BODY CORPORATE UNPAID LEVIES – THE CONCILIATION PROCESS

An owner recently lodged an Application to the Commissioner, disputing the amount owing in Body Corporate Unpaid Levies and recovery costs. The matter was referred to a Conciliation Hearing but the end result left the owner and the Body Corporate back at square one.

Background

The owner has Body Corporate Unpaid Levies plus recovery costs amounting to over $3000.00. They cited various reasons why the amount has not been paid. However, the Body Corporate Committee believe that the entire debt should be paid in full and commenced recovery action about six months ago.
In the meantime, the owner, through her Real Estate Agent, lodged an Application with the Commissioner disputing the amount owing.
It is unlikely that the owner would have been aware that the Application had virtually no chance of getting a ruling unless she paid the entire amount owing. Had she done that, then she could have sought adjudication on the debt including recovery costs.
The fact is that the Commissioner has no jurisdiction to make a ruling where Body Corporate Unpaid Levies are still owing. The matter could only proceed to Conciliation where the facilitator could try and broker some sort of agreement between the parties but there is no obligation on either side to agree on anything.
In this case, the parties simply agreed that the owner would make a formal offer to the Body Corporate. The Application was then closed without any further action.
The Body Corporate was not obliged to accept the offer. They were only required to consider it and respond accordingly. Following the conciliation, an offer was made and subsequently rejected.
The overall process took over three months to reach its conclusion. The Committee members were forced to spend their own time in participating when there was never really any chance of resolving the matter.
In the meantime, the Body Corporate Unpaid Levies plus interest and costs increased and the owner was no better off apart from receiving some advice, which could be construed as legal advice, from the facilitator.

The Next Step

The Body Corporate now has no option but to proceed with legal action. The Facilitator seemed keen to push the Body Corporate towards referring the matter to QCAT for resolution but legal advice has indicated that they would be better off going through the courts.
The costs of the legal action will be significant and the owner will have to either pay the amount in full or get her own legal representation which will only add to the costs.
The lesson from this exercise is that owners should pay their levies on time. If, for some reason, they miss payments and are charged interest and even recovery costs, then they should pay the full amount and then refer the matter to the Commissioner who has the jurisdiction to decide on whether the additional costs are justified.
If you do not pay the outstanding amount you are setting yourself up for a potentially escalating amount in recovery costs and legal fees.
Watch this space for future developments.

Body Corporate Dispute withdrawn 4 months after ruling

The Commissioner for Body Corporate recently ruled that an owner was able to withdraw a Body Corporate Dispute Application - four months after a ruling had been made!


The Application was originally ruled on in August 2013 but the Commissioner for Body Corporate, Robert Walker, decided that the entire Adjudication was a nullity due to distribution procedures not being correctly carried out. Some owners did not receive copies of the original Application 0394-2013 (See my article on the Commissioners ruling).

 Suggestions have been made that the Commissioner exceeded his authority in quashing the ruling, considering that there was only very debatable support for his actions from the Act. However, the Commissioner decided to reopen the Body Corporate Dispute Application from the start and seek input from all owners.

Bearing in mind that the Body Corporate had already acted on the orders that were made, the Applicant saw little point in reopening the matter and having another ruling made.

As a result the Applicant advised the Commissioner that she wanted to withdraw the Body Corporate Dispute Application albeit that a ruling had been made four months earlier.

The Commissioner confirmed that the Application had been withdrawn on 16th Dec. Despite this, the original orders in Application Number 0394-2013 remain published on the Government website (as at the date of publication of this article) for all to see with no mention of the more recent developments.
The Commissioner stated that he relied on Section 254 (4) in allowing the Applicant to withdraw the Application. That section states: "The Application may be withdrawn by the Applicant at any time before it is disposed of under this Chapter".

Well, despite the fact that Mr Walker feels that the original adjudication was a nullity, it still remains as a published record. The only place you can find details of what transpired after the Adjudication is right here on www.BodyCorporateNews.com I wonder if there are any other similar instances where the Commissioner may have intervened in an Adjudication.

