Busby v Body Corporate for Balmattum [2014] QCATA 156

CITATION: Busby v Body Corporate for Balmattum [2014] QCATA 156 PARTIES: Phillip Norman Busby Jennifer Lynne Busby (Applicants/Appellants) v Body Corporate for Balmattum CTS 25383 (Respondent) APPLICATION NUMBER: APL550-13 MATTER TYPE: Appeals HEARING DATE: 25 June 2014 HEARD AT: Brisbane DECISION OF: Senior Member Stilgoe, OAM DELIVERED ON: 30 June 2014 DELIVERED AT: Brisbane ORDERS MADE: 1. The application for an extension of time for the filing of an application to appeal is refused. 2. The appeal is dismissed. CATCHWORDS: APPEAL – BODIES CORPORATE – where applicants challenged the validity of an EGM – adjudicator dismissed application – where application to appeal filed 2 years late – whether grounds to extend time for filing appeal Queensland Civil and Administrative Tribunal Act 2009 (Qld) s 61 Body Corporate and Community Management Act 1997 (Qld) ss 242, 290 Kostas v H.I.A. Insurance Services Pty Limited (2010) 241 CLR 390 Clarke v Japan Machines (Australia) Pty Ltd [1984] 1 Qd R 404 The Body Corporate for No 9 Port Douglas Road v McEvoy [2011] QCATA 292 -- 1 of 7 -- 2 APPEARANCES and REPRESENTATION (if any): APPLICANTS: P O Land instructed by Lee & Co RESPONDENT: D Morzone QC instructed by Preston law REASONS FOR DECISION [1] Mr and Mrs Busby live in a seven lot rural residential development 130 km from Cairns. The development has a body corporate, the Body Corporate for Balmattum CTS 25383. [2] Mr and Mrs Busby were the first of the owners to build on their lot under a community management statement which strictly regulated the type of building, the time frame for building and the materials that could be used in the building. [3] The owners of other lots did not, in Mr and Mrs Busby’s view, comply with the strict building requirements. The Busbys complained to the body corporate, which took no action. [4] All owners received notice of an Extraordinary General Meeting to be held on 27 August 2010. The purpose of the EGM was to consider a motion to register a new, less restrictive, community management statement. The motion was carried at an adjourned EGM on 3 September 2010. [5] Mr and Mrs Busby wanted to challenge the new CMS. They lodged an application for adjudication by letter of 6 July 2011. The application sought a declaration that the motion of 3 September 2010, approving the new CMS was invalid and, therefore, the new CMS was invalid. They wanted an order compelling the body corporate to process their complaint about breaches of the original CMS. They wanted the committee members of the time to bear the expenses of the EGM. [6] The Adjudicator published a decision on 19 September 2011 dismissing the Busby’s claim. Mr and Mrs Busby received a copy of that decision on 25 September 2011. [7] Section 290(1) of the Body Corporate and Community Management Act 1997 (Qld) states that an appeal must be started within six weeks of an aggrieved person receiving a copy of the order appealed against. The Busbys should have filed any application to appeal the Adjudicator’s decision by 6 November 2011. In fact, they filed their application on 16 December 2013, over two years later. On 9 January 2014, the Busbys filed an application for an extension of time in which to file their application to appeal. -- 2 of 7 -- 3 [8] The tribunal has expressed the view that s 61 of the Queensland Civil and Administrative Tribunal Act 2009 (Qld) permits it to extend the time for filing an application for appeal under the BCCM Act1. [9] Mr and Mrs Busby, through their counsel Mr Land, submit that I should exercise my discretion to grant an extension of time. They say the appeal is based on an error of law. They say that there is an explanation for the delay. They say they have arguable prospects of success on appeal. They say that the body corporate and its members will not suffer any prejudice. Is there an error of law? [10] Mr Land submitted that the Adjudicator erred in law because he did not decide matters that were necessary steps in coming to his decision. I accept that proposition that an inadequacy in a decision maker’s path of reasoning can be an error of law2. I also accept that, if the Adjudicator did not take those steps, even if those matters were not drawn to his attention, there is an error of law. [11] However, for the reasons that follow, whether or not the Adjudicator fell into such error is not relevant to my decision. The length of the delay and reasons for it [12] The Adjudicator’s decision had this notation on the front page: An appeal must be filed with QCAT within 6 weeks after the date of the order; however, QCAT may allow an