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- Unreported Judgment
QUEENSLAND CIVIL AND ADMINISTRATIVE TRIBUNAL
Pead v Chambers & Anor  QCATA 103
THE BODY CORPORATE FOR OUTRIGGER SUITES CTS 32195
7 July 2020
On the papers
Member Roney QC
The application for leave to rely upon fresh evidence in the appeal is dismissed.
PROCEDURE – CIVIL PROCEEDINGS IN STATE AND TERRITORY COURTS – MOTIONS, INTERLOCUTORY APPLICATIONS AND OTHER PRE-TRIAL MATTERS – where applications filed for leave to rely upon fresh evidence in an appeal from a decision made by an Adjudicator appointed by the BCCM Commissioner
Body Corporate and Community Management Act 1997 (Qld), s 162, s 289, s 290
Queensland Civil and Administrative Tribunal Act 2009 (Qld), s 146
Peace and Good Behaviour Act 1982 (Qld)
Ericson v Queensland Building Services Authority  QCA 391
Albrecht v Ainsworth & Ors  QCA 220
This matter was heard and determined on the papers pursuant to s 32 of the Queensland Civil and Administrative Tribunal Act 2009 (Qld)
REASONS FOR DECISION
- This is an interlocutory application by an Applicant from a decision made by an Adjudicator appointed by the BCCM Commissioner. The Application is for leave to rely upon fresh evidence in the appeal which has been brought in this Tribunal. Senior Member Howard has already dealt with an application by the Respondents to the appeal to strike-out or dismiss the appeal, or the application for leave to appeal. The bases for that application were, inter alia because of technical non-compliances with time limits set for completion of steps in the appeal, but also a failure to comply with directions by this Tribunal that the Applicant identify errors of law which she contended the Adjudicator had made and to refer to any case law which she relied upon in support of her contentions in that regard.
- The learned Member concluded, by reference to the Applicant’s submissions filed in the Tribunal, that the Applicant had identified that the grounds of her appeal were that she had been denied natural justice, and that the findings which were made by the Adjudicator were unsupportable by the evidence. The learned Member concluded that if either of those issues were established by the Applicant in the appeal, then either would constitute an error of law. The learned Member accepted that there had been submissions which identified errors of law, and that there did not appear to be any case law relied upon in her appeal.
- The background to the appeal concerns resolutions passed by a committee of the Second Respondent Body Corporate on 20 December 2017 and 14 February 2018 which had the effect of having the Body Corporate pay the legal defence costs of three committee members, including the Applicant, before this Tribunal in respect of proceedings which had been brought against them under the Peace and Good Behaviour Act 1982 (Qld) by another lot owner. The practical effect of those resolutions was that the Body Corporate paid legal fees of between $5,000.00 and $6,000.00 for each of the three relevant committee members against whom that proceeding had been brought.
- The Adjudicator declared that the relevant resolutions were void and ordered that the three committee members concerned repay to the Body Corporate the amounts in question.
- The other two members of the committee who were affected by the orders of the Adjudicator have not appealed the orders. The present Applicant has sought that the Adjudicator’s order be set aside and that ‘the Tribunal, in all the circumstances, support the resolution on 14 February 2018 by the Body Corporate committee to pay the legal defence costs of the three committee members’.
- The Applicant’s appeal submissions are four pages in length and have another 20 pages of attachments. The Applicant’s appeal submissions recite that the appeal is based upon what is said to be a denial of natural justice. The submissions though then go on to challenge the findings of fact:
- (a)That the three committee members dismantled a security cage which belonged to the lot owner who had brought the peace and good behaviour proceeding;
- (b)As to whether there was any evidence that they were acting in the best interest of the Body Corporate;
- (c)As to whether there was evidence of a committee resolution authorising their actions;
- (d)As to whether there was any evidentiary support for the submission of the committee made to the Adjudicator that the three committee members were acting in their role as committee members, and in the Adjudicator’s decision not to accept that evidence (it seems because one of the members of the committee was in the basement carrying a hammer and proceeded to dismantle the security cage);
- (e)As to whether the correct conclusion was reached about whether the owner of the lot who had brought the proceeding had already indicated his intention to move the property out of the caged area and as to whether it was an appropriate course of action to then remove the cage or to bring some other kind of dispute resolution proceeding; and
- (f)As to whether there was evidentiary or legal support for the conclusion that a Body Corporate could not use these funds in a way that they were used ‘in the same way as directors of a company cannot use company funds for themselves’.
