Eleonora Court [2008] QBCCMCmr 24 (24 January 2008)

Last Updated: 22 February 2008

REFERENCE: 0885-2007

ORDER OF AN ADJUDICATOR

MADE UNDER PART 9 OF CHAPTER 6

BODY CORPORATE AND COMMUNITY MANAGEMENT ACT 1997

Number of Scheme:	10589
Name of Scheme:	Eleonora Court
Address of Scheme:	53 Annie Street NEW FARM QLD 4005

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

David Ryan, the owner of lot 1

I hereby order that the body corporate is to make its books and records available for inspection by the owner of lot 1 at 9am on Saturday 9 February 2008 at 539 Brunswick Street New Farm for a maximum period of 2 hours. I further order that: • The owner of lot 1 shall pay the body corporate the prescribed fee of $10.25 to conduct the inspection, prior to the inspection taking place. • The body corporate shall ensure that all body corporate records that the owner of lot 1 is entitled to inspect are present and available at the inspection, and that those records are presented at the inspection in an orderly manner. • The owner of lot 1 and Mr Samuel Tornatore are entitled to be present at the inspection. • The body corporate shall make all reasonable attempts to ensure that the inspection is not unreasonably disrupted or terminated by any member of the body corporate or the committee. • The owner of lot 1 shall conduct the inspection in a reasonable, calm and orderly manner. • At the inspection the owner of lot 1 is not entitled to engage Mr Samuel Tornatore in discussions or debate about the content of body corporate records but may direct any concerns or questions about the content of body corporate records to the secretary in writing. • At the inspection the owner of lot 1 is to supply his own means of copying any records he wishes to copy, including copier and paper. In exchange, the prescribed fee of 50 cents per page supplied will be waived. • The owner of lot 1 is to supply the body corporate with a list specifying each record he copies, prior to concluding the inspection.

STATEMENT OF ADJUDICATOR’S REASONS FOR DECISION - REF 0885-2007

"Eleonora Court" CTS 10589

Scheme

"Eleonora Court" was registered as a building unit (now known as building format) plan of subdivision on 5 January 1982, comprising eight lots and common property. The scheme is regulated by the Body Corporate and Community Management Act 1997 (The Act) and the Body Corporate and Community Management (Standard Module) Regulation 1997 (the Standard Module).

Application

This application is brought by the owner of lot 1, David Thomas Ryan, against the body corporate, seeking an order that he be permitted to view all body corporate records, including legal documents and to have copies of nominated records provided where available.

The applicant’s grounds are to the following effect:

• The applicant is attempting to gain access to the body corporate records a second time after a conciliation session in August 2007 where it was agreed that access be provided to him.

• He includes a letter dated 22 October 2007, requesting the second inspection for Sunday 28 October 2007 at 8:30am, one week after his first inspection. He also requests copies of minutes for general meetings held in November 2002 and April 2003, as well as 15 receipts for various items of expenditure covering a period from March 2002 til September 2007. He further requests that he be invoiced for the cost of the copies. He concludes by making various threats as to the consequences of the committee failing to comply with his request.

• In a reply dated 24 October 2007, Maureen Anderson, the secretary, states that, as the applicant was previously advised, none of the committee members would be available at the time nominated by the applicant. Ms Anderson concludes by suggesting that, if the applicant finds the reasons for the committee’s refusal to allow the inspection at the time nominated by the applicant unacceptable, that he should go ahead with his threat to contact this office.

• The applicant replied to Ms Anderson’s letter, by letter dated 26 October 2007, stating that the time he nominated was "a preferred time, which was able to be changed for one which was more suitable". He suggests that Mr Tornatore’s advice, obtained during a conversation between the two as to an alternative time to conduct the inspection, that all three committee members and potentially a forth unnamed party would have to be available to supervise the inspection, is unreasonable. He further questions why, despite the inability to arrange another inspection of the records, the copies of records he requested could not have been provided in any event.

Submissions

A submission in response to the application was sought from the committee. The executive committee made a submission strenuously denying that the applicant has been denied access to the body corporate records. The committee includes an account of their dealings with the applicant in gaining access to records. It details some five separate requests to inspect the records and/or obtain copies of nominated records over a four month period. On the first of those occasions, the applicant failed to present himself at the time agreed for the inspection.