appeal to be commenced at a later time on application by a prospective appellant. [13] Mr and Mrs Busby assumed the effect of this notice was that time was not critical and, by implication, the tribunal would deal with any appeal when Mr and Mrs Busby were ready. [14] Otherwise, Mr and Mrs Busby advanced only one explanation for their delay from November 2011 to July 2013, although that explanation had many parts. [15] The Busbys had not paid body corporate levies since 2002. On 6 October 2010, in the Innisfail Magistrates Court, the Body Corporate obtained summary judgment against the Busbys for those unpaid levies plus penalty interest plus costs. From October 2011 to now, the Busbys have been defending an increasingly complex action to overturn the summary judgment and then defend their failure to pay body corporate levies (“the levy litigation”). Mr Land submitted that they were “caught up” in the levy litigation. [16] I do not agree. Contrary to Mr Land’s submission that the Busbys were fully engaged from early November 2011 to December 2013, the 1 See The Body Corporate for No 9 Port Douglas Road v McEvoy [2011] QCATA 292. 2 Kostas v H.I.A. Insurance Services Pty Limited (2010) 241 CLR 390. -- 3 of 7 -- 4 chronology of events demonstrates that there were periods during the levy litigation where nothing was required of Mr and Mrs Busby except to wait. They could have turned their attention to an appeal against the Adjudicator’s decision while they waited, but they did not. [17] Mr Land also submitted that the Busbys always intended to appeal. It is obvious from the chronology that the lawyers for both parties were in regular contact throughout 2011 and 2012 but there is not one letter from that period in which the Busbys communicated that intention. [18] Mr Busby wrote to the Body Corporate on 28 May 20133. He did not mention his intention to appeal the Adjudicator’s decision. If the Busbys did, in fact, always intend to appeal, I would expect at least some evidence of that intention by this date. [19] The first and only evidence that they communicated this intention to the Body Corporate is a letter dated 8 July 20134 from the Busby’s lawyers to the Body Corporate’s lawyer. In that letter, the Busbys lawyers expressly refer to the need to extend time for the filing of the appeal and they ask the Body Corporate not to oppose that application. [20] And yet, there was no application to extend time until, on 18 December 2013, the tribunal directed that the Busbys file and serve an application to extend time. [21] Mr Land submits that the letter of 8 July 2013, giving notice of the appeal, is a reason to extend time. That might have been true if the Busbys had acted promptly. A further delay of almost six months is not prompt action. [22] The Busbys explain the delay from July to December 2013 by the complexity of the appeal and the material filed in support of the appeal. Mr Busby has filed a large and comprehensive affidavit. Most of it is historical material that was already to hand. Mr Busby had to place it within the context of the dispute but I am not persuaded that exercise should have taken months. [23] As Mr Morzone pointed out, the distraction of that litigation might be an explanation for the delay, but it is not a reason. As Mr Land conceded, a delay of over two years is considerable. If the Busbys had been engaged in separate litigation with different parties involving a different dispute, I could accept that their attention was diverted by being fully engaged in the litigation. Mr Busby states5 that the reason they did not pay the levies was because the body corporate was not enforcing the CMS requirements. The levy litigation was simply another facet of an ongoing and bitter dispute between the Busbys and the body corporate. 3 PNB 28 to the affidavit of Phillip Norman Busby sworn 11 December 2013. 4 Ibid PNB 50. 5 Ibid at [16] to [18]. -- 4 of 7 -- 5 Prejudice to the respondents [24] The Busbys submit that there is no prejudice to the respondents in extending the time for appeal. They say that, there has been little, if any building work in the intervening time. They say that, if time is extended, the appeal is successful and the original CMS is reinstated, they will give lot owners a further nine months to comply with the original by laws before seeking to the enforce them. They have given an undertaking as to costs. [25] The owners of lots 1 and 5 filed affidavits about prejudice. They have not complied strictly with the time limits for construction in the original CMS. The owner of lot 1 has incorporate dongas into the house structure, which is arguably contrary to both the