Cathedral Place [2009] QBCCMCmr 419 (27 October 2009)

I hereby order that the application for two declarations in relation to the one item of expenditure that being:

Capacity of the Committee of Cathedral Place Community Body Corporate to approve the expenditure.

That the committee of the Cathedral Place Community Body Corporate does not have the capacity to approve the expenditure, as the approval of the expenditure has not complied with the requirements as set out in section 190 of the Mixed Use Development Act.

Classification of the expenditure as a restricted item of expenditure.

That if it is found by the Commissioner that the expenditure is approved – that it is to be classified as partially a restricted expense and partially an unrestricted expense in the financial statements of the Cathedral Place Community Body Corporate and therefore to be allocated against levies raised as Restricted and Unrestricted expense.

is dismissed.

This application is by the body corporate for Notre Dame, Building Units Plan 106912 (the Applicant) against the Cathedral Place Community Body Corporate (CPCBC) seeking the following two declarations in relation to the one item of expenditure that being:

The item of expenditure referred to is an amount of $20,754 in relation to repairs to an irrigation system. At a committee meeting of the CPCBC on 2 July 2009, a resolution was made “that the outstanding accounts for repairs be paid immediately and that the expense be paid from the restricted administration fund.”

The CPCBC is created by virtue of the Mixed Use Development Act 1993 (MUD Act) (s167(1)). The bodies corporate created by the registration of a group titles plan or building units plan subdividing a community development lot or a community stratum lot becomes a member of the CPCBC (s167(6), MUD Act).

The current members of the CPCBC are: Oxford and Cambridge body corporate; Notre Dame body corporate; Canterbury and Westminster body corporate; Kensington and Sandringham body corporate; Duhig body corporate; and Cathedral Village body corporate. A member of the CPCBC may appoint a person to represent the member (s169(1), MUD Act).

The Building Units and Group Titles Act 1980 (BUGT Act) applies for the operation of the MUD Act (s5A, BUGT Act). Section 214A of the MUD Act provides that “Unless otherwise provided in this Act, a dispute about the operation of this Act or the rights and obligations of persons under this Act may be dealt with under the Building Units and Group Titles Act 1980, part 5”.

Part 5 of the BUGT Act concerns disputes. Part 5, division 3 makes provision for orders by a referee. Within division 3, section 77 provides general powers of a referee to make orders. Relevantly, section 77(1) provides a general power for a referee, on application of a proprietor, to make an order on any person entitled to make an application under this subsection or on the chairperson, secretary or treasurer of the body corporate for the settlement of a dispute, or the rectification of a complaint, with respect to the exercise or performance of, or the failure to exercise or perform, a power, authority, duty or function conferred or imposed by this Act in connection with that parcel. An order made may include such ancillary or consequential provisions as the referee thinks fit (s73(1)(f), BUGT Act).

The Applicant is a member of the CPCBC and is therefore entitled to make an application under section 77(1).

On 4 August 2009, a copy of the application was provided to the body corporate manager for distribution to all members of the CPCBC. One submission was made in response to this invitation.

The submission, made on behalf of the Oxford & Cambridge body corporate, was supportive of the application, commenting that the body corporate believed the cost for the sprinkler system should not be allocated to their body corporate through any funds, as this was not a job that was quoted on or submitted to their body corporate for approval at any time prior to the request for payment. It is further commented that as the sprinklers were witnessed as working effectively prior to 3rd November 2008, they would not have approved such an expense without a lot of further investigation.

Peter Zunker, chairperson of the Applicant body corporate, purported to amend the application on 1 September 2009 by facsimile in which he included invoices which were the subject matter of the original application, totalling $20,754.03 and advised that at a committee meeting of the CPCBC on 29 July 2009, the motion of the 2 July 2009 to pay the invoice for repairs to the irrigation system had been rescinded. Mr Zunker advised that while it appeared in the first instance that the payment of these invoices would not proceed, it was his belief that eventually a payment would be attempted to be made by the CPCBC for these invoices.

Mr Zunker further advised that, in the meantime, other expenditure was being undertaken that has been contested as not being within the capacity of the committee to approve for payment. While not the subject of the initial application, these amounts, Mr Zunker advised, have arisen for payment after this application was submitted, but fall under the same principle being contested, being that it is not within the committee’s capacity to approve the expenditure. The expenditure was said to be for repairs to the electrical lighting system in the amount of $11,220.00, which Mr Zunker believes has been paid. Mr Zunker suggested that this could mean that the current application would apply to these invoices rather than the irrigation system invoices.

A copy of the further information submitted by Mr Zunker was provided to the body corporate manager for distribution to all members of the CPCBC.

No submissions were received in response to the further information provided by Mr Zunker, although Mr Zunker purported to “reply” by email dated 15 September 2009. This email contained further information on events that had transpired since his last communication with the Office.

Powers of a referee to make orders

Part 5 of the BUGT Act establishes the powers of a referee to make certain orders. Division 3 of the part deals with orders. Specifically, section 75 makes general provision for orders; section 76 provides for interim orders; section 77(1) provides a general power to make orders; and section
78 provides further powers to make an order. Sections 79 to 94B make provision for orders about particular matters.

