Grand Pacific Resort [2009] QBCCMCmr 357 (18 September 2009)

Last Updated: 9 October 2009

REFERENCE: 0796-2009

INTERIM ORDER OF AN ADJUDICATOR

MADE UNDER PART 9 OF CHAPTER 6

BODY CORPORATE AND COMMUNITY MANAGEMENT ACT 1997

Number of Scheme:	29576
Name of Scheme:	Grand Pacific Resort
Address of Scheme:	100 Bulcock Street CALOUNDRA QLD 4551

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

David Cox, a co-owner of lot 115

I hereby order that the application for the following interim orders: that the AGM be rescheduled to another date;. That he does not owe any overdue body corporate levies; That the body corporate accept his committee nomination form dated 31 July 2009; That the body corporate committee do not use their refusal to grant his levy discount request as a deliberate means of stating, that because in their view he owes a body corporate debt, they will refuse his committee nomination as this always was their deliberate intention; That interest stop accruing on his levies immediately as the alleged overdue levies of $791.85 are in dispute and this current amount should not be increased until this matter is resolved; That all his submitted AGM motions, explanatory notes and supporting documents are included in the AGM notice. Is dismissed.

STATEMENT OF ADJUDICATOR’S REASONS FOR DECISION - REF 0796-2009

“Grand Pacific Resort” CTS 29576

Application

Grand Pacific Resort is a 122 lot scheme on a building format plan and is regulated by the Body Corporate and Community Management (Accommodation Module) Regulation 2008.The applicant is the owner of lot115 and seeks the following interim orders:

• That the distribution of the Annual General Meeting Notice be delayed to allow a submission from the committee to my application if required.
• That he does not owe any overdue body corporate levies;
• That the body corporate accept his committee nomination form dated 31 July 2009;
• That the body corporate committee do not use their refusal to grant his levy discount request as a deliberate means of stating, that because in their view he owes a body corporate debt, they will refuse his committee nomination as this always was their deliberate intention;
• That interest stop accruing on his levies immediately as the alleged overdue levies of $791.85 are in dispute and this current amount should not be increased until this matter is resolved;
• That all his submitted AGM motions, explanatory notes and supporting documents are included in the AGM notice.
  

The final outcomes sought by the applicant are as follows:

• An order that he is not liable for any overdue body corporate levies of any description including any interest;
• An order that the “discount policy” is void and of no effect as it does not conform with relevant legislation and owners already benefit from a 10%levy discount if paid by the due date & therefore a discount policy is unnecessary;
• An order that the committee has discriminated against him by approving 8 levy discount requests during this year up until the date of this application and deliberately implementing a discount policy to deny the applicant;
• An order that the body corporate comply with the act in respect of the “Form 12 of 19 June 2009” wherein he requested details of the sections of the legislation relied upon to deny him a levy discount, in view of the fact that he did not receive any notice before the due date;
• An order that the body corporate supply him sections of the legislation which validate the discount policy;
• An order that the body corporate committee accept his committee nomination form dated 31 July 2009;
• An order that the body corporate committee do not use their refusal to grant a levy discount as an excuse to reject his application for committee nomination.
  

The applicant has made the following submissions in support of his application:

• He believes that committee members and the body corporate manager have conspired to hastily organise an unnecessary discount policy that discriminates against the applicant and denies the applicant natural justice;
• A committee meeting was held on 14 February 2009 to consider a higher than usual number of requests for levy discounts;
• He believes that the number of requests were attributable to levy notices being sent out with notification of the committee meeting and as a result it was resolved to ask the body corporate manager to send these out separately in future;
• 5 requests for levy discounts were considered at this meeting but there was no discussion regarding a “levy discount policy”;
• A committee meeting was held on 26 March 2009 at which a further request for a levy discount was considered but there was still no discussion regarding a “levy discount policy”;
• On 29 May the applicant emailed the body corporate manager outlining his concerns regarding a “Notice of Overdue Levies” dated 18 February which he had received
• The notice stated that the due date for payment was 1 February 2009 which was impossible to pay as he had not previously received a Notice of Contributions;
• He paid the levies on 4 March less the discount to which he believed he was entitled;
• On 4 June 2009 a committee meeting was held at which a “Discount Policy” was considered and at that meeting it was resolved that the body corporate adopt the following policy for considering requests for a levy discount when they do not pay the body corporate levy by the due date for payment:-
  1. Where the owner must have paid their levies on time for the past 2 years; and

the owner has missed the due date for payment by up to 3 business days and has a legitimate reason for the late payment;

the discount will be granted.