My feeling is that whilst Mr Walker may feel that there were valid grounds for ruling the original Adjudication a nullity, he did not have the authority to overturn the decision. In my opinion that should have been dealt with by an appeal to QCat.

 As to the "procedural irregularities" where copies of the application were not properly distributed, it should be entirely the responsibility of the Office of the Commissioner for Body Corporate to verify correct distribution. The policy of asking a Body Corporate representative to confirm that every owner has received copies of an Application is probably designed to save the Commissioner's Office money but is no guarantee that all owners see the Application.

I wonder if there have been distribution irregularities in any other Body Corporate Dispute Applications. Maybe there are other Adjudications that could be ruled a nullity. I'm guessing that there would be many applicants who would like to withdraw their Application after an Order has been made. Is there a time limit in addressing this? Not according to anything used by the Commissioner in making his ruling. 

Watch this space for more Body Corporate News.

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The opinions expressed in this article are personal commentaries and not intended in to be legal advice in any way. I have spent many years participating on a number of different Body Corporate Committees and provide an owner’s perspective on Body Corporate issues. For more visit my AboutMe page If you have any concerns or comments about any of the issues that are raised in these articles please use the form below to contact me.

COMMISSIONER FOR BODY CORPORATE OVERTURNS ADJUDICATORS DECISION

The Commissioner for Body Corporate, Robert Walker, has made an extraordinary decision in quashing orders made by an Adjudicator nearly four months ago.


On August 7th 2013, Mr Peter Dowling, made orders in Application Number 0394-2013
This Application was the subject of an article on this website a few months ago. The Applicant advised the Commissioners office prior to the ruling that copies of the dispute had not been circulated to owners. She thought she was doing the right thing in providing the Commissioner's office with a "heads up".

It now seems that four months after the orders have been made, the Commissioner has decided to quash Mr Dowlings orders and reopen the Application from the beginning.

On 2nd Dec, the Commissioner for Body Corporate wrote to the Applicant stating that "distribution requirements" were not met as required by Section 243 of the Act.

He then went on to say that it "appears" that the orders of 7th August 2013 are a nullity with no legal effect. He quotes the case of Minister for Immigration and Multi Cultural Affairs v. Bhardwaj (2002) to support his claim that the orders are a nullity.

Despite the fact that it just "appears" that  the orders are a nullity, he has decided to reopen the Application and invite submissions from all owners. The Commissioner's Office has circulated copies of the Application directly to owners rather than get someone else to do it (eg The Secretary or Body Corporate Manager.)

He has given owners until 20th Dec to lodge their submissions.

I have my doubts as to whether the Commissioner for Body Corporate actually has the authority to overturn or quash an Adjudicator's decision. I can understand why people might think that Mr Walker has exceeded his authority.

The Commissioner for Body Corporate may well have a reasonable argument but I think that the Applicant correctly points out that she cannot accept that the orders are a nullity unless she sees a court order proving that.

The cover sheet of the orders very clearly state that an appeal should be made through QCAT within 60 days. Surely Mr Walker could have referred the matter to QCAT or a court to decide on whether the order should stand or not.

This does seem to make a complete mockery of the Adjudication system. The fact is that the Body Corporate in question has already acted on the orders months ago and owners are now confused and shocked to see the dispute reopened.

I have been advised that Mr Walker addressed a meeting this year stating that it would be inappropriate for him to interfere with an adjudication in any way. Well, he certainly seems to have done an about face on that.

Her position is that the original orders stand until the Commissioner can prove that he has the authority to reopen the Application.

The Clayton's Body Corporate Dispute - owners kept in the dark!

In a recent Body Corporate Dispute owners were never provided with copies of the Application. Consequently, orders were made without a single submission from any owner.

The Applicant in Body Corporate Dispute Number 0394-2013 (yet to be published), contacted me to express her concern.

The Commissioner had asked that the Application be circulated to all owners but the person they asked to do this was the subject of part of the dispute.

The fact that there were no responses or submissions should have at least raised questions about whether owners had actually seen the Application.

