Rosebank South [2009] QBCCMCmr 300 (17 August 2009)

Last Updated: 28 September 2009

REFERENCE: 0508-2009

ORDER OF A REFEREE

MADE UNDER PART V

BUILDING UNITS AND GROUP TITLES ACT 1980

Name of Plan:	Hope Island Resort Principal Body Corporate
Number of Building or Parcel	GTP 102509
Address of Parcel:	Hope Island QUEENSLAND

TAKE NOTICE that pursuant to an application made under section 106 of the Building Units and Group Titles Act 1980 by Body Corporate for Rosebank South, a member of the Principal Body Corporate

I hereby order that the application for a stay of an Adjudicator’s order dated 21 July 2009, pending the hearing of an appeal is dismissed.

STATEMENT OF REFEREE’S REASONS FOR DECISION – 0508-2009

“Hope Island Resort Principal Body Corporate”

Application for Stay of Order

This application is made pursuant to section 106 of the Building Units and Group Titles Act 1980 by Body Corporate for Rosebank South, a member of the Principal Body Corporate in relation to final orders made on 21 July 2009.

Section 106 of the Building Units and Group Titles Act 1980 provides as follows:
Appeal against order of referee
(1) Where a referee makes an order under this part—
(a) the applicant for the order; or
(b) a person who, in connection with the application for the order, duly made written submissions to the referee; or
(c) being an order requiring a person to do or refrain from doing a specified act, that person;
may appeal to a tribunal against the order of the referee by lodging a written notice of appeal with the referee, accompanied by the prescribed fee, not later than 21 days after the order takes effect.
(2) A person may appeal under this section against an order made by a referee under section 76(2) only on the grounds that the referee acted unreasonably by making the order.
(3) A notice of appeal lodged under subsection (1) shall specify—
(a) the name and address of the appellant; and
(b) the order appealed against; and
(c) the grounds of the appeal; and
(d) any other matter prescribed.
(4) The tribunal to which an appeal lies under this section is the tribunal to which, pursuant to subsection (5), the referee forwards the notice of appeal.
(5) Where a notice of appeal is lodged under subsection (1), the referee shall forward to the tribunal that, in the referee’s opinion, is nearest to the parcel to which the order appealed against relates—
(a) the notice of appeal; and
(b) the referee’s records relating to the order appealed against; and
(c) the notices referred to in subsection (6).
(6) The notices that the referee is required by subsection (5)(c) to forward are notices that shall be addressed to each of the following addressees—
(a) the appellant;
(b) each person (other than the appellant) entitled under subsection (1) to appeal against the order;
(ba) each person (other than a person referred to in paragraph (a) or (b)) on whom pursuant to section 95 a true copy of the order against which the appeal has been lodged has been served by the referee;
(c) the body corporate for the parcel to which the order appealed against relates, unless it is the appellant.
(6A) Each notice shall be accompanied by a copy of the notice of appeal and shall specify the tribunal which is to hear the appeal.
(7) The tribunal to which documents are forwarded under subsection (5) shall cause—
(a) the notices referred to in subsections (6) and (6A) to be completed by specifying therein—
(i) the place at which the tribunal specified in the notices is to determine the appeal; and
(ii) a time and day for the determination of the appeal to which the documents relate; and
(b) each notice to be sent by registered post to the addressee thereof so that it would, in the ordinary course of post, be received by the addressee not less than 7 days before the day specified in the notice pursuant to paragraph (a)(ii).

Most importantly, for the purposes of this application subsection 106(8) of the Building Units and Group Titles Act 1980 provides that:
where a notice of appeal is accompanied by an application for an Order under this subsection -

(a) the referee, before he forwards to a tribunal the documents referred to in subsection (5); or

(b) the tribunal to which he sent those documents,
may, by order, stay the operation of the Order appealed against and, where he or it does so, forward notice of the order made under this subsection to the persons referred to in subsection (6).

Background
The orders being appealed by the Rosebank South body corporate are as follows:

• that the application for an order that the motion at the Extraordinary General Meeting held on 1 June 2009 of the Hope Island Resort Principal Body Corporate whereby the Principal Body Corporate proposed to enter into the “Principal Body Corporate Management Agreement” with Cambridge Management Services Pty. Ltd. regarding work to be performed on the secondary thoroughfare, be declared invalid.

is dismissed.

• that the interim order made on 29 May 2009 (Ref 508-2009I) shall cease to have effect from the date of this final order.
  

The Interim Order referred to above, and revoked by the final order dated 21 July 2009 read as follows:

that Hope Island Resort Principal Body Corporate (PBC) is not to act upon any resolution upon the motion, to be considered at the Extraordinary General Meeting to be held on 1 June 2009, whereby the Hope Island Resort Principal Body Corporate proposes to enter into the “Principal Body Corporate Management Agreement” with Cambridge Management Services Pty. Ltd. regarding work to be performed on the secondary thoroughfare.

As the parties would be aware, these orders were made in respect of a dispute resolution application concerning a resolution by the PBC to terminate an existing Principal Body Corporate Management Agreement and enter into a new agreement with Cambridge Management Services Pty. Ltd. (CMS). During May 2009, 26 of the 28 residential bodies corporate within the Hope Island resort convened EGM’s to consider and vote upon the proposed new agreement. Of those 26 bodies corporate, 19 voted in favour of the new Management Agreement, 6 voted against the new Management Agreement and one body corporate did not vote on the matter at its EGM. The EGM for the Principal Body Corporate subsequently went ahead on 1 June 2009 and at that meeting, 24 votes were lodged, consisting of 5 “no” votes and 19 votes in favour of terminating the Management Agreement dated 1 June 1995, and entering into a new caretaking agreement, referred to as the Principal Body Corporate Management Agreement, with Cambridge Management Services Pty. Ltd.