2. the owner has a valid reason for missing the payment or claims not to have received the levy notice and upon receipt of the first reminder notice pays the outstanding gross amount within 5 business days and then submits a written application to the body corporate to have the discount credited back to the account, the discount will be granted.

• Two requests for a levy discount were approved at this meeting although the applicant’s request was declined “as the owner was sent the first reminder notice on 18 February 2009, paid the net amount on 5 March 2009 and did not make a written application to the body corporate until 29 May 2009. Given this, the owner did not meet the requirements to be granted the discount.”
• The applicant believes that the committee and North Coast Body Corporate Management (NCBCS) have conspired to hastily arrange a discount policy within 32 hours of receiving his request, intentionally reversed a previous decision regarding lot 49 to fit within the constraints of the new policy, granted a discount to lot 70 by making sure that the request conformed with the new discount policy, deliberately arranged the policy to discriminate against the applicant, had ample time to implement a discount policy from the 14th February after having already approved 6 levy discount requests and had no intention of having a discount policy be4fore receiving his request on Tuesday, 2 June 2009.
  

Pursuant to section 271 of the Act I invited the body corporate committee and the body corporate manager to respond to the application.

The body corporate committee made the following submissions:

• The applicant has not resided permanently within the scheme for at least 12 months;
• The body corporate denies the allegations against the body corporate committee and the body corporate manager;
• The body corporate admits that a committee meeting was held on 14 February and that 5 requests for levy discounts were considered at that meeting;
• It denies that there were any distribution issues in relation to owners receiving levy notices;
• It was not concerned about owners failing to receive their levy notices but were concerned that some owners may not realise that the material sent to owners included a levy notice & concluded that in future it would be best to send levy notices to owners under separate cover rather than with other body corporate material such as minutes of meetings;
• The committee did discuss the levy discount policy which had previously been applied since early 2008 and the intention was to finalise a written policy which could be distributed to all owners;
• The body corporate admits that a committee meeting was held on 26 March, that the committee approved a request by an owner for a levy discount at that meeting, and did discuss on an informal basis the proposal to commit the body corporate’s discount policy to writing and to distribute that policy, but otherwise denies the allegations made;
• The body corporate received the applicant’s email on 29 May and distributed it to committee members on 2 June but does not otherwise admit the allegations made;
• The committee had being applying a discount policy since early 2008 and information was presented to the meeting on 4 June which disclosed the committee’s earlier decision regarding lot 49 had been based on incorrect information and that it was reasonable and proper to reverse its earlier decision because the owner of lot 49 now met the criteria in the body corporate’s discount policy;
• The body corporate manager received a BCCM Form 12 on 19 May 2009 and sent a response on 24 June but otherwise denies the allegations made.
• The minutes of the AGM held on 25 October 2008 contain details of the body corporate levies for the financial year from 1 August 2008 to 31 July 2009.
• The minutes also contain details of the due date for each of the periodic levy payments and were distributed to all owners including the applicant. (A copy of these minutes was attached to the submission.);
• The levy notice for the period 1 February 2009 to 30 April 2009 was sent to all owners on 18 December 2009;
• The levy notice for lot 115 was sent by the body corporate manager to the applicant’s nominated email address on 18 December 2008;
• The body corporate manager did not receive any delayed or non delivery notice in respect of the email sent to the applicant on 18 December and the applicant did not contact the body corporate manager following receipt of the Notice of Overdue Levies issued to the applicant on 18 February to query or complain about not receiving the original levy notice;
• The first occasion that the applicant claimed not to have received the levy notice was his email to the body corporate manager dated 29 May, nearly 3 months after the applicant had paid levies to the body corporate;
• The applicant knew or ought to have known that 1 February was the due date for payment and failure to pay by that date would result in a loss of entitlement to the discount;
• The decision of the committee not to allow the discount was the proper decision in the circumstances;
• The discount policy adopted on 4 June 2009 was a formalisation of a policy which had applied since early 2008 and which had been discussed at numerous committee meetings;
• The applicant has owned his lot since the establishment of the scheme;
• Under section 18(4) of the Accommodation Module regulation an owner is not eligible to nominate for election as a voting member if at the time the nomination is received by the secretary, that owner owes a body corporate debt;
• The financial year for the scheme runs from 1 August to 31 July;
• The applicant submitted his committee nomination form to the body corporate manager by email at 5.17pm on Friday 31 July 2009 but it is contended that the nomination did not comply with section 19 of the accommodation Module because it was not signed and the form did not specify which position he was applying for;
• The AGM is due to be held on 19 September;
• The application for an interim order should be dismissed because the applicant has not established any urgent circumstances & the inconvenience and cost to the body corporate of making an interim order would by far outweigh the inconvenience caused to the applicant by waiting until a final determination is made.
  

