Body Corporate for No 9 Port Douglas Road v McEvoy
[2011] QCATA 292
•19 October 2011
| CITATION: | Body Corporate for No 9 Port Douglas Road v McEvoy [2011] QCATA 292 |
| PARTIES: | The Body Corporate for No 9 Port Douglas Road (Applicant) |
| v | |
| Michael McEvoy and Christine McEvoy (Respondent) |
APPLICATION NUMBER: APL199-11
| MATTER TYPE: | Appeals |
HEARING DATE: On the papers
HEARD AT: Brisbane
| DECISION OF: | Justice Alan Wilson, President Michelle Howard, Member |
DELIVERED ON: 19 October 2011
DELIVERED AT: Brisbane
ORDERS MADE: 1. That the time for the filing of an appeal against the decision of an adjudicator dated 22 March 2011 by The Body Corporate for No 9 Port Douglas Road be extended to 7 June 2011.
| CATCHWORDS: | BODY CORPORATE MANAGEMENT – EXTENSION OF TIME FOR FILING APPEAL – where Adjudicator has ordered registration of new Community Management Statement in favour of the Respondents – where period to appeal original decision has lapsed – where the Applicant seeks an extension of time to file an appeal against the original orders filed against it – whether the Tribunal could allow an extension of time for the Applicant to file it’s appeal – whether the Adjudicator had erred in coming to their decision – whether it is in the interests of justice to grant an extension of time Queensland Civil and Administrative Tribunal Act2009, ss 6, 61 ANI Corporation Limited v John Holland Constructions Pty Ltd [1989] QCA 099, cited Applicant VEAL of 2002 v Minister for Immigration & Multicultural Affairs (2005) 225 CLR 88, applied Burrell v Body Corporate for Boulevard North [2010] QDC 352, cited Greig v Stramit Corporation Pty Ltd [2004] 2 Qd R 17, cited Kostas v HIA Insurance Services Pty Ltd (2010) 241 CLR 390, applied Legal Services Commissioner v Bradshaw [2009] QCA 126, cited |
APPEARANCES and REPRESENTATION (if any):
This proceeding was heard on the papers in the absence of the parties pursuant to s 32(2) of the Queensland Civil and Administrative Tribunal Act 2009 (QCAT Act).
REASONS FOR DECISION
PRESIDENT:
I have had the benefit of reading the reasons of Member Howard, in draft. I agree with her reasons, and her conclusions, and the order she proposes.
MEMBER MICHELLE HOWARD:
On 22 March 2011, an Adjudicator determined an application of Michael and Christina McEvoy (the McEvoys) under the Body Corporate and Community Management Act 1997 (the BCCM Act). The Adjudicator ordered that the Body Corporate for No. 9 Port Douglas Road register a new Community Management Statement (CMS) recording that the proprietor of Lot 16 is entitled to exclusive use of the sun deck and common property area adjacent to Lot 16 and attach a plan identifying the exclusive use area. The McEvoys are the current owners of Lot 16.
Under s 290 of the BCCM Act, an appeal must be started within six weeks after the aggrieved person receives a copy of the order appealed. The Body Corporate acknowledges that it received the order on 22 March 2011, and that it did not start an appeal within the 6 week period. It appears that the appeal period expired on 4 May 2011. It filed an appeal in the Tribunal on 7 June 2011.
Also, on 7 June the McEvoys filed an application in the Magistrates Court seeking various orders relating to enforcing the Adjudicator’s decision, including that an administrator be appointed and authorised under the BCCM Act to perform the obligations of the Body Corporate under the Adjudicator’s orders.
The Body Corporate seeks an extension of the time allowed under the BCCM Act for the starting of an appeal against the Adjudicator’s decision, pursuant to s 61 of the Queensland Civil and Administrative Tribunal Act 2009 (the QCAT Act).
Directions were made for an application for the extension of time to be dealt with as a preliminary matter by written submissions on the papers and both parties were directed to file written submissions. These have been received. The Body Corporate also provided an affidavit from its secretary.
In essence, the Body Corporate submits that the interests of fairness and justice would be served by extending time if the proposed appeal has sufficient merit, broadly assessed, and the extension will not cause such prejudice to the McEvoys as would be unfair or unjust.
The McEvoys oppose the application, submitting that the Body Corporate committee members knew the time limits and indicated on 7 April that an appeal was intended but failed to act until the 60 days for the lodgement of the new CMS had expired.
When can a procedural time limit be extended?