The committee states that they do not have unlimited time to cater to the applicant’s demands and question the reasonableness of his actions in requesting numerous inspections and copies of records dating back as far as March 2002, when he only became an owner in the scheme in late 2006. The committee further explains that there will be delays in obtaining copies of receipts as some are yellow and faded with age and simply do not reproduce. Also, they do not own a photocopier and gaining access to one outside business hours is not always easy. They state that a lot of work is generated from an inspection of the records by the applicant. Not only is more work generated from an inspection, they say, but also allegations of improper conduct result. The committee states that the applicant alleges that meetings held on 18 November 2002, 22 April 2003 and 24 April 2003 are invalid. The committee notes that all of these meetings were held at a time when the applicant was not an owner.

The committee states that the applicant was given access to the records on October 21, 2007 After this, he requested to view the records again on Sunday October 28 at 8:30am. He was told that the committee would not be available at that time. On Tuesday, 23 October 2007, the committee received a completed BCCM Form 12 (Requiring Information from a Body Corporate) from the applicant, again requesting an inspection at 8:30am on Sunday October 28, 2007. The committee state that, according to the applicant, they have to make the records available to him when he requires it and no reasons for not doing so are valid. They believe the applicant is being unreasonable in his demands.

The committee denies that they have refused access to the records by the applicant, only that they refused to make them available at the time he nominated. They do state that they will not make available legal documents and further state that his requests for copies of certain documents (eg receipts for locksmiths dating back five years are frivolous). The committee questions whether the applicant is entitled to inspect the records AND obtain copies, or whether section 205(2) allows an inspection OR copies to be obtained.

The committee concludes by stating that the applicant is vexatious and that they are being subject to an abuse of process.

An uninvited submission from the owner of lot 2 was also received. I considered it to be largely irrelevant to the issue raised by this application and have disregarded it for the purposes of this determination.

The applicant exercised his right to inspect the committee submission and replied to the following effect:

• He rejects the committee’s claim that his requests are unreasonable and that he is vexatious; but states that even if that were true, they would still not be valid grounds to reject his requests;

• Explains his non-attendance at the first inspection scheduled for 24 July 2007 by being out of state for a day longer than expected.

• Claims that incomplete records were made available to him on 14 August 2007 and a conciliation application followed.

• After conciliation on 3 October 2007, he was able to view "a stack of records" on 21 October 2007. Access to these records raised a number of questions including decisions allegedly being made outside of committee meetings, unexplained expenditure being approved and lot owners being uninformed.

• There is a demonstrated history where the body corporate is reluctant to provide access to records and provide copies of records.

• Claims that owners have to request copies of quotations and flying minutes if they wish to obtain copies.

• States that he is not vexatious. His interest in obtaining copies of invoices for locksmiths relates to the body corporate’s request of his father to pay for locks.

Determination

Applicable Law

Within seven days after receiving a written request from an interested person accompanied by the prescribed fee, the body corporate must do either or both of the following as requested by the interested person (Section 205(2), Act):

a) Permit the person to inspect the body corporate’s records;

b) Give the person a copy of a record kept by the body corporate.

The prescribed fee for a lot owner to inspect the records is $10.25 and for obtaining copies of records, 50 cents for each page supplied (Section 151(1), Standard Module).

As pointed out to the applicant in this morning’s teleconference, the right to inspect body corporate records under section 205 is not unlimited. Further, if the applicant wishes to challenge body corporate decisions made in the past, he should be aware that an application to this office must be lodged within three months of the relevant meeting being held (Section 242, Act). An adjudicator may waive non-compliance with the time limit only for good reason.

Validity of the Request to Inspect

I note that neither request (letter dated 22 October 2007 and BCCM Form 12 dated 22 October 2007) from the applicant to inspect the records after 21 October 2007 appears to include the prescribed fee of $10.25, although his letter of 22 October 2007 requests that he be invoiced for the cost of the copies he requested and the BCCM Form 12 includes a request that the applicant be advised of the total fee payable for the copies requested. It appears to me that the applicants’ written requests to inspect the body corporate records, dated 22 October 2007 were, in terms of requesting copies of records, valid requests in terms of section 205 of the Act. Clearly, as an owner the applicant is within the scope of "interested persons". He has made a written request and undertakes to pay the prescribed fee upon notification of the relevant amount for the copies he requests. Indeed, the body corporate has not argued otherwise. The body corporate was obliged to advise the applicant of the cost involved in obtaining copies and upon receipt of that amount, to supply the copies to the applicant. It has failed to do so.