The submissions by the body corporate manager confirmed those submissions made by the committee and also included the following:

• The discount policy was not hastily arranged and since at least 2008 this has been the policy of the body corporate regarding discount requests;
• There has never been an issue with the distribution of levy notices either by post or by email;
• The applicant has previously requested that all information be sent by email;
• Investigations and inquiries with their IT consultants and software provider have provided no evidence to indicate that the applicant was not provided with his levy notice by email.
  

On 14 September and again on 16 September, the applicant sought to amend his application in a number of respects including the following:

• By seeking an interim order that the AGM be rescheduled to another date as he had no chance to lodge his application until after the notice of the AGM was distributed;
• Setting out the grounds for the order “in a more chronological order”
  

Jurisdiction

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 community management statement; or
(b) the exercise of rights or powers, or the performance of duties, under the Act or the community management statement; 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)). Specifically, without limiting
the power of an adjudicator to make an order under section 276(1), an adjudicator may make an order ... appointing an administrator, and authorising the administrator to perform—
(a) obligations of the body corporate, its committee, or a member of the committee under this Act or the community management statement; or
(b) obligations of the body corporate under another Act.

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)).
Sub-sections 279(1) & (2) provide that -
(1) The adjudicator may make an interim order if satisfied, on reasonable grounds, that an interim order is necessary because of the nature or urgency of the circumstances to which the application relates.
Examples
1. The adjudicator may stop the body corporate from carrying out work on common property until a dispute about the irregularity of proceedings has been investigated and resolved.
2. The adjudicator may stop a general meeting deciding or acting on a particular issue until it has been investigated and resolved.
(2) An interim order
(a) has effect for a period (not longer than 1 year) stated in the order; and
(b) may be extended, varied, renewed or cancelled by the adjudicator until a final order is made; (c) may be cancelled by a later order made by the adjudicator; and
(d) if it does not lapse or is not cancelled earlier, lapses when
(i) the application is withdrawn; or
(ii) the commissioner gives the person who made the application a written notice under section 241 rejecting the application; or
(iii) a final order is made by an adjudicator to whom the application is referred. ...

Determination

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 and the applicant needs to establish that the circumstances warrant an interim order. An interim order will not be made if the only urgency relates to an applicant’s desire to resolve or expedite the matters in dispute, or where the nature of the circumstances are such that the matter is not capable of being dealt with in the context of an interim order. Of particular relevance is evidence that an interim order is necessary to prevent serious or irreparable harm.

Further, for it to be just and equitable to grant injunctive relief pending a final determination, I would need to be satisfied that the balance of convenience between the parties justifies the grant of injunctive relief. That is, I would need to balance the inconvenience of granting relief now if final orders are ultimately refused against the inconvenience of refusing relief now if final orders are ultimately granted.