Section 61 of the QCAT Act provides that the Tribunal may, among other things, extend procedural time limits fixed for the commencement of proceedings which are fixed under the QCAT Act or an enabling Act.[1]An extension may be given even if the time for complying with the relevant requirement has passed.[2] A time limit cannot be extended if to do so would cause prejudice or detriment not able to be remedied by an order for costs or damages.[3]
[1] Section 61(1).
[2] QCAT Act, s 61(2).
[3] QCAT Act, s 61(3).
An enabling Act is defined in s 6(2) as an Act, other than the QCAT Act, which confers jurisdiction on the Tribunal. The BCCM Act confers jurisdiction on the Tribunal in ch 6 pt 11 to determine appeals from an adjudicator’s orders on questions of law.
The time limit prescribed in s 290 of the BCCM Act is a procedural time limit. It is apparent, from s 61 of the QCAT Act, that the time limit may be extended. However, the Tribunal will only exercise the discretion to extend time in appropriate circumstances.
Courts have considered that exercising the discretion to extend time may be justified to avoid an injustice: the issue for determination is whether the interests of justice are served by granting or refusing the extension sought.[4] The discretion is unfettered, and can be exercised flexibly having regard to the circumstances of the particular case.[5] It is relevant to consider that upon expiration of the time allowed for appeal, the other party has a vested right to the judgment unless the discretion is exercised to extend time.[6] Other relevant considerations include the length of the delay and the reasons for it; the merits of the appeal and its prospect of success on appeal if leave is granted; and, the degree of prejudice to the other party if time is extended.[7]
Is it in the interests of justice to grant or refuse the application for extension of time?
[4]For example, see Legal Services Commissioner v Bradshaw [2009] QCA 126; Hughes v National Trustees, Executors and Agency Co of Australasia Ltd [1978] VR 257.
[5] Palata Investments Ltd v Burt & Sinfield Ltd [1985] 2 All ER 517.
[6]For example, see Hughes v National Trustees, Executors and Agency Co of Australasia Ltd [1978] VR 257; Norwich and Peterborough Building Society v Steed [1991] 2 All ER 880.
[7]For example, see Legal Services Commissioner v Bradshaw [2009] QCA 126; Greig v Stramit Corporation Pty Ltd [2004] 2 Qd R 17; ANI Corporation Limited v John Holland Constructions Pty Ltd [1989] QCA 099; Hughes v National Trustees, Executors and Agency Co of Australasia Ltd [1978] VR 257.
Prejudice to the McEvoys
Following expiry of the time allowed for appeal, the McEvoys have a vested right to the judgment unless the discretion is exercised to extend time. Although this is a relevant consideration, it will always be the case that one party has a vested right to a judgment unless leave is granted in any proceeding in which an extension of time is sought to appeal. The overriding consideration is what the interests of justice require.
The Body Corporate acknowledges potential detriment to the McEvoys if the appeal succeeds concerning the costs incurred in the enforcement proceedings brought in the Magistrates Court. However, it argues that because it has not sought a stay, the McEvoys may have taken enforcement action in any event, even if the appeal had been filed in time in which case there was no relevant detriment. It submits that if the Tribunal considered there was detriment, then it could be remedied by an order for costs, and if necessary, damages by way of costs thrown away, if any. It suggests that if the appeal is unsuccessful, there will be no detriment.
The McEvoys’ material does not address the issue of possible prejudice. However, they do make it clear in their submissions that they have pursued enforcement action in the Magistrates Court although the appeal of the Body Corporate was filed on the same day as their Magistrates Court proceedings. Their submissions assert that there has been non-cooperation of the Body Corporate with the administrator appointed in the Magistrates Court.
The McEvoys have therefore knowingly incurred additional costs since the filing by the Body Corporate of the application in this Tribunal, which they know may be thrown away in the event of a determination against their interests.
The initial costs incurred would have been limited and detriment to them mitigated by awaiting the outcome in these proceedings. In any event, detriment to them, if leave is granted, would be confined if the Body Corporate is successful on this preliminary issue and on the appeal to the costs of taking the action in the Magistrates to filing stage only, as later costs have been incurred at their risk given they were aware of these proceedings.
This detriment could be remedied by an order for damages.
Length of Delay and the Reasons for It
After the orders were made by the Adjudicator the Body Corporate initially made a misguided complaint to the Body Corporate Commissioner on 7 April 2011. It took legal advice on 19 April, after receiving the Commissioner’s response to its correspondence.
Apparently, counsel was briefed in the matter and the appeal documents were prepared by the lawyers by 13 May 2011 and a cheque requested to allow the appeal to be filed on that day. Finally, on 31 May 2011, the treasurer provided funds and the submission states that the appeal was filed on that day. In the file the appeal document, although signed on 31 May 2011, is date stamped as received by the Tribunal in the Mossman registry on 7 June.