However, the omission of the prescribed fee of $10.25 to conduct a further inspection, in my view, may render the request to inspect records invalid. In the teleconference conducted this morning, the applicant stated that he was a committee member. While it is true that committee members are entitled to reasonable access to the body corporate’s records, without payment of a fee, the applicant’s BCCM Form 12 was made as the owner of lot 1. Further, it is arguable that a fifth request to inspect the body corporate’s records in a four month period is not reasonable. In the circumstances, I consider that the body corporate is only bound to supply the records for a further inspection by the applicant, upon receipt of payment of the prescribed fee of $10.25, the fee applicable for an owner to conduct an inspection.

Reasonableness of Actions of Applicant and Body Corporate

In carrying out its general functions, the body corporate must act reasonably.^[1] I do not consider that the body corporate has been reasonable in refusing the applicant’s preferred time to conduct a further inspection of the records, without suggesting any alternative time and in refusing to supply the copies he requested. Nor do I consider that the applicant has been reasonable in specifying only one time that was suitable to him to conduct the inspection. Section 205 of the Act allows a period of seven days within which the inspection is to be carried out, after the request to inspect is received. Section 205 contemplates that the parties involved will be able to agree on a mutually convenient time somewhere within that seven day period. The parties to this application have not been able to do this.

Records to be Made Available

It is important to note that when an inspection of books and records is made under section 205 of the Act, ALL of the books and records must be made available. Under section 205 of the Act, the only instance in which a body corporate is not required to allow access to its records pursuant to a valid request under section 205(2) is if the body corporate reasonably believes some part/s contain/s defamatory material. Even if the body corporate forms a reasonable belief that the material contained defamatory aspects, section 205(3) contemplates that the part considered defamatory is simply excised from the inspection. That a record contains parts that are reasonably believed by the body corporate to be defamatory is not grounds for denying access to the entire record, only those parts reasonably believed to be defamatory.

I note the body corporate’s refusal to provide some legal documents to the applicant, although this was not raised during this morning’s teleconference. It may be that the body corporate has a common law claim that certain documents are privileged from disclosure. There are a range of privileges and immunities that could potentially apply to information related to actual or threatened legal action. This includes legal professional privilege, which covers confidential communications between a lawyer and the client made for the purpose of seeking and providing professional legal advice, and material created for the primary purpose of pending or reasonably contemplated litigation.

If the body corporate wishes to exclude certain records from the inspection conducted by the applicant, either because it considers them to be defamatory or subject to privilege, I suggest it obtains legal advice to confirm it has grounds to do so. If no legal advice to this effect is obtained, then ALL body corporate records should be made available to the applicant.

Just and Equitable Order

In the circumstances, and pursuant to a teleconference conducted this morning between the applicant and Mr Samuel Tornatore, representing the body corporate, I intend to order the body corporate to make the books and records available for inspection by the applicant on Saturday 9 February 2008 at 9am at 539 Brunswick Street New Farm, for a maximum period of 2 hours. ALL body corporate books and records (other than those the body corporate has obtained legal advice to confirm that they are either defamatory or privileged from disclosure) must be made available at the inspection. Whether or not committee members are entitled to supervise or simply be present at the inspection is not addressed by the legislation, however, I consider that it is reasonable for this to occur as part of the body corporate fulfilling its obligation to administer the body corporate assets for the benefit of owners by ensuring the security of body corporate records. The parties agreed to conduct the inspection on Mr Tornatore’s premises and that the applicant and Mr Tornatore would be present at the inspection. To alleviate the body corporate’s concerns regarding obtaining copies of documents, the applicant has agreed to supply his own means of making copies at the inspection. In exchange, the prescribed fee of 50 cents per page for copies supplied has been waived.

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^[1] See s.94 Act