At this point in time, the applicant seeks the following interim orders:

• that the AGM be rescheduled to another date;.
• That he does not owe any overdue body corporate levies;
• That the body corporate accept his committee nomination form dated 31 July 2009;
• That the body corporate committee do not use their refusal to grant his levy discount request as a deliberate means of stating, that because in their view he owes a body corporate debt, they will refuse his committee nomination as this always was their deliberate intention;
• That interest stop accruing on his levies immediately as the alleged overdue levies of $791.85 are in dispute and this current amount should not be increased until this matter is resolved;
• That all his submitted AGM motions, explanatory notes and supporting documents are included in the AGM notice.
  

The nub of the dispute is the applicant’s belief that the body corporate hastily organised an unnecessary discount policy that discriminates him and denies him the opportunity to nomination for appointment to the committee, because it is claimed that he owes a body corporate debt.

It is not disputed that the financial year for this scheme runs from 1 August to 31 July. Nor is it disputed that the minutes of the AGM held on 25 October 2008 contain details of the body corporate levies for the financial year from 1 August 2008 to 31 July 2009 and details of the due date for each of the periodic levy payments. It is noted that the due date for payment of the levy for the period 1 February 2009 to 30 April 2009 was 1 February .

I have reviewed a copy of above minutes and have also noted data extracted from the body corporate manager’s computer system which indicates that the levy notice was issued to the applicant by email on 18 December. While I do not regard this as conclusive evidence, at this point in time, on the balance of probabilities, I believe that the applicant knew or should have known that the due date for payment of the levy was 1 February.

The next matter which I turn to is the failure to provide the applicant with a discount. I note that on 4 June 2009 a committee meeting was held at which a “Discount Policy” was considered and it was resolved that the body corporate adopt the following policy for considering requests for a levy discount when a body corporate levy is not received by the due date:-

• Where the owner must have paid their levies on time for the past 2 years; and

the owner has missed the due date for payment by up to 3 business days and has a legitimate reason for the late payment the discount will be granted.

• Where the owner has a valid reason for missing the payment or claims not to have received the levy notice and upon receipt of the first reminder notice pays the outstanding gross amount within 5 business days and then submits a written application to the body corporate to have the discount credited back to the account, the discount will be granted.
  

While I can understand the applicant’s suspicions regarding the articulation of this policy at the same meeting at which his request for reimbursement of the discount was rejected, the committee and body corporate manager have indicated that this “policy” was a formalisation in writing of how the body corporate previously dealt with such requests. Given that the applicant paid the net amount on 5 March 2009 and did not make a written application to the body corporate until 29 May 2009, it would seem that he did not meet the criteria used by the committee in deciding whether to allow the discount. My preliminary view in the context of making an interim order is that the applicant has failed to establish that the committee deliberately formulated this policy in order to deny him the discount or to prevent him from nominating for committee membership. Accordingly at this point in time I do not propose to make an interim order to the effect that the applicant is entitled to the discount for early payment.

The next matter which I turn to is the applicant’s claim that the actions of the body corporate have denied him the opportunity to nominate for election to the committee. While the actions of the committee did result in the applicant owing a debt to the body corporate, my preliminary view is that the applicant’s nomination for committee membership was invalid because the nomination did not comply with section 19 of the Accommodation Module. This is because it was not signed and the form did not specify which position or positions he was applying for.

Having regard to the above, I do not believe that it is appropriate to make the interim orders requested by the applicant. I note that the application for final orders remain outstanding and before making a determination as to whether such final orders should be made, I will have had an opportunity to seek further submissions and provide the applicant with a right of reply. At this point in time I do not believe that urgent intervention is warranted and that the balance of convenience does not favour the making of interim orders i.e. the inconvenience and cost to the body corporate of making an interim order would by far outweigh the inconvenience caused to the applicant by waiting until a final determination is made.

Interim relief is therefore declined. The application will be referred back to proceed to submissions and final determination in the normal course.