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 Levy increase Magic Mountain owner loses appeal to QCAT

The implications of The Body Corporate and Community Management Amendment Bill 2012, which was passed on March 19th 2013, have started to affect many owners who now face a significant Body Corporate Levy increase.

Owners have had to cope with the changes to legislation and various QCAT challenges over the last 10 years leaving many confused and upset over Body Corporate Levy increases that they cannot afford.

When the recent legislation was passed, some angry owners vowed to fight Body Corporate Levy increases with legal challenges.

It is important to note that the new legislation is not automatically applied. There is a process that owners must follow to ensure that changes to the Lot Entitlements are implemented. The first step is for an owner to ask the Body Corporate Committee to revert the levies in accordance with the legislation.

Some owners have already commenced the process. In one case, former 60 Minutes reporter, Ian Leslie successfully applied to have the levies at Magic Mountain Two reverted in accordance with the new legislation. Although this was a formality, many owners were obviously upset that they faced a Body Corporate Levy increase.

Mr Phillip Williams, another owner at Magic Mountain, challenged the reversion in an application to QCAT. (An interesting aside is that the QCAT judgment refers to the applicant as Phillip Williams in one reference and Paul Williams in another - probably an unfortunate error but it should be corrected!).

In the QCAT decision, Dr J.R.Forbes commented:
"Naturally, the applicant strongly opposes the effective reversal of the restoration of pre-July 2003 contributions that he secured in 2012. Plainly he regards the recently amended law as arbitrary and unfair. No doubt other unit holders felt the same when the former section 379 enabled one owner (perhaps among hundreds) to upset the existing scale of contributions. But these considerations do not entitle the Tribunal to disregard the present law."

The Application from Mr Williams was dismissed and the comments that were made suggested that the Application had little merit...
"The Tribunal has no jurisdiction to entertain the application for leave to appeal filed on 15 May 2013. Furthermore, the Tribunal has no jurisdiction to give advisory opinions or answer hypothetical questions, or to substitute its own policies for those of the legislature, or to anticipate changes that may or may not be made to the Act "later this year"."
"The applicant's case is not advanced by such extravagant rhetoric as "indefensible hypocrisy", "a conflicted ambiguous Act", "Iegislative thuggery" or vague and misconceived allusions to fair trading laws. I note that the Body Corporate does not press for costs on this occasion, but that is a future possibility that the applicant could usefully bear in mind."

There are indeed many owners who are horrified at the Body Corporate Levy increase while a smaller percentage of owners are delighted at the decrease in their levies.

Owners who are aggrieved at the changes to the legislation need to understand that the changes are now Law irrespective of how unfair they are perceived to be. Any challenge in regards to the levies must be in accordance with the Law and on very specific and limited grounds.

However, one owner pointed out that when he purchased his apartment the contract specified the Lot Entitlements. He feels that the new Law has not considered that original contracts may be breached by changing the Lot Entitlements.  Although he does raise an interesting point, I doubt that anyone would be able to use that to challenge the change in the Law.

Those who feel that the levies should revert to the original levies that were set by the Developers would be better off directing their feelings to the Queensland Government rather than QCAT.

There are probably more than enough owners who have been adversly affected by the new legislation and the Body Corporate Levy increase to have a real influence on the Goverment but they will not get anywhere unless they voice their opinions in large numbers.

Full and accurate minutes of Meetings? Don’t worry about it.

The BCCM Act requires that full and accurate minutes be kept of Body Corporate meetings. However, an Adjudicator has cast some doubt on the definition of the words full and accurate minutes in a recent decision.

In Coomera on the Park [2013] QBCCMCmr 204 (14 May 2013), the Adjudicator ordered that the Application be dismissed. In Point 1 of the Outcomes Sought the Applicant had asked:
“That all committee meetings as well as AGM meetings held by the committee be recorded to ensure that the final minutes actually reflect the decisions and points made by committee members...”
To the layman, it follows that by dismissing the Application, the Adjudicator appears to be saying that there is no need to “ensure that the final minutes actually reflect the decisions and points made by committee members”.

