White Caps [2008] QBCCMCmr 321 (11 September 2008)

Last Updated: 13 October 2008

REFERENCE: 0377-2008

ORDER OF AN ADJUDICATOR

MADE UNDER PART 9 OF CHAPTER 6

BODY CORPORATE AND COMMUNITY MANAGEMENT ACT 1997

Number of Scheme:	11872
Name of Scheme:	White Caps
Address of Scheme:	28 Miles Street COOLANGATTA QLD 4225

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

Sharon Wallace, the owner of lot 5, against the body corporate

I hereby order that the body corporate must, within seven days of the date of this order, provide the owner of lot 5, Sharon Wallace, with a new Contribution Statement that credits her with the amount of $974.39.

STATEMENT OF ADJUDICATOR’S REASONS FOR DECISION - REF 0377-2008

“White Caps” CTS 11872

Application

This application is by Sharon Wallace, owner of lot 5 (applicant) seeking orders against the body corporate for White Caps (respondent). The applicant is seeking an order that the body corporate issue a new contribution statement that credits her with $974.39 that was unlawfully charged to her on 20 November 2006. These charges comprised $852.50 in recovery costs and $121.89 in overdue interest.

The grounds to the application are to the following effect:

• On 20 January 2006, the applicant wrote a hand written letter to Strata & Community Management Services Pty Ltd (SCMS), who were holding themselves out as body corporate managers for the scheme at that time, requesting that they send levy notices to the applicant’s managing agent, DJ Stringers. A copy of that letter was provided with the application.
• In February 2006, the applicant sent a form to SCMS notifying them that DJ Stringers were her new managing agent and that all correspondence should be sent to them.
• DJ Stringers never received any levy notices.
• SCMS refused to speak with the applicant or DJ Stringers when they called. SCMS stated that any communication had to be by typed letter and addressed “properly”.
• The applicant again wrote to SCMS on 9 January 2007 (copy of letter enclosed) explaining the situation from her point of view and requesting that solicitor’s recovery charges of $852.50 and interest charges of $121.89 be used to credit her next standard levies. She never received a reply.
• A statement issued by SCMS for the period 1 May 2005 to 5 December 2006 shows charges for over due interest of $40.63 for each of the months August, September and October 2006 and two separate charges for “recovery costs” on 16 November 2006 in the amounts of $550 and $302.50.
• On 17 November 2006, the day after the applicant received her forwarded mail in the Himalayas (her mail takes more than one month to receive) she made payment in the amount of $1,706.26 to the body corporate and sent a fax to SCMS again advising of the address for service of notices and asking “What is still owing?”
• On 7 December 2006, the applicant was sent a letter from HQF Lawyers, stating that an amount of $894.15 in outstanding levies was still owing, and that the applicant’s total indebtedness to the body corporate of $2,599.39 included recovery costs.
• All communication with SCMS is fruitless.
• The applicant is willing to pay her fair body corporate levies and wants all good things for the benefit of Whitecaps.
  

Jurisdiction

White Caps Community Titles Scheme (White Caps) was registered as a building units (now known as building format) plan of subdivision on 13 December 1979 comprising 16 lots and common property. It is regulated by the Body Corporate and Community Management Act 1997 (the Act) and the Body Corporate and Community Management (Standard Module) Regulation 2008. (the Standard Module). In considering the legislative requirements relating to the order sought, I have had regard to the provisions of the Standard Module as in force at the time that the events in question occurred, that is the Body Corporate and Community Management (Standard Module) Regulation 1997 (the Standard Module)[1]. However, I draw the parties’ attention to the fact that the Standard Module has since been changed.

This is a dispute between an owner and the body corporate concerning the exercise of powers, or performance of duties under the Act and comes within the dispute resolution provisisions of the Act (see sections 226, 227).

Procedural Matters

On 3 June 2008, a copy of the application was provided by this office to the owner/s of each lot at their address for service as recorded on the roll supplied by the administrator, with an invitation to respond to the matters raised in the application. No submissions were received.

A dispute resolution recommendation has been made under section 248 of the Act referring the dispute to departmental adjudication.