The Body Corporate suggests that the real delay in the matter stems from the McEvoys, in their personal capacity and/or as directors of Famestock Pty Ltd, leaving the issue the subject of the adjudication unresolved from 1998 until late 2010.
The McEvoys submit that there was sufficient time for the appeal to be lodged, but the Body Corporate delayed. It suggests that the members of the Body Corporate are well-versed in body corporate law and should have known the time limits. They provided an email dated 7 April 2011 from Daniel Hart, the Body Corporate manager, informing Mr McEvoy of the Body Corporate’s intention to appeal the decision.
The delay in appealing is largely explained by the Body Corporate’s misdirected efforts in writing to the Commissioner. Once his response was received, legal advice was taken promptly but there was only a brief portion of the appeal period remaining. It is apparent that, by the date on which the appeal documents were prepared by the lawyers for the Body Corporate, the time for filing the appeal had expired. Some further delay of several weeks occurred before a cheque was provided by the Body Corporate: I do not consider this is significant given that the time for filing the appeal had already expired.
The Body Corporate did not sit idly during the appeal period. Its initial efforts were misguided, but when this became apparent to it, prompt action was taken to seek legal advice and have documents prepared. Unfortunately, the time period expired before this was done. The McEvoys concede that the Body Corporate manager alerted them to the intention of the Body Corporate to appeal.
The delay was short, and the McEvoys were on notice of the intention of the Body Corporate to appeal. In my view, the delay is not a factor which counts against the application if the interests of justice otherwise favour granting leave.
Merits of the Appeal
The Body Corporate submits that on appeal it would argue essentially that the Adjudicator erred in law because the decision was not founded on evidence supporting the decision; because there was no proper basis for granting the equitable relief of rectification; and by failing to afford natural justice to the interested parties, in particular that a copy of the statutory declaration of a Mr Loane was not provided to them.
No evidence of agreement
The Adjudicator’s decision which makes orders to effect rectification was based on acceptance, on the balance of probabilities, that it was the intention of the original owner and developer, Blue Raven Pty Ltd, of the scheme to grant exclusive use over the common property adjoining lot 16.
The Adjudicator had, among other documents, copies of some pages from a contract dated 13 May 1998 for the sale from Blue Raven to Famestock Pty Ltd, of which the McEvoys were directors at the time. A hand-written but un-initialled amendment to the description of the property sold refers to exclusive use ‘of adjacent roof area’. A statutory declaration from the director of the company which developed and sold the units, Mr Loane, was provided by the McEvoys in which he asserts that he agreed to grant Famestock exclusive use of the area concerned.
A copy of a letter from Blue Raven to Complete Body Corporate Services dated 24 September 1998 was provided which stated:
We hereby advise that Exclusive Use is hereby granted to Famestock Pty Ltd [the proprietor of lot 16] for the sun-deck and common area outside and attached to this unit.
Although the letter is said to attach a copy of a plan highlighting the area, the copy with the file does not do so.
The Adjudicator also had, as provided by the McEvoys, an unregistered CMS dated 18 January 1999 which provides for the proprietor of unit 16 to have exclusive use of the sun-deck and common areas ‘outside and attached to his unit’ 16 as identified on the attached plan marked C, which was submitted to the Department of Natural Resources, but ultimately not registered it seems due to non-compliance with requisitions regarding a plan acceptable to the Registrar.
Contradictory copies of Voting Papers and Minutes for a meeting held on 12 January 2009 were provided to the Adjudicator. The Voting Paper suggests that a motion to grant exclusive use was not included, whereas minutes provided record that exclusive use was granted. A Voting Paper said to date to 2005 records a Motion proposed by the owner of Lot 16 to empower the Body Corporate to open discussions with the owner of Lot 16 or other potential buyers for the ‘vacant rooftop area’ for the purchase of it.
With documents provided by the McEvoys to the Commissioner in November 2010, which were not disclosed or provided to the lot owners or the Body Corporate, a plan had been attached to Request to Register and Record a new CMS dated 18 January 1999, dealing number 703121428. It is attached to correspondence from Mr McEvoy stating that he was unsure that he had previously sent all pages including the ‘Plan marked C’.
On the copy of ‘Plan C’, an area is shaded in orange with a highlighter. It is not obvious that, or how, any particular area might have been identified on the original document. Whereas other pages of the same document were provided with the application, a copy of this plan was not attached to it.
