Exit Distraction Free Reading Mode
- Unreported Judgment
Walden v Broadwater Tower Body Corporate QCATA 28
Walden v Broadwater Tower Body Corporate  QCATA 28
Jonathan Nigel Walden
Broadwater Tower Body Corporate
5 February 2015
23 February 2015
APPEALS – Body Corporate and Community Management – whether the application was made within the statutory time limit – whether the body corporate has adopted a proper sinking fund budget – whether separate bank accounts be established for the administrative fund and the sinking fund – whether order be made limiting payments from funds with appropriate invoices or receipts – whether application properly dismissed as vexatious, misconceived and without substance – whether costs should be awarded.
Body Corporate and Community Management Act 1997 (Qld) ss 227, 242, 269, 270, 289(2)
Jonathan Nigel Walden appeared in person
No appearance by the respondent
REASONS FOR DECISION
- Mr Walden is the owner of a lot in Broadwater Towers CTS 9041. Concerned that decisions made by the body corporate, the body corporate committee and the body corporate manager, did not comply with legislation or promote the long term viability of the building, he applied to the Body Corporate and Community Management Commission seeking a list of nine outcomes. In response to that application the adjudicator made orders on 23 June 2014.
- This application, filed on 11 August 2014, is an appeal against those orders. It is brought under the provisions of the Body Corporate and Community Management Act 1997 (Qld) (the Act). The appeal is restricted to a question of law.
- In his application to the Commissioner Mr Walden sought the following outcomes:
- That the sinking fund budget for the 2013-2014 financial year be declared void.
- That the body corporate operate separate bank accounts for the administrative and sinking funds.
- That moneys only be paid from the administrative and sinking funds with appropriate invoices or receipts.
- That the administrative and sinking funds do not comply with section 146 of the Standard Module, the body corporate take all reasonable steps to remove Challenge Strata Management (CSM) as body corporate manager, the executive members of the committee and the following members of the committee: Mr Gross, Ms Newbury, Mr Sawyer, Mr Cozens and Mr Sparkes.
- That the body corporate take all reasonable steps to seek reimbursement for any negligence by CSM and ensure any appropriate penalties are enforced if CSM has not complied with section 146(5) to (8) of the Standard Module.
- That the executive members of the committee and the following members of the committee: Mr Gross, Ms Newbury, Mr Sawyer, Mr Cozens and Mr Sparkes be dismissed.
- That Gavin Frederic be appointed administrator to administer the affairs of the body corporate.
- That CSM be dismissed as body corporate manager.
- That any general meeting motion to refurbish lobbies and/or foyer be deferred until 60 days after a new sinking fund budget is passed in general meeting and accepted by the commissioner or an independent administrator as complying with sections 139 and 141 of the Standard Module.
- The adjudicator made the following Orders:
- I hereby order that the outcome sought to void the 2013-2014 sinking fund budget is dismissed.
- I further order that the eight other outcomes sought are dismissed on the ground the application is vexatious, misconceived and without substance within the meaning of section 270(1)(c) of the Body Corporate and Community Management Act 1997.
- I further order that within one month of the date of this order, Jonathan Walden, the owner of Lot 41 must pay the body corporate for Broadwater Tower CTS 9041 $1,515.44 to compensate the body corporate for loss resulting from the application.
- In his written application to this Tribunal Mr Walden described his grounds of appeal as:
‘Dispute Applicant has been denied natural justice. The dispute has not been investigated by BCCM and decisions made are such which any other person of integrity and knowledge could not make given the evidence. ‘
He sought the following orders:
‘That the Dispute decisions be overturned and the Dispute returned to the Commissioner of BCCM with appropriate directions for review.
Alternatively that the Tribunal make decisions as considered appropriate on the Appeal submission(s).
Alternatively that the findings if (sic) the Tribunal be forwarded to another appropriate forum for review and possible action.’
- Mr Walden indicated he was only appealing the decision as it related to outcomes 1, 2 and 3 and the payment of costs. In his written submissions Mr Walden said he was abandoning his claims for the other outcomes because a recent annual general meeting changed the membership of the body corporate committee and the body corporate manager which meant the outcomes requested were no longer necessary.
Investigating the Application
- The adjudicator, after stating the jurisdiction was informal and low cost, formed the view that having obtained the minutes of the AGM of 27 September 2013 and considered the submissions made it was not necessary to conduct further investigations before deciding the application. Submissions were received from Mr Walden, eighteen owners, the committee and the body corporate manager.
- Mr Walden said that the adjudicator, by emphasising the responsibility to do things as cheaply as possible, failed to meet the obligations imposed by the Act to observe natural justice and act with a fair and proper consideration. He says he has been denied natural justice because it can’t be done if doing things cheaply is the major priority and this is an error of law.
- Further, he argues that the decisions made by the adjudicator are contrary to the evidence, such that no reasonable person could have arrived at those decisions.
- Section 269 says
- (1)The adjudicator must investigate the application to decide whether it would be appropriate to make on order on the application.