From the Adjudicator’s comments, it appears that the minutes of one of the meetings in question were certainly short on substance.

He quotes a couple of examples:
“There are a number of instances where “...” appear.
Item q) “Pest control quotations for Common Property” is followed by “????”.
“BUILDING AND GROUNDS MAINTENANCE AND CARETAKER’S REPORT” is similarly followed by “????”.”
Although the Adjudicator states that “I would encourage the minute taker to refrain from using “...”, he goes on to say “they are not inaccurate in any significant way in the areas they are required to be accurate by the legislation.”

He points out that, in the legislation, full and accurate means minutes including each of the following:
(a) the date, time and place of the meeting;
(b) the names of persons present and details of the capacity in which they attended the meeting;
(c) details of proxies tabled;
(d) for each motion voted on at the meeting—
(i) the words of the motion; and
(ii) the number of votes for and against the motion;
(e) details of correspondence, reports, notices or other documents tabled;
(f) the time the meeting closed;
(g) details of the next scheduled meeting;
(h) the secretary’s name and contact address.

I disagree with the Adjudicator's comments in this case. He appears to be saying that the minutes only need to include points a – h to be considered accurate. I feel that he is misinterpreting the definition of the word “including” as in “minutes including each of the following”. My reading of this is that the phrase means that the minutes should include all of those points from a – h but “including” does not mean that the minutes should include ONLY those points.

The definition of include means "Comprise or contain as part of a whole". In other words Full and Accurate minutes should certainly include points a – h, but that is just a part of what forms an accurate representation of what was determined at the meeting. To suggest otherwise is just playing with semantics.

In this case, the Applicant also wanted to be able to voice record the meetings. He raised the fact that threats had been made at the meetings but that there was no record of that in the minutes. The Adjudicator also dismissed that part of the Application and suggested that he could take his own notes of the meeting but that would not be of much help if they differed significantly from the “official” minutes.

I am not aware of any legislation that prevents anyone from making a personal record a meeting albeit that the recording may not be able to be used for any purpose.

In looking at the Dispute in its entirety, it seems to me that the Applicant in this case was not being unreasonable in asking that “full and accurate” minutes be taken for all meetings. I think that it is a pity that his Application was not upheld, at least in part. The penalty to the Body Corporate would have been minimal and an order might have ensured that future communication was improved.
I feel that this ruling gives Committees the opportunity to keep minutes to the absolute minimum as long as they include points a – h.

Despte that, an honest Committee will always try to keep owners informed by providing full and accurate minutes. Part of that role is to ensure the minutes of all meetings that are sent to owners are accurate and detailed to the point where nothing can be considered to be hidden.
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The opinions expressed in this blog are personal and not intended in to be advice in any way. I have spent many years participating on a number of different Body Corporate Committees. I am a dealer in Vintage Movie Memorabilia specialising in original movie posters and movie art. www.moviemem.com

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.

New Ways for Body Corporate Managers to make money

Body Corporate Managers are always looking for new ways to make money. In recent years many have started offering additional services to clients but there is growing concern that the promotion of some of these services may constitute a conflict of interest.

In an ideal world, Bodies Corporate should take steps to ensure that they are compliant with all legislation and general rules and regulations. Some Body Corporate Managers have seized the opportunity to exploit this and make money.

The way it works is quite simple. They point out to Committees that  that the Body Corporate needs to get reports on various areas of compliance. They often give veiled threats of potential liability or Committee responsibilities if the reports are not obtained.

They then recommend their own in house services to provide the reports which can include things like:

• Sinking Fund Forecasts
• Workplace Health and Safety Reports
• Fire Risk assessment reports
• Asbestos reports
• Insurance assessments

and many more.

They don't stop there. They also provide services to "assist" owners with Dispute resolution, Levy Equalisation claims and one BC Manager even has a separate department that completes insurance claims at an additional cost of course.