This application has been made pursuant to section 77(1) which relevantly provides a power for a referee, on application of a proprietor, to make an order on any person entitled to make an application under this subsection or on the chairperson, secretary or treasurer of the body corporate for the settlement of a dispute, or the rectification of a complaint, with respect to the exercise or performance of, or the failure to exercise or perform, a power, authority, duty or function conferred or imposed by this Act in connection with that parcel. As mentioned earlier, under ‘Jurisdiction’, a referee’s power to make an order in relation to the MUD Act is conferred by section 214A of that Act.

Relevantly, section 77(1) specifies that a ‘dispute’ or ‘complaint’ must relate to the exercise or performance of, or the failure to exercise or perform, a power, authority, duty or function conferred or imposed by this Act. Section 214A contemplates a ‘dispute’ about the MUD Act’s operation
or the rights and obligations of persons under the MUD Act. A referee’s power under section 77(1) is to settle the ‘dispute’. In my view, these provisions require the existence of a ‘dispute’.

However, neither Act defines the meaning of ‘dispute’. In the comparable dispute resolution jurisdiction conferred by the Body Corporate and Community Management Act 1997 (BCCM Act), section 227 prescribes the meaning of ‘dispute’ as being between particular parties such as the owner of a lot and the body corporate, with section 238 stating that A person ... may make an application if the person is a party to, or is directly concerned with, a dispute to which this chapter (chapter 6) applies. Section 276(1) of the BCCM Act provides that an adjudicator may make an order to resolve a dispute. Subsection (1) also contemplates the making of a declaratory order, but there is no equivalent power in the BUGT Act.

The issue of the existence of a ‘dispute’ under the BCCM Act has been considered by the District Court (the then appellant jurisdiction against an order made by a department adjudicator under the BCCM Act). In K.G. Tully & Anor. v The Proprietors The Nelson Body Corporate [2000] QDC 031,
Judge Robin QC held that There must be “dispute” before an adjudicator has jurisdiction. The application identified the committee of the body corporate as the other party to the dispute. The respondent's case is that the nature of the permission sought by the appellants was such that
the body corporate itself must give permission or authority; it never having been asked by the appellants to do so there can be no dispute involving it as a party, and therefore no right in the applicants to apply to the adjudicator on the basis that they are parties to "a dispute" for
purposes of s.192(1)(a) (renumbered as section 238). The objection to the application is sound in principle, in my opinion. The existence of a relevant “dispute” is fundamental to an adjudicator having jurisdiction.

In Dindas & Anor v Body Corporate for One Park Road CTS 2114 & Ors [2006] QDC 302, Judge Wilson SC removed an adjudicator’s order stating that “The dispute resolution provisions do not empower an adjudicator to make orders about how a lot owner may vote in relation to a future matter, and limit the adjudicator’s powers to circumstances where a power has been exercised contrary to the legislation. The adjudicator has assumed (without any factual foundation for the assumption) that all future proposals for the appointment of a building manager by either the appellants, or the respondents will be "unreasonable" and, therefore, invalid when there is
no proper basis for that presumption. Further, there is nothing in the Act or modules that prevent a lot owner from voting at a general meeting in favour of the appointment of themselves as a service contractor, even though they might derive a direct or indirect benefit.”

These comments are relatable to the jurisdiction of a referee under the BUGT Act and support the view that a referee only has jurisdiction to make an order if there is an identifiable ‘dispute’. I am not aware of any provision in the BUGT Act or the MUD Act which empowers a referee to deal
with an anticipated contravention of either of these Acts (in contrast to the power of an adjudicator under section 276(1) of the BCCM Act). The BUGT Act and the MUD Act are quite specific in conferring powers on a referee. It should also be noted that section 214A of the MUD Act does
not in any way confer exclusivity.

The applicant has sought a declaration about the application of section 190 of the MUD Act and asserts that it is necessary that the powers of the committee to approve expenditure are clearly defined. The original motion, to approve the payment of expenditure totalling $20,754 in relation to repairs to an irrigation system, (which was the impetus for this application), has since been rescinded. The applicant has purported to amend the application to now relate to further expenditure, totalling $11,220 for electrical work, which has arisen for payment after this application was lodged. In these circumstances, I do not consider that the order sought relates to a ‘dispute’ of the nature mentioned in section 214A of the MUD Act. I do not consider that a referee has power to make orders about matters that were not in existence at the time an application was lodged. I consider that a referee’s powers are limited to circumstances where a power has been exercised contrary to legislation.

Seemingly, the applicant seeks a direction to be made to the CPCBC about how future business is transacted. While the applicant has outlined one past event in relation to the expenditure on the irrigation system and points to possible future problems, including the expenditure in relation to electrical work, the applicant has not shown that a ‘dispute’ exists of the type contemplated by the BUGT Act or the MUD Act. A ‘dispute’ may arise if the CPCBC approves further expenditure and the applicant (as a member of the CPCBC) questions the decision or decisions actually made on a belief for example, that the decision was contrary to the MUD Act.

In my view, the ‘dispute’ the subject of the original application has been resolved and the ‘dispute’ which the applicant contemplates in relation to the expenditure on electrical work and purports to substitute for the original subject matter of the application, was not a dispute about the operation of the MUD Act or the rights and obligations of persons under the MUD Act, at the time this application was lodged. Therefore, the orders sought are dismissed.

Name of Plan:	Cathedral Place
Number of Building or Parcel:	MCP106902
Address of Parcel:	41 Gotha Street FORTITUDE VALLEY QLD 4006

Queensland Body Corporate and Community Management Commissioner - Adjudicators Orders

Cathedral Place [2009] QBCCMCmr 419 (27 October 2009)