This section does not impose an obligation to investigate the activities the subject of the application, it may be enough to consider the application itself. For example if an adjudicator decides an application is not a ‘dispute’ or if it raises issues between parties other than the parties provided for in s 227 there would be no need to investigate the substance of the dispute further because the application would fall outside the jurisdiction granted to the Commission by the Act.
- The obligation to investigate the application must be considered in the light of the legislation as a whole. In the case of K.G. Tully & Anor. v. The Proprietors The Nelson Body Corporate Robin J. commented;
‘it is for the adjudicator to determine what ought to be done by way of investigations and there is no error of law by an adjudicator who determines that the evidence available is insufficient to justify a necessary conclusion and does not actively seek further evidence to support the application.’
- Mr Walden asked for further investigations but he did not identify which specific further investigations were necessary. He did not identify independent expert evidence which contradicted the expert evidence on the file. In these circumstances I can discern no error of law in the decision of the adjudicator to not seek further evidence and to determine the application on the information available
Sinking Fund Budget
- The application to the Commissioner relating to the sinking fund budget was an application seeking to void a body corporate resolution. It was brought six months after the relevant meeting and was therefore out of time. The adjudicator correctly identified and discussed the four elements to be considered when determining whether compliance with the statutory time limit should be waived. However the adjudicator failed to decide if a waiver should be granted, and proceeded to determine the application on its merits. This is an error of law.
- Had the waiver question been determined the adjudicator would have either found that the waiver should not have been granted, which would have dismissed this outcome without further consideration, or found that it should have been granted and proceeded on, which is in fact what occurred. In these circumstances it cannot be said Mr Walden has suffered an injustice as a result of this error. Not every error of law will result in a decision being set aside on appeal. The error must be such as to vitiate the decision. This error is not sufficient to grant the appeal in relation to outcome 1.
- Mr Walden argues the committee relied on the forecast prepared by Seymour and Associates and the process used to determine the sinking fund budget was flawed. It focussed of the money coming into the fund by looking at the past year contribution, increasing it by 4% and then working out what work could be done. He says the budget should look at the work that will need to be done in the future, to calculate the proportional reserve and then issue a levy that will provide for that amount. He says the sinking fund must ensure current owners pay their proportional share for future maintenance.
- He referred to various entries in the budget and argued that because items such as Fire Safety and many other things did not have a cost allocated the budget was in breach of the Act. Furthermore he argues the current amount in the sinking fund does not comply with legislative requirements. He says this issue has been around for four years and nothing has been done about it.
- The adjudicator acknowledged the concerns raised by Mr Walden, and agreed there appears to be a lack of disclosure about the basis of the calculations. The adjudicator emphasised the need for the committee to provide owners with the methodology used when preparing the budget and the budget forecast. The factual issues raised would have been relevant if the application sought clarification of, or an adjustment to, the budget.
- However Mr Walden applied to have the budget declared void. He has not pointed to an error of law made by the adjudicator in determining hat question. The adjudicator found Mr Walden had not provided sufficient independent material to cast doubt on the Seymour Consultants forecast dated 17 July 2013 or establish that it was wrong for the body corporate to rely on the forecast. As a result Mr Walden had failed to establish that all, or a significant proportion of the budget did not comply with section 139(3)(a) of the Standard Module.
- Better Homes Queensland Pty Limited v O'Reilly & Anor  QCATA at paragraph 34.
- This was a conclusion that was open to the adjudicator on the evidence available. I can find no error of law on the part of the adjudicator.
The body corporate bank account
- Mr Walden requested an order that the body corporate operate two separate bank accounts, one for the administrative fund and one for the sinking fund. He says that this would ensure there was no inadvertent or deliberate breach of the Act resulting from the use of sinking fund money if money was drawn from the account for administrative purposes when in fact the administrative fund did not have the funds available.
- Mr Walden said funds have in fact been drawn for administrative purposes when there was not sufficient money in the administrative component of the account to meet the drawing, resulting in a breach of the Act. He says the body corporate manager has not brought this circumstance to the attention of the auditor. As a result he says it was the responsibility of the adjudicator to make the order requested to prevent this failure to comply with the legislation from reoccurring.
- The adjudicator found there was no jurisdiction to make the order sought because Mr Walden had not identified a dispute. Section 227 of the Act defines a ‘dispute’ as a dispute between two nominated parties. Mr Walden, as an owner, is entitled to bring a dispute against another owner - s 227(a) or the body corporate - s 227(b). There is no definition of the word ‘dispute’ so it must be given its normal meaning. A dispute does not arise until an issue has been raised by an initiating party with another party and they have failed to reach a common agreement. In this case it would be necessary for Mr Walden to have the request considered and rejected by the body corporate at a general meeting to meet the requirements of a dispute under s 227(1)(b) before the dispute resolution provisions of the Act can be invoked. There is no evidence this has occurred.
- I can find no error of law in the adjudicator’s decision.