The Adjudicator referred to various owners’ evidence and submissions which contradicted the McEvoys’ case. In particular the decision refers to submissions of the owner of lots 6 and 11 submitted, amongst other things, that in about 2007/2008 a roof was constructed over the subject area and there was discussion about making it into a recreation area. He asserts that, inconsistently with the claims made in the application before the Adjudicator, about that time, Mr McEvoy made enquiries about purchasing the area.
The owners of lots 4 and 10 asserted that they were present at relevant Body Corporate meetings at which the McEvoys claim a grant of exclusive use was made to them and deny that this was the case. The owners of lots 1 and 12 asserted that the documentation provided by the McEvoys appears to be incomplete and potentially misleading, including handwritten and un-initialled changes to the contract to purchase lot 16. The owner of lot 17 submitted that the sun-deck and common areas outside and attached to unit 16 may refer to the trafficable and tiled area immediately to the front of lot 16 which is depicted currently as within its boundary.
The Adjudicator noted the controversy about the authenticity of the contract and the unregistered CMS provided by the McEvoys and was not satisfied that a resolution was passed without dissent to grant exclusive use. He was persuaded, however, that on the balance of probabilities it was the intention of the original owner (that is, Blue Raven) to grant exclusive use over the area in dispute, but the new CMS recording this was not registered within the required time frame.
The Body Corporate submits that there was no evidence that could support the conclusion that it was the intention of the original owner to grant exclusive use over the common property adjacent to lot 16. It argues that there would need to be some certainty as to the terms of a contract. In particular, it argues that before such an agreement could be found to exist, there would need to be documents including some form of words, diagrams and plans which identified the area and the agreement about it. In the absence of the anything identifying the area, it argues, objectively, that there cannot have been agreement. The Adjudicator, it submits, failed to identify any such information. Therefore, it argues, finding that there was an agreement to do so, was an error of law.
The McEvoys’ submissions are, with respect, difficult to follow. Significant portions of the submissions are irrelevant to the issues for consideration. They appear to contend that the Applicant has not submitted any real evidence to support their case generally and it seems in relation to this particular issue. They attach to their submission some additional copies of documents which they rely upon showing that there was a plan submitted.
The documents provided with their submissions include: another copy of letters dated 24 September 1998 from Blue Raven Pty Ltd to Complete Body Corporate Services, a letter dated 5 October 1998 from Complete Body Corporate Services to Blue Rave [sic] Pty Ltd, and another copy of Plan C, without any highlighted areas. It is not apparent which of the documents provided is said to have originally attached the Plan provided.
On the basis of the documents in the Adjudicator’s file, it is not apparent to me that the copies of pages of the contract referring to the exclusive use area specify or identify the area other than to refer the words used referring to it as the area as the ‘adjacent roof area’. If a plan was attached to the contract which identified the area referred to, it is not referred to it on those pages of the contract provided. The other documents provided are contradictory and in any event, none of them form part of the contract for sale of unit 16. It seems apparent that the developer did not take steps at the time of the contract in May 1998 to provide for exclusive use of the area if he was still in a position to do so at that time, although belatedly in September sought to raise the issue with the Body Corporate manager.
Without deciding the issue, the Body Corporate’s submission that the evidence of any agreement is too uncertain to support a finding that the original owner intended to grant exclusive use appears to raise an arguable case that the Adjudicator has made an error of law. Further, the Adjudicator’s apparent conclusion that the original owner’s intention was somehow recorded in the new CMS which ultimately was not registered appears to involve an error. The evidence does not suggest that the original owner did or could embody his intentions in the new CMS. It was at that stage a matter for the lot owners to vote upon. Having reached this conclusion, I do not need to consider the inconsistencies in the evidence about what happened from that point on.
Although it was not before the Adjudicator, I am comforted in reaching this conclusion by the correspondence dated 5 October 1998 from Complete Body Corporate Services provided by the McEvoys with their submissions in response to this preliminary application, which specifically advises Blue Raven that the grant can only be made at a properly convened meeting of the body corporate.
No Basis for Rectification
As discussed above, the order made by the Adjudicator was intended to effect a rectification to reflect the intention of the original owner to grant exclusive use over the common property adjacent to lot 16. The Adjudicator held that ‘due to errors made at that time, a new Community Management Statement recording the grant of exclusive use was not registered within the prescribed timeframes’.
The Body Corporate submits that an adjudicator must show that there is a proper basis for an order for rectification: Burrell v Body Corporate for Boulevard North.[8]It argues that the doctrine of rectification may have application if the Adjudicator intended to convey that his investigations revealed that the Body Corporate and the McEvoys predecessor in title, that is, Famestock, had agreed to register a CMS recording exclusive use since rectification involves that events occurred which do not reflect the agreement. However, the Body Corporate observes that the Adjudicator was not satisfied that the necessary resolution had been passed.