- My initial response to reading the reasons of the Adjudicator raises concerns as to the extent to which those reasons actually disclosed the process of reasoning that led to the Adjudicator arriving at the conclusions that were reached. Apart from reciting on more than one occasion the substance of the relevant resolutions and the dates that they were passed, the Adjudicator recited that a commercial lot owner had commenced peace and good behaviour proceedings against three of the committee members when they went to an area of common property within the car park, and proceeded to dismantle what it was contended were unlawful cages which had been constructed on the common property. The Adjudicator recited uncontroversial aspects of the evidence concerning what motions were put and what the effect of them was in relation to the payment of legal fees and then said as follows:
 By way of background information, the committee says that the above proceedings relate to actions of committee members to stop the owner of lot 115 using part of the basement area for purposes associated with the conduct of his restaurant business.
 The minutes of the committee meeting held on 7 September 2017 record the following:
Unauthorised Use of Carspace Area
It was reported that some residents are using carspaces which are not their allocated space to store personal items in the basement garage, such as trailers full of rubbish, deep freezers, chairs and various pieces of furniture.
Motion: - That the Body Corporate Manager to send a Notice to all residents requesting that all personal items must be removed from the basement garage within 14 days and also that all residents must ensure they are only using their allocated carspace.
 On 19 September 2017, a Notice in the above terms was circulated to all residents, and on 21 September the body corporate issued a BCCM Form 10 “Notice of Continuing Contravention of By-law” to the owner of lot 115.
 On 12 October, three committee members (Anthony Aitken, Jill Pead & Leana Hollands) undertook an inspection of the basement area. During this inspection, the owner of lot 115 was also present and he was advised that he was illegally storing goods items in carspace no.50. This confrontation led to the owner of lot 115 seeking a Court order under the Peace and Good Behaviour Act.
 On 7 November 2017, the Gold Coast City Council issued a Show Cause Notice to the body corporate, stating that the allocated car parking spaces for units 49 & 50 were being used as storage space for the restaurant (lot 115) in contravention of the development approval.
 On 28 November 2017, the Body Corporate received a letter from Whitehead Crowther Lawyers, acting on behalf of the owner of lot 115, stating that: "Our client has had the use of this for a number of years, however, he has conceded that he will remove all of the items within 60 days”.
 The committee believes that at the time of the incident in the basement garage, the three committee members were performing functions of the committee. The committee submit that the decision to engage OMB Solicitors to act on behalf of the committee members, was not a restricted issue for the Committee because such costs are outside the scope of section 42(1)(f) of the Accommodation Module.
 A submission was also received from Mrs Pead who is a member of the committee. Mrs Pead says that the two owners of commercial businesses operating within the scheme initiated action under the Peace and Good Behaviour Act against three members of the 2017 committee. She says Mr Trew withdrew his application on the first mention date. However, Mr Yapp continued with the application which was subsequently heard in the Magistrates Court.
 She further states that the owner of lot 115 was requested to remove his property from the storage area in the carpark, and it took over 4 months for him to finally remove his possessions including freezers used for storing foodstuffs. In her view the 3 committee members were trying to enforce the by-laws of the Body Corporate for the benefit of all members.
 The committee secretary also made a submission. She says that the 3 committee members misled other members of the committee and were wrongly reimbursed for legal expenses incurred for their actions, which were not authorised by the committee or body corporate. Their actions included removal of part of a security cage used by the owner of lot 115, abuse and unannounced inspections which were not authorised by the Committee. The owner of lot 115 was already in the process of moving his property out of the caged area. There are no minutes or records indicating that these three committee members were authorised to take these actions on behalf of the body corporate.
 Invoices were issued by OMB to the three committee members for their legal representation. These were paid out of body corporate funds without the treasurer sighting the invoices and approving payment.
 The applicant made further submissions in response. She says that the 3 committee members improperly voted to pay their legal expenses which amounted to more than $15,000 and they admitted under oath that they were not acting under the direction of the body corporate.
 She disputes that the 3 committee members were performing valid functions of the committee or that they were acting in the best interests of the body corporate. The applicant says Mr Aitken went to the basement carrying a hammer, and along with the other two committee members, proceeded to dismantle the security cage belonging to lot 115. She says the 3 people involved had no right to take any action and were clearly acting on their own volition which they have since admitted under oath.
- After reciting that background the Adjudicator concluded:
 The proceedings relate to a confrontation between three committee members and the owner of lot 115 in the basement of the building on 20 October 2017. While the committee says that these 3 persons were acting in their role as committee members, I have some difficulty accepting that this was the case. The applicant and Mr Yap, say Mr Aitken went to the basement carrying a hammer, and along with the other two committee members, proceeded to dismantle the security cage belonging to lot 115. There is no evidence of a committee resolution authorising their actions or that they were acting in the best interests of the body corporate. The applicant notes that the insurer has refused to reimburse the legal fees as they had no right to make a claim for their personal legal defence.
