Body Corporate for Bayview Shores v Bermingham [2012] QCATA 183

CITATION: Body Corporate for Bayview Shores v Bermingham and Anor [2012] QCATA 183 PARTIES: Body Corporate for Bayview Shores (Applicant/Appellant) v Elaine Bermingham Beverley Joan Hanford (Respondents) APPLICATION NUMBER: APL096-12 / APL107-12 MATTER TYPE: Appeals HEARING DATE: On the papers HEARD AT: Brisbane DECISION OF: Mr Charles Brabazon QC, Member DELIVERED ON: 17 September 2012 DELIVERED AT: Brisbane ORDERS MADE: 1. The appeal is dismissed. 2. The Adjudicator’s order of 9 February 2012 is confirmed. 3. Any submissions about costs are to be filed within 30 days of this judgment. CATCHWORDS: REAL PROPERTY – STRATA AND RELATED TITLES – MANAGEMENT AND CONTROL – BODY CORPORATE: POWERS, DUTIES AND LIABILITIES – where property owner sought reversion of contribution lot entitlements – whether decision of body corporate to revert lot entitlements amounted to adjustment order – whether grounds for appeal Acts Interpretation Act 1901, s 14B Body Corporate and Community Management Act 1997, s 378 Queensland Civil and Administrative Tribunal Act 2009, s 32 Hallden Pty Ltd & Ors v Body Corporate for LA Promenade [2012] QCAT 109 Pearce & Anor v Body Corporate for Riparian -- 1 of 6 -- 2 Plaza Apartments [2012] QCAT 072 Raby v B.C. for 1 Holman St [2011] QCAT 449 Shafston Towers [2011] QBCCMCmr 528 APPEARANCES and REPRESENTATION (if any): This matter was heard and determined on the papers pursuant to s 32 of the Queensland Civil and Administrative Tribunal Act 2009 („QCAT Act‟). REASONS FOR DECISION The issue [1] This is an appeal from the Adjudicator‟s order of 9 February 2012. It raises an issue which has caused considerable difficulty for owners of lots in buildings controlled by a Body Corporate. Is an order to adjust the contribution lot entitlements an “adjustment order”, according to the requirements of s 378 of the Body Corporate and Community Management Act 1997 („the Act‟)? [2] Miss Bermingham‟s lot 79 in “Bayview Shores” is the focus of a dispute. The former Commercial and Consumer Tribunal made an order on 17 April 2009, altering the contribution lot entitlements for lot 79. [3] Miss Bermingham now wants to “revert” to the previous position. On 7 October 2011, the Body Corporate agreed to this request, but only if the order of 17 April 2009 was deemed an “adjustment order”, according to s 378 of the Act. [4] The issue was considered at length by the Adjudicator. In a comprehensive and careful judgment, she found that the events of 17 April 2009 did not amount to an adjustment order. The result was that the decision of the Body Corporate Committee, to “revert” the lot entitlements, was not valid. So, it is now necessary to consider this appeal against that decision. The 17 April 2009 hearing [5] The CCT hearing was recorded. It was a telephone hook-up. The Member, Ms J Schafter, presided. Miss Bermingham, Mr Higgins and the chairman of the Body Corporate were on the line. The transcript is five pages long. [6] The key aspects of the hearing can be summarised this way:  The application for directions was listed because of proposed amendments to the schedule of contribution lot entitlements.  The application was made by Miss Birmingham. The chairman of the Body Corporate, Mr Higgins, had filed a report, containing proposed amendments to the schedule. -- 2 of 6 -- 3  Ms Schafter asked Miss Bermingham if she agreed with the adjustments in the Body Corporate‟s defence. If so, the Tribunal could make consent orders disposing of the application. If Miss Bermingham did not agree, there would have to be a formal hearing and evidence, with the parties present. Did Miss Bermingham agree with the Body Corporate‟s report?  Miss Bermingham expressed “total agreement” with the report.  Mr Higgins said the committee was “still content” with the adjustments, in the Body Corporate‟s defence.  Ms Schafer said: “… what we will do is order the contribution lot entitlement for the Body Corporate be adjusted in accordance with the schedule suggested by (the Body Corporate’s advisers)”.  After discussing some details in the order, Ms Schafer went on, “… the second order will simply be that the Body Corporate prepare and lodge for registration a new community management statement … that then finalises our role as the independent quasi-judicial Tribunal …”  Then followed some discussion about the delivery of the Tribunal‟s order. It was to be typed and posted to each party.  Ms Schafer finished the hearing, saying “… the application is now at an end.” [7] The formal order, signed by Ms Schafer and dated 17 April 2009 says: “upon hearing Miss Bermingham and Mr Higgins … the Tribunal makes the following orders by consent …” [8] The Body Corporate‟s solicitors, in letters dated 7 October and 8 December 2011, expressed the opinion that the order was “an adjustment order”, despite the fact that the order stated that it was made by consent. In their opinion, it actually was not made by consent. Therefore, the body corporate could reverse the contribution lot entitlements. The legislation [9] Section 378 of the Act defines an “adjustment order”: (a) Means an order of a court, tribunal or specialist adjudicator, made before the commencement providing for an adjustment of the contribution schedule for an existing scheme; but (b) Does not include an order of a court or tribunal giving effect to a decision that is not made by the court or tribunal or another court or tribunal (including a decision that is not, but is taken to have been, made by a court or tribunal). -- 3 of 6 -- 4 Examples for paragraph (b) –  An order of a court or tribunal giving effect to the terms of the settlement of a dispute between an owner of a lot included in an existing scheme and the body corporate, if the terms provide for the adjustment of the contribution schedule for the scheme.  