Alexandria [2011] QBCCMCmr 559 (14 December 2011)

Last Updated: 22 December 2011

ADJUDICATOR’S ORDER
Office of the Commissioner
for Body Corporate and Community Management

CITATION:	Alexandria [2011] QBCCMCmr 559
PARTIES:	The Body Corporate for Alexandria (applicant) CTS Management Pty Ltd (respondent)
SCHEME:	Alexandria CTS 10744 (Alexandria)
JURISDICTION:	Sections 227(1) and 229(3)(a) of the Body Corporate and Community Management Act 1997 (Qld) (Act), applying the Act and the Body Corporate and Community Management (Standard Module) Regulation 2008 (Standard Module).
APPLICATION NO:	0868-2011
DECISION DATE:	14 December 2011
DECISION OF:	S Zeidler, Adjudicator
CATCHWORDS:	JURISDICTION – whether this application falls within section 227(1)(i) of the Act. Act, s 227(1)(i).

ORDERS MADE:

I hereby order that the application is dismissed.

REASONS FOR DECISION
Application

[1] This application was made by the Body Corporate for Alexandria (applicant) against the former body corporate management company, CTS Management Pty Ltd (respondent). The body corporate says CTS Management Pty Ltd (CTSM) removed $6,459.52 from its account in payment of CTSM invoices without body corporate authorisation and in direct contravention of committee instructions. Accordingly, the body corporate requests that CTSM be ordered to return $6,459.52.

Procedural Matters

[2] Under section 243 of the Act, a copy of the application was provided to the respondent, CTSM, to respond to the matters raised by the application. A submission was received from CTSM. The applicant inspected the submission received and made a written reply.[1] A dispute resolution recommendation was then made referring the dispute to departmental adjudication.

Jurisdiction

[3] Section 227(1) of the Act sets out the combinations of parties which may have a ‘dispute’ within the jurisdiction of our Office. Section 227(1)(i) of the Act says a dispute may be between:

“the body corporate for a community titles scheme and a former body corporate manager for the scheme about the return, by the former body corporate manager to the body corporate, of body corporate property”.

[4] Accordingly, the key question to be determined is whether the alleged wrongful possession of funds falls within the ambit of section 227(1)(i).
[5] In Azure Waters[2] Specialist Adjudicator, Robert Myers, noted that jurisdiction for disputes between a body corporate and a former body corporate manager is extremely limited covering only ‘the return...of body corporate property’. Mr Myers then went on to clarify this phrase stating:

“section 227(1)(i) is not an appropriate head of power to invest jurisdiction in the Commissioner for Body Corporate and Community Management to determine whether funds have been misappropriated from a bank account well after the date of termination of a Body Corporate Management Agreement.”

[6] Rather, Mr Myers expressed the view that section 227(1)(i) only gives the Commissioner’s Office jurisdiction in claims equivalent to that of ‘detinue’. That is, claims involving property which has unlawfully been retained by a former body corporate manager and was capable of being recovered.
[7] Further, Mr Myers stated that the words ‘return’ and ‘property’ in section 227(1)(i) should be used in the context that is part of the normal functions of the body corporate manager to have possession and control of rolls, records and books of account. Mr Myers considered that “one would not ordinarily describe an action to recover moneys misappropriated from a principal’s bank account by a former manager as an action seeking the return of property”.
[8] Following the reasoning of Azure Waters, I consider section 227(1)(i) can only be used to compel the return of property where it is being held by the former body corporate manager in continuation of its role after termination. Further, I consider the words ‘return’ and ‘property’ should be considered in the context that is part of the normal functions of the body corporate manager to have possession and control of rolls, records and books of account.
[9] In this instance, the body corporate is not claiming that CTSM is merely holding $6,459.52 in continuation of its role as body corporate manager and refusing its return. Rather, the body corporate says CTSM removed $6,459.52 from its account without body corporate authorisation and in direct contravention of committee instructions. I do not consider these issues fall within the ambit of section 227(1)(i). Rather, I consider it appropriate that the conduct described in this application, allegedly involving the wrongful possession or misappropriation of moneys, be examined in a Court of competent jurisdiction.
[10] On this basis, I am dismissing the application.

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[1] See sections 246 and 244 of the Act respectively.
[2] [2006] QBCCMCmr 210 (28 April 2006).