 The body corporate is a separate legal entity in the nature of a corporation, and committee members are bound by statutory and fiduciary obligations. The funds of the body corporate may only be applied for certain purposes such as maintenance of common property and non-recurrent expenses arising in connection with the operations of the body corporate. The body corporate may not vote to use these funds in any other way, in the same way as directors of a company cannot use company funds for themselves.
 Section 137 Accommodation Module states the things for which the administrative fund budget must provide. Section 146 then provides how the administrative fund can be applied, namely to all spending of the body corporate which is not sinking fund expenditure.
Subsections 137(2) & 137(3) Accommodation Module provide as follows:
Section 146 Accommodation Module provide [sic] as follows:
Application of administrative and sinking funds
- (2)The administrative fund budget must—
- (a)contain estimates for the financial year of necessary and reasonable spending from the administrative fund to cover—
- (i)the cost of maintaining common property and body corporate assets; and
- (ii)the cost of insurance; and
- (iii)other expenditure of a recurrent nature, and
- (b)fix the amount to be raised by way of contribution to cover the estimated recurrent expenditure mentioned in paragraph (a).
- (3)The sinking fund budget must—
having regard to—
- (a)allow for raising a reasonable capital amount both to provide for necessary and reasonable spending from the sinking fund for the financial year, and also to reserve an appropriate proportional share of amounts necessary to be accumulated to meet anticipated major expenditure over at least the next 9 years after the financial year,
- (i)anticipated expenditure of a capital or non-recurrent nature; and
- (ii)the periodic replacement of items of a major capital nature; and
- (iii)other expenditure that should reasonably be met from capital; and
- (b)fix the amount to be raised by way of contribution to cover the capital amount mentioned in paragraph (a).
Examples—1 The cost of repainting the common property or replacing air conditioning plant would be paid from the sinking fund. 2 The cost of insurance would be paid from the administrative fund.s
- (1)The sinking fund may be applied towards—
- (a)spending of a capital or non-recurrent nature; and
- (b)the periodic replacement of major items of a capital nature; and
- (c)other spending that should reasonably be met from capital.
- (2)All other spending of the body corporate must be met from the administrative fund.
 I believe that the three committee members were wrongly reimbursed for legal expenses incurred as a result of actions taken without authorisation by the committee or body corporate. It is not disputed that their actions included removal of part of a security cage used by the owner of lot 115. There are no minutes or records indicating that these three committee members were authorised to take these actions on behalf of the body corporate. The owner of lot 115 had already indicated his intention to move his property out of the caged area. If there were concerns that the owner of lot 115 was contravening the scheme by-laws, then the appropriate course of action would have been to seek dispute resolution pursuant to Chapter 6 of the Body Corporate and Community Management Act.
 I therefore order that the resolution of 20 December 2017 to pay the legal defence costs of the three committee members, and the resolution of 14 February 2018 confirming that resolution subject to certain amendments, were both void. Any body corporate funds spent in pursuance of the invalid resolutions must be returned to the body corporate. The body corporate must seek the return of any funds so expended.
(Emphasis as per the original reasons)
- The finding made that ‘there is no evidence of a committee resolution authorising their actions or that they were acting in the best interests of the body corporate’, is problematic when that is determinative of the issue in the face of contrary evidence that the committee said that these three persons were acting in their role as committee members at the time.
- There seems to be minimal if any analysis of what other basis it might be that a Body Corporate might reimburse a committee member who believed, wrongly or otherwise, that they were entitled to take action to protect common property, or remove unlawful improvements made to common property.
- There seems to have been little or no analysis of whether the provisions of s 137(2) and (3) of the Accommodation Module concerning the provision of administrative and sinking fund budgets, and s 146 of the Module concerning how administrative and sinking funds of a Body Corporate could be spent, necessarily limited the capacity of a Body Corporate committee to approve the legal costs of its members if they were subjected to legal proceedings arising out of their conduct whilst arguably taking action to protect the integrity of Body Corporate assets.
- The Adjudicator accepted as a fact that their actions which had been the subject matter of the proceeding, included removal of part of a security cage. Paragraph 65 of the reasons appears to involve some kind of value judgment about the appropriateness of the relevant committee members’ actions and whether in some way or another that bore upon the legality of the resolutions of the Body Corporate to reimburse them or pay for the legal costs of defending themselves against their conduct in that context.
