11 March 2008 Mr. Taylor emailed the body corporate, advising that he would resign and return all books and records to the body corporate that week, but to date none of books, records or other body corporate property have been returned.

JURISDICTION

I am satisfied that this is a matter which falls within the legislative dispute resolution provisions.[1]

Section 276(1) of the Act provides that an adjudicator may make an order that is just and equitable in the circumstances (including a declaratory order) to resolve a dispute, in the context of a community titles scheme, about:

(a) a claimed or anticipated contravention of the Act or the CMS; or

(b) the exercise of rights or powers, or the performance of duties, under the Act or the CMS; or

(c) a claimed or anticipated contractual matter about -

(i) the engagement of a person as a body corporate manager or service contractor for a community titles scheme; or

(ii) the authorisation of a person as a letting agent for a community titles scheme.

An order may require a person to act, or prohibit a person from acting, in a way stated in the order (section 276(2)). An adjudicator's order may contain ancillary and consequential provisions the adjudicator considers necessary or appropriate (section 284(1)).

DETERMINATION

The applicant body corporate is now seeking the following orders:

1. The official dismissal of Body Corporates Australia Pty. Ltd. from the position of Manager for the Body Corporate for Handford Close;
2. the return of all documents and property relating to the Body Corporate for Handford Close to the Body corporate committee;
3. the transfer of all funds belonging to the Body Corporate for Handford Close from accounts operated by Body Corporates Australia Pty. Ltd. to the bank account number 20641165 for the Handford Close Body corporate at the Bank of Queensland.
   4. the calling of an Annual General Meeting for the Body Corporate for Handford Close.
   5. The immediate return of all records relating to Handford Close Body Corporate including:

(a) Statements of accounts, balance sheets and budgets;

(b) details of payments made;

(c ) Details of payments received including maintenance contributions from body corporate owners to sinking fund and administrative fund.

(d) details of insurance paid, insurance policy and any claims made;

(e) Minutes of meetings;

(f) Books, records and common seal;

(g) Correspondence sent and received.

Given that Body Corporates Australia Pty. Ltd. was appointed as Body Corporate Manager for a period of one year commencing on 1 April 2007 and ending on 31 March 2008, there is no need to now make an order that Body Corporates Australia Pty. Ltd. be dismissed from the position of Body Corporate Manager for Handford Close.

Similarly, given the expiration of the contract and the failure of Garry Taylor and Body Corporates Australia Pty. Ltd. to communicate with the body corporate and otherwise perform its obligations to the body corporate, I see no point in ordering that the respondent call an annual general meeting for the scheme.

However, I do believe that Garry Taylor and Body Corporates Australia Pty. Ltd. are obliged to
return the Body Corporate’s assets, books and records.

In regard to this dispute, section 152 of the Standard Module provides as follows:

152 Return of body corporate property – Act s 322

(1) This section applies if—

(a) a person has possession or control of any of the following property (the specified property)—

(i) a body corporate asset for a community titles scheme;

(ii) a record or other document of a body corporate;

(iii) a body corporate seal; and

(b) the person took possession or control of the specified property in the person’s capacity, or purportedly in the person’s capacity, as—

(i) a member, or an associate of a member, of the body corporate or of the committee; or

(ii) a body corporate manager or service contractor, or an associate of a body corporate manager or service contractor; and

(c) the person is served with a prescribed notice requiring the person to give, within 14 days after the person is served with the notice, the specified property to—

(i) a member of the committee who is named in the notice; or

(ii) if a body corporate manager is acting under a part 3, division 10 engagement—a member of the body corporate who is named in the notice.

(2) The person must comply with the notice.

Maximum penalty—20 penalty units.

(3) The person may not claim a lien on specified property mentioned in subsection (1)(a)(ii) or (iii).

(4) In this section—

prescribed notice means—

(a) a notice of a resolution of the committee; or

(b) if a body corporate manager is acting under a part 3, division 10 engagement—a notice signed by or for the owners of at least one-half of the lots included in the scheme.

Section 153 of the Standard Module further provides:

153 Documents in custody of body corporate manager – Act s 322

(1) This section applies if—

(a) a person (the person) engaged as a body corporate manager for a community titles scheme has custody of a document of the body corporate; and

(b) the person holds the document in photographic or electronic image form; and

(c) the person’s engagement as body corporate manager expires and is not renewed, or is otherwise brought to an end.

(2) The body corporate may require the person—

(a) to give to the body corporate the document in the form of a disc, tape or other article or any material from which writings or messages are capable of being produced or reproduced (with or without the aid of another article or device), if the form is immediately accessible by the body corporate; or

(b) to reproduce, and give to the body corporate, the document in paper form.

(3) The person must, at the person’s own expense, comply with a requirement of the body corporate under subsection (2).

Maximum penalty for subsection (3)—20 penalty units.

I am satisfied that the Committee has given more than adequate notice to the respondent to return the Body Corporate’s assets, books and records. The respondent has not disputed his responsibility to return the Body Corporate’s property and the failure of the respondent or his company to adequately communicate any difficulties or delays with the body corporate committee has compounded the difficulties faced by the body corporate. In the circumstances it is appropriate that I make an order requiring Gary Taylor and Body Corporate Australia Pty. Ltd. to return of all records and any other property that belongs to the Body Corporate which is held by Gary Taylor or Body Corporate Australia Pty Ltd within seven days.

I caution the respondent that if he does not comply with the order within the specified timeframe, then it can be enforced against him in the Magistrates Court.[2] Under section 288 of the Act a breach of an order is an offence attracting a fine of up to 400 penalty points (currently $30,000).

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[1] See sections 227, 228, 276 and Schedule 5 of the Act

[2] See sections 286 and 287 of the Act. See also the factsheet “Enforcement of adjudicators’ orders and penalties” available at www.bccm.qld.gov.au