original CMS and the new CMS. There is no suggestion in the Busbys material that they would insist on the removal of any structure on those lots. Equally, though, they have not said that the will not insist on the removal of the dongas. [26] There is also some potential for prejudice if a new owner of any lot who, seeing the original CMS, was not inclined to grant the extensions or indulgences the Busbys now offer. Likelihood of success on appeal [27] Grounds 1 to 9 of the application to appeal relate to a purported committee resolution passed outside a committee meeting on 22 July 2010. [28] There were submissions to me about whether or not an invalid committee resolution could form the basis for a motion at an EGM. The Busbys submitted that the Adjudicator’s failure to consider this issue is an error of law. The Body Corporate submitted that how the motion gets to an EGM is not the relevant question; the relevant question is whether the EGM process was valid. [29] I took care to set out in these reasons the grounds of the Busbys’ application to the Adjudicator. The Adjudicator was asked to rule on the validity of the EGM resolution. He was not asked to rule on the validity of a resolution outside committee. The Busbys referred the Adjudicator to the absence of a committee resolution6 but they did not assert that the motion presented to the EGM was, on that basis, invalid. It is difficult to see how the Adjudicator could have erred at law on a question that was not before him. [30] The success of the Busby’s appeal also depends, to an extent, on this tribunal accepting fresh evidence. The appeals tribunal will only accept fresh evidence if it was not reasonably available at the time the proceeding was heard and determined. Ordinarily, an applicant for leave to adduce such evidence must satisfy three tests. Could the Busbys have obtained the evidence with reasonable diligence for use at the trial? 6 PNB 48, page 7. -- 5 of 7 -- 6 If allowed, would the evidence probably have an important impact on the result of the case? Is the evidence credible?7 [31] The fresh evidence relates to matters that occurred in, or existed as at, 2010. It was within the personal knowledge of the Busbys. They have not explained why this evidence was not available to the Adjudicator. I should not, therefore, assume that this evidence is available to show the Busbys have reasonable prospects on appeal. [32] There is, however, a more compelling reason why the Busbys do not have reasonable prospects on appeal. Section 242 of the BCCM Act states that an application for adjudication must be made within 3 months after the meeting at which the offending motion passed. The EGM occurred on 7 September 2010. The Busbys’ application was made on 12 July 2011. The Adjudicator was precluded from dealing with the application out of time unless he could establish good reasons for doing so. The Adjudicator was not persuaded that there were good reasons. [33] The Busbys did not challenge the Adjudicator’s decision not to extend time. Even if the Adjudicator erred in his consideration of the EGM, the Busbys cannot overcome this fatal flaw in their application to appeal. The Busbys have no prospects of success on appeal. Interests of justice [34] The Busbys submit that the interests of justice favour an extension of time because the committee acted without power, committee members acted in concert to defeat the effects of a valid community management statement and the Busbys’ complaints about non-compliance were ignored. [35] The interests of justice do not favour the Busbys. They have not paid any body corporate levies since 2002. A simple dispute over $20,000 is now being litigated in the Supreme Court. Because they were unfinancial, they could not have voted at the EGM. They filed their application for adjudication seven months late. They filed their application for leave to appeal two years late. They have refused mediation. They are the authors of their own predicament. Conclusion [36] I accept that the Busbys have raised issues that involve questions of law. I accept that the respondents will not suffer any significant prejudice if I grant an extension of time. [37] I do not accept that the Busbys have provided a reasonable explanation for their considerable delay. I do not accept that they have reasonable prospects on appeal. I do not accept that the interests of justice require an extension of time for the filing of the application to appeal. 7 Clarke v Japan Machines (Australia) Pty Ltd [1984] 1 Qd R 404 at 408. -- 6 of 7 -- 7 [38] The application to extend time for the filing of the application to appeal is refused. -- 7 of 7 --