A written agreement that: (a) Is between an owner of a lot included in an existing scheme and the body corporate; and (b) Provides for the adjustment of the contribution schedule for the scheme, and (c) Is filed in the registry of a court or tribunal and is enforceable as an order of the court or tribunal. [10] The example in (b) can be taken into account, in considering the proper meaning of the legislation.1 [11] Several decisions by QCAT members, or by adjudicators, show that the application of s 378(b) can be difficult and uncertain. A helpful and straightforward explanation is this: …the exception in the definition is, rather, intended to apply… where parties reach agreement before any determination is made by the Tribunal, and simply seek that the Tribunal makes an order giving effect to their agreement. That conclusion is supported by the two examples given for it.2 [12] Shafston Towers3 applies that approach, but reaches a different conclusion on the facts – the QCAT member considered the merits of the application, and gave a judgment about it. The member retained a discretion in making the order, stating: “the circumstances were more similar to the committee choosing not to actively defend the application than the body corporate consenting to the application”. [13] See the careful discussion in Pearce4 and the helpful, and concise, decision in Hallden5. In the latter case, the Body Corporate neither opposed or consented to the order. Therefore, the exception in s 378(b) did not apply, so the order was an adjustment order. [14] In this case, it can be seen that the order is not an adjustment order. The position is clear. Before the hearing, the parties apparently had different positions. At the hearing, Ms Birmingham expressed “total agreement” 1 Acts Interpretation Act 1901, s 14B. 2 Raby v B.C. for 1 Holman St [2011] QCAT 449, 26. 3 [2011] QBCCMCmr 528. 4 Pearce & Anor v Body Corporate for Riparian Plaza Apartments [2012] QCAT 072 at [43]-[46]. 5 Hallden Pty Ltd & Ors v Body Corporate for LA Promenade [2012] QCAT 109, by Dr John Forbes. -- 4 of 6 -- 5 with the Body Corporate‟s proposal. Ms Schafer had explained the difference between a consent order and a contested hearing. The “total agreement” meant that Ms Schafer did not consider the merits of the adjustment. She exercised no discretion or judgment. There was no mention of any lack of authority in Mr Higgins, to agree to the consent order. [15] The “decision” in s 378(b) really means an agreement – a mutual decision. If the agreement is in place before the Tribunal‟s order is made, that is enough. This is evident in the current matter. [16] The Body Corporate‟s solicitors had advised that it was not a consent order. However, that conclusion is not open on these facts. For example – when Mr Higgins said that the Body Corporate was “content” with the order, it was suggested that the Body Corporate was not really agreeing to the order. But such an expression is commonly used in the court room, and in everyday usage, as meaning an agreement. Bearing in mind that the proposed adjustment was put forward by the Body Corporate‟s own experts, Mr Higgins was clearly agreeing to its adoption. [17] The correct conclusion is seen in Mr Pointing‟s letter to the Adjudicator, dated 16 December 2011. [18] The Adjudicator‟s decision, that there was a genuine consent order following the agreement of the parties, was the correct one. The order of 17 April 2009 [19] There are some references in the papers to the extent of Mr Higgins authority, or lack of authority, to agree to the order made on 17 April 2009. It is mentioned briefly in the Body Corporate‟s submissions – see the fourth dot point, para 6(b), the conclusion. [20] It is mentioned at greater length in the committee‟s submission of 2 January 2012, (page 4) and in the Success Law letter of 7 October 2011, page 2, third dot point. [21] It is also mentioned by the adjudicator in her reasons – see paras 50-51. She said that consideration of such issues were beyond her authority. [22] The focus of the present submissions, and this judgment, is on the events of 17 April 2009. There is no submission that the order made by Ms Schafer is in some way invalid or should be overturned, because Mr Higgins lacked authority to agree to the order. Rather, as the Body Corporate‟s submissions say, “the basis of the appeal is, in essence, whether the order is an adjustment order and can be reversed.” [23] Miss Bermingham has made no submissions about such issues. Therefore, it is unnecessary and inappropriate for this judgment to consider any such hypothetical issues. Ms Hanford’s appeal -- 5 of 6 -- 6 [24] Ms Hanford has started separate proceedings, contesting the decision made by the Adjudicator. Grounds of appeal are attached to her application. Similar issues arise. It seems appropriate to combine the appeals, as the same reasons will apply. Orders [1] The appeal is dismissed. [2] The decision and orders made by the Adjudicator are confirmed. [3] Any submissions about costs must be filed within 30 days of the date of this judgment. -- 6 of 6 --