Payment of moneys from the funds
- Mr Walden sought an order ‘that moneys only be paid from the administrative and sinking funds with appropriate invoices or receipts’. He explained while he understood this was already a legislative requirement that did not help with the enforcement. He said there would be no disputes if everything was done according to the Act but it is not and the order is necessary so a breach of the order can be enforced in the Magistrates Court. He further argues that if the order was provided it would be an incentive for people to abide by the regulations otherwise the Commission is effectively condoning wrong doing.
- The adjudicator says Section 146(8) of the Standard Module provides for payments on receipt of written evidence of the debt and Mr Walden seeks an order restating this provision.
- Once again, this would appear to be a request for an order at large that does not relate to a specific dispute. Mr Walden does speak about the difficulties involved in getting access to receipts but the order he seeks is not an appropriate way to pursue that end. There is no purpose in making an order that restates a legislative obligation.
- I find no error of law in the decision of the adjudicator.
- Mr Walden has indicated he is not appealing the decision in relation to these outcomes. However they form part of the decision on appeal and I have carefully considered the reasons of the adjudicator in relation to these outcomes. They are part of the order which dismisses ‘the other eight outcomes’ on the grounds they are vexatious, misconceived and with out substance within the meaning of s 270(1)(c). They are also part of the basis of the order that costs be awarded under s 270(3)(a).
- It should be noted that while the adjudicator has ordered ‘the other eight outcomes’ (other than outcome one) dismissed under s 270 (1)(c), in the reasons the adjudicator appears to restrict this ruling to outcomes second to fifth and ninth. The adjudicator then continues on to say for outcome seven there was no ground for the appointment of an administrator, and Mr Walden could not seek outcomes six or eight. These reasons, taken together with the reasons given previously support the order that outcomes two to nine be dismissed under s 270 (1)(c).
- Mr Walden has not identified, and I have not found, an error of law in the adjudicator dismissing outcomes 4-9.
Imposition of costs
- It is clear from Mr Walden’s written and oral submissions that he is experiencing a high level of frustration with his position as one lot owner in a community title scheme. He has identified practices he considers have the potential to result in future damage to the building and its finances. In some instances other owners support him in his views. He believes he is striving to protect the interests of aged owners who are unable to protect themselves. His many approaches to the Commission have resulted in what he believes to be a denial of natural justice because the Commission has failed to fully investigate his complaints.
- It is expected that members of a body corporate will manage their own affairs. This will of course result in some owners disagreeing with the decisions made by the body corporate by way of a vote in which all owners are entitled to participate. The legislation provides a dispute resolution mechanism for owners but it should only be accessed once an attempt has been made to resolve the dispute with the body corporate. The dispute resolution mechanism does not provide for a dispute between an owner and the body corporate committee or an owner and the body corporate manager.
- Mr Walden made an application for outcomes outside the scope of the legislation without giving consideration to its threshold requirements, such as the parties to the dispute. He has attempted to achieve outcomes without following prescribed process, for example seeking the appointment of an administrator. He has argued his strongly held views without providing necessary supportive independent expert evidence.
- Under these circumstances it was open to the adjudicator on the evidence to make an order under s 270(1)(c).
- Further the adjudicator ordered the payment of the costs of the body corporate under s 270 (3). In making this order the adjudicator may have regard to previous applications made by the applicant. The adjudicator referred to six previous applications which appear to have been conducted in a similar manner to the present application. On many occasions Mr Walden was advised about the requirements of conducting an application however does he not seem to have taken heed of this advice.
- Repeated applications that do not respect the requirements of the legislation impose a cost burden on the body corporate and it is proper for those costs to be recovered. Evidence was submitted of costs of $1,515.44 incurred in distributing the application to owners and $1,650 in administration costs of the committee’s submission, a total of $3,165.44. In this case the award of $1,515.44 appears reasonable.
- Mr Walden has not identified, and I have not found, an error of law in the decision of the adjudicator to impose costs.
- Mr Walden’s appeal is dismissed.
 Body Corporate and Community Management Act 1997 (Qld) s 289(2).
 Adjudicator’s decision at paragraph 4.
 Body Corporate and Community Management Act 1997 (Qld) s 269(3).
  QDC 031 at paragraph 11.
 Body Corporate and Community Management Act 1997 (Qld) s 242(1)(b) and (4)(b).
 Decision of Adjudicator Broadwater Tower  QBCCMCmr 227 at paragraphs 8-11.
 Better Homes Queensland Pty Limited v O'Reilly & Anor  QCATA at paragraph 34.
 Adjudicator’s decision paragraph 15.
 Body Corporate and Community Management Act 1997 (Qld) s 238.
 Adjudicator’s decision paragraph 51.
 Adjudicator’s decision paragraphs 36-39.
 Body Corporate and Community Management Act 1997 (Qld) s 4(a).
 Body Corporate and Community Management Act 1997 (Qld) s 227(1).
- Published Case Name:
Walden v Broadwater Tower Body Corporate
- Shortened Case Name:
Walden v Broadwater Tower Body Corporate
 QCATA 28
23 Feb 2015