In fact, the Applicant phoned the Commissioner's Office to alert them of the problem.
The Applicant told me "When I contacted the Commissioner's Office to let them know that owners had not received copies of the dispute, they said that they take the word of the person they sent them to. If he says he has sent them then that is good enough."

The Applicant went on to say "The Commissioner's Office said that I should provide stat decs to prove that owners did not receive the dispute. I did not feel that it was my responsibility to do the work of the Commissioner so left it up to them to decide whether to pursue the matter or not."

The Adjudicator ruled on the Application in due course. "The orders were basically what I had sought but I did think it was strange that an Application like this could be lodged and ruled upon without owners knowing about it. I'm sure that they would have made submissions had they known."

When the orders were made, it was the Applicant who actually distributed copies to owners.
This does raise some questions about the procedures of the Commissioner. Not all Bodies Corporate employ a Body Corporate Manager. I don't think it is good enough that they send a hard copy to someone who they think might be responsible and then expect that person to distribute copies to owners.

When the Applicant in this Body Corporate Dispute took the trouble to phone the Commissioners office to alert them to the problem the Commissioner's staff should have taken the time to verify the claim rather than expect the Applicant to do the work.

Footnote: The reference to the "Claytons Body Corporate Dispute" comes from a very popular advertising campaign. In the 1970s a company produced a non alcoholic drink that was marketed as a good alternative to drinking alcohol. The brand name was Claytons and the slogan "Claytons - the drink you have when you are not having a drink!" In this case, the Dispute you have when you are not having a Dispute!

Body Corporate Disputes – frivolous vexatious misconceived or without substance.

Adjudicators in Body Corporate Disputes can consider awarding costs against the applicant when those disputes are considered frivolous vexatious misconceived or without substance.

This doesn't happen very often but I received an email at Body Corporate News suggesting that some Body Corporate Managers and legal advisors have been ponting out the very real possibility of an award for costs against the Applicant to discourage owners from lodging disputes.

The process for lodging disputes is time consuming and can be fairly complex. Although the Dispute Resolution is designed to allow people without legal representation to make an application to the Commissioner, the applicant still needs to ensure that the arguments being put forward are in accordance with the Act.

When the respondent is the Body Corporate, there are many examples where their responses are written by solicitors.

It is interesting that in recent cases, Adjudicators have addressed the matter of whether to award costs against the Applicant based on whether a Body Corporate Dispute is considered to be frivolous vexatious misconceived or without substance. One consideration appears to be whether the Applicant has a history of lodging disputes and having them dismissed.

The problem with the system is that many owners in Body Corporate Communities have little understanding of the Act or legal processes. When they face an issue with their Body Corporate, they often find the prospect of lodging a dispute too daunting and end up putting up with problems.

Prior to lodging Body Corporate Disputes, the Applicant should make every effort to communicate with the Body Corporate preferably in writing, detailing their concerns. The Dispute application should be a last resort when the respondent fails to adequately address the applicants concerns.

I would also highly recommend that anyone considering lodging a Body Corporate Dispute should first contact the Commissioner for Body Corporate help line 1800 060 119.

The advisors are knowledgable and they can point out relevant sections of the Act that may help in an Application. They might also be able to give an indication of whether a potential dispute application has merit.

Another thing to consider is that there appears to be a growing trend towards cutting Committee's some slack. There have been rulings that indicate that Committee's cannot be expected to be word perfect in the Act.

In summary, my recommendation to anyone considering lodging a Dispute would be:

1. Do everything possible to resolve the dispute prior to lodging an application. Try and put everything in writing and keep a record of responses.
2. Use the Commissioners help line as much as possible prior to lodging an Application.
3. Ensure that any Application that is made is supported by relevant sections of the Act.
4. Be aware of section 242 of the Act which specifies time limits in lodging disputes.

My feeling is that Adjudicators will be asked by respondents to rule that Body Corporate Disputes are frivolous, vexatious, misconceived or without substance. The penalty can be up to $2000.00 so it is well worth doing as much research as possible prior to lodging an application.