The applicant, Rosebank South residential body corporate, alleged that the executive committee of the PBC had not made a full and frank disclosure about the new Management Agreement and claimed that the requirements of section 163 of IRDA had not been complied with. The applicant therefore argues that the subject motion by the PBC is ultra vires and cannot stand:

The appeal is made on the following grounds:

The referee erred in law by failing to properly construe and apply the provisions of the Integrated Resort Development Act 1987, specifically that the referee

• failed to recognise the applicability of section 163 of the Act; and
• failed to construe section 165 so that it is consistent with the language and purpose of all the provisions of the Statute, including section 163
• which has resulted in an order that is unreasonable and wrong at law.
  

The applicant states that while subsection 106(8) provides a discretion for a Referee to stay the order that is subject to appeal, it does not specify what factors are to be considered by a referee or tribunal in exercising that discretion. Therefore general principles applicable to a stay of an order made by a Court are relied upon. In particular, the applicant states that the following principles are relied upon by the High Court:

1. Where it is necessary to preserve the subject matter of the litigation i.e. “there would be little or no point in the contemplated High Court proceedings without a stay”: J v L&A Services [1993] Qd. R;..
2. Where enforcement of the judgement will result in significant irreversible loss or harm to the applicant for the stay, maki9ng the appeal nugatory: FCT v Myer (1986) CLR ; and.
3. where to refuse a stay might create difficulties in terms of the relief which the appellant tribunal may grant on the proposed appeal: Grasby v R. (1989) 63 ALJR per Mason CJ.
   

Further, it is submitted that the applicant will suffer a disadvantage if the decision is not stayed because the PBC will be able to enter into a Management Agreement with Cambridge Management Services, which may result in the appeal being rendered nugatory. In addition, the applicant believes that the new agreement, being a “Management Agreement” does not include caretaking services which the applicant believes, will need to be provided at an additional undisclosed cost.

In reply to inquiries by this Office, solicitors for the Principal Body Corporate advised that the Principal Body Corporate has already entered into the Management Agreement with Cambridge Management Services.

Decision

Section 106(8) of the Building Units and Group Titles Act 1980 provides that:
where a notice of appeal is accompanied by an application for an Order under this subsection -
(a) the referee, before he forwards to a tribunal the documents referred to in subsection (5); or
(b) the tribunal to which he sent those documents,
may, by order, stay the operation of the Order appealed against

The orders being appealed by the Rosebank South body corporate are as follows:

• that the application for an order that the motion at the Extraordinary General Meeting held on 1 June 2009 of the Hope Island Resort Principal Body Corporate whereby the Principal Body Corporate proposed to enter into the “Principal Body Corporate Management Agreement” with Cambridge Management Services Pty. Ltd. regarding work to be performed on the secondary thoroughfare, be declared invalid.

is dismissed.

• that the interim order made on 29 May 2009 (Ref 508-2009I) shall cease to have effect from the date of this final order.
  

It should be noted that the order appealed against does not relate to the legality of the proposed contract but rather, the validity of the following motion:

The Hope Island Resort Principal Body Corporate (PBC) resolves that, subject to motion 2 being passed, the authorised Executive Committee members execute the attached new Management Agreement between the PBC and Cambridge Management Services Pty. Ltd. for management services in relation to the secondary thoroughfare.

I am in agreement with the applicant insofar as it states that while subsection 106(8) provides a discretion for a Referee to stay an order that is subject to appeal, it does not specify what factors are to be considered by a referee or tribunal in exercising that discretion. I am also in agreement that the general principles applicable to a stay of an order by a Court should be relied upon in this case. However I do not believe that the circumstances of this case justify a stay of my final order.

There is a considerable number of recent cases regarding the discretion of a Court or Tribunal to issue a stay pending the hearing of an appeal. These cases include Patrick Stevedores Operations No. 2 Pty Ltd v Maritime Union of Australia [1998] HCA 32 and
Aussie Vic Plant Hire Pty Ltd v Esanda Finance Corporation Limited [2008] HCA 9.

In Patrick, Hayne J. noted that the principles to be applied are well established and find
their most frequent use is “in order to preserve the subject-matter of litigation” i.e. to prevent the exercise of rights of appeal being rendered futile. He also recognised that it was important to consider first whether there is a substantial prospect of success; what effects the grant or refusal of a stay would have, and to consider where the balance of convenience.

This approach has been followed in Queensland. In Henley v State of Queensland [2002] QCA 510, Davies JA stated that the Queensland Court of Appeal had said “more than once” that special circumstances must be shown to justify a stay on appeal. His judgment referred to Federal Commissioner of Taxation v The Myer Emporium Limited [1986] HCA 13; (1986) 160 CLR 220 where, in the judgment of Dawson J, at 222-223, it was held that “special circumstances” justifying a stay “will exist where it is necessary to prevent the appeal, if successful, from being nugatory”:

In this case the applicant is appealing against my decision to dismiss the application for the following: An order that the motion at the Extraordinary General Meeting to be held on 1 June 2009 of the Hope Island Resort Principal Body Corporate whereby the PBC proposes to enter into the “Principal Body Corporate Management Agreement” with Cambridge Management Services Pty. Ltd. regarding work to be performed on the secondary thoroughfare, be declared invalid.

With respect to the Applicant, I can see little point in granting the requested stay because the Principal Body Corporate has already entered into the Management Agreement with Cambridge Management services and therefore it cannot be said that a stay of my decision is necessary to “preserve the subject-matter of litigation” or “to prevent the exercise of rights of appeal being rendered futile”. I therefore believe that the application for a stay of the order dated 21 July 2009 should be dismissed.