- The ultimate conclusion of the Adjudicator on this issue is to be found at paragraph 65 of the reasons. They appear to contain a thread-bare analysis of the evidence which was before the Adjudicator concerning the question of authority to take actions or the question of the appropriateness of the committee members in taking the actions they took. There is no reference in the decision to circumstances in which a committee of a Body Corporate can take action in relation to Body Corporate common property, or reinstate the condition of unlawfully altered common property without the formality of the resolution or minutes in that regard. There is no reference in the decision to the capacity of the Committee to have ratified the relevant conduct even if it occurred without the benefit of a resolution at the time.
- Against that background, I consider the application for leave to rely upon fresh evidence.
- The fresh evidence in question falls into three categories.
- The first is petty cash claim forms which it is said support the contention that there was a rat infestation and that the rat infestation was motivation by the Applicant and the other committee members present that day to dismantle the storage panels. Reference to the existence of a rat infestation was made in the material placed with the Adjudicator. The reasons of the Adjudicator did not specifically deal with that issue. There are petty cash claim forms which show that approximately $250,000.00 was spent on rat poisoning in September 2017.
- It is said that these claims also show that the individual who made claim for the petty cash reimbursement, who was not a party to this proceeding, claimed twice for the same purchase, and was involved in some kind of concealment of the true position. In my view this evidence, even if it were capable of being admitted, would not be probative of any issue.
- The second category is documents which are extracts from Body Corporate committee meeting minutes, which concern the fact that there was a rat infestation which the Body Corporate committee had been attempting to deal with. There are three aspects, being the resolutions of 24 May 2017, 16 August 2017 and 7 September 2017 which identified that the Body Corporate had sought to deal with the rat problem. Again, it does not seem to me that the fact that these minutes have now been obtained is probative of any issue beyond that which had already been put forward in the submissions of the Applicant in this Tribunal when making submissions to the Adjudicator. The real problem with the reasons of the Adjudicator seems to be that there has been an entire failure to deal with the issue of the Body Corporate’s attempts to deal with the rat problem and how that affected the question of authority for what the 3 relevant members were doing there in the reasons. The proposed documents would do no more really than provide secondary evidence or corroborative evidence of what the present Applicant had referenced in her submissions about rats and the Committee’s attempts to deal with it.
- The third issue concerns an attempt to place the substance of the peace and good behaviour complaint which was brought against the committee members to show that contrary to the conclusions of the Adjudicator, it was not about an altercation between the lot owner and one of the committee members, but concerned damage to property. The Applicant says she was unaware of the content of the allegations made against her in the other submissions to the Adjudicator and the emphasis in those submissions about that altercation. The Adjudicator apparently relied on secondary evidence about what the subject matter of the complaint was.
- It is of concern that had the documentary and primary evidence of the nature of the Peace and Good Behaviour Act proceeding been before the Adjudicator, it may have led to a different result.
The powers of this Tribunal
- Sadly, neither the Applicant nor the Respondents cited any statutory or other authority either in support of the application to introduce new evidence, or in opposition to it. The Tribunal has been entirely left to conduct its own research and analysis of what the foundation for any such application might be and what authority or lack thereof exists allowing such additional evidence.
- The decision of the Adjudicator was given under s 276 of the Body Corporate and Community Management Act 1997 (Qld) (‘BCCM Act’ or ‘the Act’). Section 276 provides as follows:
276 Orders of adjudicators
- An adjudicator to whom the application is referred 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 claimed or anticipated contravention of this Act or the community management statement; or
- the exercise of rights or powers, or the performance of duties, under this Act or the community management statement; or
- a claimed or anticipated contractual matter about—
- the engagement of a person as a body corporate manager or service contractor for a community titles scheme; or
- 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.
- Without limiting subsections (1) and (2), the adjudicator may make an order mentioned in schedule 5.
- An order appointing an administrator—
- may be the only order the adjudicator makes for an application; or
- may be made to assist the enforcement of another order made for the application.
- If the adjudicator makes a consent order, the order—
- may include only matters that may be dealt with under this Act; and
- must not include matters that are inconsistent with this Act or another Act.
- The appeal to this Tribunal is governed by s 289 of the Act, which provides:
289 Right to appeal to appeal tribunal
- This section applies if—
- an application is made under this chapter; and
- an adjudicator makes an order for the application (other than a consent order); and
- a person (the aggrieved person) is aggrieved by the order; and
- the aggrieved person is—
- for an order that is a decision mentioned in section 288A, definition order—an applicant; or
- for another order—
- an applicant; or
- a respondent to the application; or
- the body corporate for the community titles scheme; or
- a person who, on an invitation under section 243 or 271(1)(c), made a submission about the application; or
- an affected person for an application mentioned in section 243A; or
- a person not otherwise mentioned in this subparagraph against whom the order is made.
