Paradise Sands, Port Douglas [2008] QBCCMCmr 46 (8 February 2008)

Last Updated: 29 February 2008

REFERENCE: 0077-2008

INTERIM ORDER OF AN ADJUDICATOR

MADE UNDER PART 9 OF CHAPTER 6

BODY CORPORATE AND COMMUNITY MANAGEMENT ACT 1997

Number of Scheme:	17434
Name of Scheme:	Paradise Sands, Port Douglas
Address of Scheme:	Corner Mahogany and Port Douglas Road PORT DOUGLAS QLD 4877

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

Andrew & Tracey Johnson, the Owner(s) of lots 42 and 51

I hereby order that the application for interim orders is dismissed. The application for final orders remains outstanding. There will be an opportunity for persons likely to be affected by any final orders to provide submissions regarding the application for final orders in due course.

STATEMENT OF ADJUDICATOR’S REASONS FOR DECISION - REF 0077-2008

“Paradise Sands, Port Douglas” CTS 17434

Interim Application

Paradise Sands, Port Douglas Community Titles Scheme (Paradise Sands) is a 53 lot scheme under the Body Corporate and Community Management Act (Act) and the Act’s Accommodation Module Regulation (Accommodation Module).

This is an application for interim orders. It arises out of an application by Andrew and Tracey Johnson, owners of lots 42 and 51 (applicants) against the body corporate for Paradise Sands (respondent).

The applicants allege that the committee is acting contrary to the legislation in consenting to an increase in remuneration for the caretakers, including back payments of around $20,000.

Interim Orders Sought

The applicant seeks an interim order to stop any back payments or increase in remuneration pending a final order in relation to the application.

Decision

Urgent interim relief

An interim order will not be granted unless is it necessary due to the nature or urgency of the circumstances to which the application relates (Act, 279). Further, any orders granted must be just and equitable in the circumstances (Act, 276).

In determining whether it is just and equitable to grant interim relief it is relevant to briefly consider whether the application raises any serious questions for final determination.

It is also relevant to consider whether any inconvenience likely to result from the interim order is outweighed by the potential detriment alleged in the application. Any evidence that an interim order is necessary to prevent serious or irreparable harm will be significant.

Serious question to be determined

The applicants provide lengthy grounds disputing matters including the procedures undertaken for a salary review, the qualifications of the person who undertook the salary review, certain details of the review including whether the duty to keep an office open forms part of the caretaker or letting agent duties, and the circumstances of entry into the caretaker and letting agent agreements.

Submissions by the caretakers were to the effect that the caretaking and letting agent agreements were validly entered into in May 2005, the terms of caretaking agreement provided for a salary review after the initial two year period, the person who undertook the salary review was properly qualified, and the salary review was binding pursuant to the terms of the caretaking agreement.

Submissions by the body corporate manager were also to the effect that the caretaking agreement entered into in 2005 is a legally binding agreement that the body corporate is required to comply with, the applicants should have made themselves aware of this agreement as part of their due diligence when purchasing their unit, and if there are insufficient funds to cover the increased payments then this will need to be reviewed at the budget committee meeting set down for 11 March 2008.

These submissions satisfy me that, if the matter does proceed to final determination, there is a serious question to be determined at least regarding whether the committee has acted beyond its authority to purport to voluntarily agree to some additional payments. This would be the case if the body corporate is not contractually bound to make the additional payments pursuant to the terms of the existing caretaking agreement. ^[1]

Inconvenience from an interim order

The applicant has established some justification for an interim order prohibiting the alleged payment pending a final determination of the dispute.

However, it is possible that the applicant will not succeed in establishing any contravention of the legislation and an interim order prohibiting the payment could potentially expose the body corporate to additional damages and costs if the caretakers are correct in their submission that the salary review was binding pursuant to the terms of the caretaking agreement.

Further, the applicants have not satisfied me that an interim order is necessary to prevent serious or irreparable harm. If the existing contract requires the payments then no harm will be done by the making of the payments. On the other hand, if the committee is intending to act without authority to agree to additional payments then presumably this application will have placed the caretaker on notice that the committee’s actions are disputed and any purported agreement beyond authority is likely to be void. Unless the body corporate has already agreed to make the payments then any payments made without authority should be able to be subsequently recovered.

Order

For these reasons, I decline to make the interim order sought.

The application will be allowed to proceed to submissions and a final determination in the normal course.

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^[1] I note that the applicants are not challenging the validity of the caretaking agreement itself. If the applicants wish to challenge contractual matters about the body corporate’s entry into the caretaking agreement, or if the present dispute becomes a question of the proper construction of rights under the caretaking agreement between the body corporate and the caretakers, then the applicants will need to lodge a separate application to the Commercial and Consumer Tribunal under the Commercial and Consumer Tribunal Act or obtain the caretaker’s consent for specialist adjudication under the Body Corporate and Community Management Act (Body Corporate and Community Management Act, 149B).