Determination

Applicable Law

The types of things that can be included in contribution notices are specifically set out in legislative provisions that include:

• At least 30 days before the payment of a contribution is required the body corporate must give the owner written notice of the contribution, the date for payment, any discount, any arrears and any penalty. This notice may also include amounts payable for a specially contracted service enjoyed by the owner or payable under an exclusive use by-law. The written notice may be served on a lot owner at the lot owner’s address for service, or in the way directed by the lot owner. (Standard Module, 96);
• If a contribution is not paid by the due date the body corporate may recover, as a debt, the contribution, any applicable penalty and any recovery costs reasonably incurred by the body corporate (Standard Module, 99(1));
• If a contribution has been outstanding for two years the body corporate must start proceedings to recover the amount (Standard Module, 99(2)); and
• A body corporate debt is a contribution, penalty, and other amounts related to ownership of a lot such as amounts agreed to be paid under an exclusive use by-law or for provision of services to the lot (Standard Module, definition "body corporate debt").
  

The legislation specifically provides that the body corporate can recover as a debt any reasonably incurred recovery costs (Standard Module, 99(1)(c)). However, there is no provision for including reasonably incurred recovery costs on the notice of contribution payable (Standard Module, 96).

Findings

After viewing copies of correspondence sent by the applicant to SCMS and in the absence of any submission from the body corporate, I am satisfied that she had directed the body corporate to address any notices of contribution payable to her managing agent, DJ Stringers. In my view, the failure of SCMS to act on any of the applicant’s correspondence in this regard is deplorable and inexcusable. The inaction of SCMS, in my view, is directly responsible for the body corporate not receiving the applicant’s contributions by the due date. I am further satisfied, based on the applicant’s recorded history of payment of body corporate levies, that had the Notices of Contribution been directed as requested by the applicant, all amounts would have been paid on time. In the circumstances, I consider it just and equitable to order that the body corporate issue the applicant a new Contribution Statement which removes the charges for recovery costs and overdue interest from her account.

Even if the applicant had been at fault and late paying her body corporate levies, the body corporate would still not be able to add the disputed recovery costs to her contribution account.

I am satisfied from viewing a copy of the Statement for the period 1 May 2005 to 5 December 2006 that it is more likely than not that a person acting on behalf of SCMS added disputed recovery costs to the applicant’s contribution statement.

As my colleage noted in a previous order for White Caps[2], The body corporate cannot simply pass a by-law that makes an owner liable for all recovery costs or decide itself what costs should be payable and add those costs to the contribution statement of an owner. The body corporate needs to claim any reasonable recovery costs as a debt and await either agreement by the defendant or a court order specifying which recovery costs are "reasonably incurred".

I note in particular that the definition of "body corporate debt" does not specifically include recovery costs, although it allows for amounts agreed pursuant to an exclusive use by-law or agreement for supply of services to the body corporate (refer Act 180(6), Standard Module 119). In particular, the word "debt" implies the amount must be an agreed or fixed amount rather than a "reasonable" amount that has not yet been fixed. I therefore prefer the view that the term "body corporate debt" does not include any claimed reasonable recovery costs and that an owner cannot be deprived of the right to vote or nominate for committee membership based on a claim that a person owes the body corporate reasonable recovery costs (Standard Module, 11(2), 47A).

In the circumstances, the applicant is entitled to an order that the body corporate provide her with a new contribution statement that credits any amounts already paid towards recovery costs included on past notices of contribution, other amounts that should not have been included on past notices of contribution, or interest on those amounts. Submissions from other owners indicate that those owners also received incorrect contribution notices. The body corporate may therefore wish to act promptly to correct those contribution notices also and I will give the body corporate an opportunity to rectify the situation itself pending a specific application by those owners.

The committee was specifically requested, by letter dated 14 August 2008, to make submission in response to this application. They were specifically asked whether they were prepared to issue the respondent with a new Contribution Statement that credits her with the amount of $974.39 which the respondent alleges was unlawfully charged to her on 20 November 2006. The committee’s submission was required to be submitted to the office as soon as possible, but no later than 5 September 2008. To date, no submission has been forthcoming from the committee. The current body corporate manager, Mr Mark Purtell of Strata Title Management, was contacted on 9 September 2008 and asked whether the committee intended to make a submission. He advised that the committee members were all given a copy of our letter of 14 August 2008 and if no response has been forthcoming, there was nothing further he could add.

In the circumstances, I have no hesitation in making an order that the body corporate provide the applicant with a new Contribution Statement that credits her with the amount of $974.39.

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[1] Section 20, Acts Interpretation Act 1954
[2] White Caps  [2008] QBCCMCmr 130 (17 April 2008)