[8] [2010] QDC 352, [40].
Further, it says, that lodgement of the CMS was not up to the developer, but the Body Corporate from time to time. Therefore, it submits there was no basis in law or equity on the facts as found by the Adjudicator, to make orders for a change to the CMS. Any rights that Famestock had, it argues, are in contract against Blue Raven.
Also, it submits that in any event, the equitable doctrine of laches or estoppel by acquiescence would disentitle a grant of the relief allowed by the Adjudicator. In particular, the delay by Famestock and the McEvoys in taking action would not allow them to succeed. Also, equity would not allow them to alter the position taken by them in the past that the area was available for their acquisition and the Body Corporate had incurred significant expenditure on the basis that the area was not an exclusive use area.
Whether a decision is based on findings of fact which are open on the available evidence is a question of law.[9]
[9] Kostas v HIA Insurance Services Pty Ltd (2010) 241 CLR 390, 396.
In my view the Body Corporate’s submissions assert an arguable case that the Adjudicator made an error of law. It is clear that the Adjudicator did not accept that the Body Corporate resolved by way of resolution without dissent, to grant exclusive use of the area in question to the owners of lot 16. There, the Adjudicator’s decision relies upon a finding of the intention of Blue Raven to grant exclusive use, to find that ‘due to errors made at that time, a new Community Management Statement recording the grant of exclusive use was not registered within the prescribed time frame’. Prima facie, it appears that the decision about whether to grant exclusive use was not a decision for Blue Raven at the relevant time.
Denial of Natural Justice
Further, the Body Corporate complains that the submissions made by persons who are members of the Body Corporate were not made with the benefit of the declaration made by Mr Loane. In particular, it appears to argue that the documents submitted with the application were listed within it; there was no notice that other evidence had been supplied to the Adjudicator; the right to inspect submissions is available to the Body Corporate under the BCCM Act s 244(2) and (3), but not the objectors or submitters; there is a material difference between a case based on sworn evidence deposing to the background and one based on a letter which incompletely sets out an alleged contract; if the submitters had seen Mr Loane’s declaration, they would have given evidence that he was not the sole director; both directors had been jailed for offences of dishonesty; and the McEvoys had a longstanding friendly relationship with Mr Loane. This evidence, the Body Corporate argues, may have resulted in the Adjudicator having more regard to the evidence of the homeowners which was contrary to the evidence of the McEvoys and Mr Loane.
Regarding the alleged denial of procedural fairness, ch 6 div 2 sub-div 2 of the BCCM Act is relevant. Notice of an adjudication application is required to be given to persons including the body corporate. The body corporate must give a copy of the original notice and the application to each owner of a lot included in the scheme: s 243(4).
Section 246 provides that that the Commissioner must, on application of an interested person, allow the person to inspect the application, submissions about it, and the applicant’s reply to the submissions or provide the person with copies of the documents upon payment of the fee. An interested person includes the body corporate or a member of its committee or a person who has made a submission on the application: s 246(3).
The Commissioner’s file reveals that correspondence was forwarded to the Body Corporate requesting distribution of documents including the notice of application and invitation to make a submission and the adjudication application and attachments to all owners of lots included in the scheme. The notice of the application and the invitation to make a submission does not alert the Body Corporate or the lot owners to their entitlement to inspect and obtain copies of documents under s 246.
The Commissioner’s file does not disclose any means by which the Body Corporate or the lot owners were alerted or could have become aware of the substantial volume of material provided in support of the application following the submissions made by various lot owners. Natural justice requires that a person whose interests may be affected have the opportunity to respond to allegations made which are adverse, relevant and credible.[10]
[10]Kioa v West (1985) 159 CLR 550, 629; Applicant Veal of 2002 v Minister for Immigration & Multicultural Affairs (2005) 225 CLR 88.
The material provided by Mr Loane in particular appears to have been given significant weight by the Adjudicator. It was not disclosed to the lot owners or Body Corporate. This would appear to support the Body Corporate’s argument that there has been a denial of natural justice.
Conclusion
The submissions of the Body Corporate identify several possible errors of law in the Adjudicator’s decision. The McEvoys are able to be compensated adequately for any detriment to them. Any prejudice to them because they would otherwise have a vested right to the judgment is outweighed by the interests of justice in this proceeding. In all the circumstances, I consider that it is in the interests of justice to extend time for the filing of the appeal until the date of filing, namely 7 June 2011. I would make orders accordingly.
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