- The aggrieved person may appeal to the appeal tribunal, but only on a question of law.
- Section 290 of the Act provides:
- An appeal to the appeal tribunal must be started within 6 weeks after the aggrieved person receives a copy of the order appealed against.
- If requested by the principal registrar, the commissioner must send to the principal registrar copies of each of the following—
- the application for which the adjudicator's order was made;
- the adjudicator's order;
- the adjudicator's reasons;
- other materials in the adjudicator's possession relevant to the order.
- When the appeal is finished, the principal registrar must send to the commissioner a copy of any decision or order of the appeal tribunal.
- The commissioner must forward to the adjudicator all material the adjudicator needs to take any further action for the application, having regard to the decision or order of the appeal tribunal.
- Section 146 of the Queensland Civil and Administrative Tribunal Act 2009 (Qld) (‘QCAT Act’) provides:
146 Deciding appeal on question of law only
In deciding an appeal against a decision on a question of law only, the appeal tribunal may—
- confirm or amend the decision; or
- set aside the decision and substitute its own decision; or
- set aside the decision and return the matter to the tribunal or other entity who made the decision for reconsideration—
- with or without the hearing of additional evidence as directed by the appeal tribunal; and
- with the other directions the appeal tribunal considers appropriate; or
- make any other order it considers appropriate, whether or not in combination with an order made under paragraph (a), (b) or (c).
- Pursuant to s 146, read with s 289 of the BCCM Act, in deciding an appeal against a decision on a question of law, this Appeal Tribunal is not engaged in a rehearing of the matter. Twice the Court of Appeal has decided that where this Tribunal is charged with determining a matter where the appeal is on a question of law, the Appeal Tribunal cannot treat the appeal as a rehearing, nor receive fresh evidence, nor make new findings of fact. And only if the determination of the legal error is capable of resolving the matter as a whole, can it substitute its own decision. Otherwise, the appeal must be allowed and the matter remitted.
- In Albrecht v Ainsworth & Ors the Court of Appeal held at  that:
The appeal to QCATA was limited to a question of law. It was an appeal in the strict sense, not an appeal by way of re-hearing. It had to be determined on the material before the adjudicator. But had QCATA correctly identified an error of law, I do not accept the applicant’s contention that its only course was to remit the matter to the same adjudicator for determination according to law. Once an error of law affecting the adjudicator’s decision was correctly identified, QCATA could exercise the adjudicator’s powers and substitute its own decision based on the material before the adjudicator, consistent with the adjudicator’s undisturbed factual findings. So much is clear from the terms of s 294 BCCM Act and s 146 QCAT Act.
- Although the Court of Appeal decision in Albrecht was overturned by the High Court on the basis that the Court of Appeal made numerous errors of law in arriving at its conclusions in that decision, it did not make any finding which differed from that which the Court of Appeal determined on that aspect of the appeal.
New evidence sought to be relied upon
- What I have said above in relation to the nature of the Appeal is determinative of the issue about whether the Applicant ought to be allowed to rely on new evidence in this Appeal; that is, upon evidence not relied upon before the Adjudicator.
- The foundation for the submission by the Applicant that this Appeal Tribunal should receive any further evidence which was not before the Adjudicator is not said to be founded upon what is said to be a discretion held by this Tribunal pursuant to s 28 of the QCAT Act.
- Much of what is in the submissions filed for the Applicant in support of that application deals with issues which go to the merits, or other issues which seem to have most to do with identifying why the Adjudicator ought to have arrived at different factual conclusions than were reached.
- The submissions obliquely touch on the issue of how, with reasonable diligence, the fresh evidence could not have been obtained by the Applicant to use in the original application before the Adjudicator, and how that adduced evidence must have an important impact on the outcome of the appeal. It is also directed to the credibility of that evidence. The evidence of course, were it to be admitted, has not been answered by any evidence which might be put forward to respond to it by any of the Respondents to this appeal.
- It follows that even were I persuaded, and I am not so persuaded, that with reasonable diligence this evidence could not have been obtained and put before the Adjudicator, it is not open to me to permit the evidence to be admitted, and I have no discretion of the kind that the Applicant contends that I have to allow it.
- I therefore dismiss the Application.
- Published Case Name:
Pead v Chambers & Anor
- Shortened Case Name:
Pead v Chambers
 QCATA 103
07 Jul 2020