There are often times when BC Managers do everything they can to promote these offshoot services in an attempt to generate more income for themselves. However, the problem that I have with all of this is that I don't see them always offering alternatives.

In one case, the Chairman of a Body Corporate was convinced that he needed to get three reports done urgently on Fire Safety, Workplace Health and Safety and an Asbestos assessment. He was pressured into thinking that he might even be liable if the reports were not done.

The Body Corporate Manager then proceeded to convince him that he should use the services of companies that were subsidiaries of the BC Manager. No alternatives were offerred.

When the reports were completed, they highlighted various issues that needed to be addressed and they offerred yet more "in house" services to rectify the faults.

It is inevitable that Body Corporate Managers will be creative in developing other services for their clients but they need to be very careful indeed to offer alternatives rather than try and convince Committees to go with their own offshoot companies.

An example of the potential problems that can occurr was highlighted in the comments of a QCAT adjudication  .....

“The adoption of the practice of body corporate managers purporting to act both as “experts” and “representatives” in the same case is not one which should be encouraged.”
This case referred to a claim to equalise the levies. The Body Corporate Manager offerred the services of one of their own consultants to represent the Body Corporate.

There is nothing wrong with Body Corporate Managers developing their business and providing additional services to their clients providing that they act ethically and offer alternatives to Committees.
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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.
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.

Adjudicator Decides! ONE CENT UNDERPAYMENT OF Body Corporate LEVIES

Natalie Green unwittingly paid her levies one cent short. As a result, she was denied voting rights at an EGM. A dispute was lodged and an Adjudicator was required to rule on a one cent underpayment of Body Corporate levies.

Yes, it is hard to believe but I suppose that rules are rules. In his findings the BCCM Adjudicator, D.Toohey stated "It seems harsh for someone to be deprived of their vote just because they unwittingly underpaid their levies by a tiny amount. However, there is no discretion for a returning officer or an adjudicator to allow a vote to be counted when a body corporate debt is owing." (see decision here)

Well, I guess that must be right. The Act has to be followed to the letter of the law. The Adjudicator's hands are tied. After all the law is the law and there cannot be any flexibility.

But wait!

Wasn't there a ruling recently that dealt with how the Act should be interpreted? I'm sure I heard something about that. Ah yes, the QCAT decision in the appeal of Application Number APL 157-12 (29th January 2013).

Dr J.R.Forbes said that the Act could be taken "liberally" which means that the Act should not be taken "strictly". In other words, some flexibility should be shown.

He states that “if the legislation were at all times and in all circumstances applied with utmost rigour and most precious attention to detail, its objects and policy would be retarded by endemic disputation, rather than advanced.”

You really could be excused for thinking that D.Toohey, in ruling on this dispute has applied "utmost rigour and most precious attention to detail".  All over a One Cent underpayment of Body Corporate levies!

Well, I guess the Adjudicators will attempt to rationalise all of this. I know all of the arguments that they will use (like whether there was a material loss or gain at stake) but the fact is that one ruling says that the Act should be interpreted liberally while another says that it must be followed to the letter of the law.

Ultimately, I would actually prefer to see that the Act is interpreted to the letter of the Law. That way, everyone knows where they stand.

If you think this is an isolated case of a seemingly contradictory ruling then I'm afraid you are mistaken. I will look at more contradictions in Adjudicator's rulings in future articles.

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.

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.

Body Corporate Levies Merry Go Round

First published Dec 6, 2012

I see that the Queensland Parliament Legal Affairs and Community Safety Committee has recommended yet another major change in the way that Body Corporate levies are set. The Body Corporate Levies Merry go Round continues. 

Rather than go into great detail about how these changes may be achieved, let me sum up the situation as it has unfolded over the years.

Traditionally, the developer has set the levies for Body Corporate buildings. The levies were often based and calculated on factors like floor space and the value of the units.

It is important to understand that owners were aware of the levies at the time of purchase and it follows that they accepted them to be fair and reasonable. After all, if they thought the levies were unfair why would they go ahead and make the purchase?