Body Corporate for Palm Springs Residences CTS 29467 v J Patterson Holdings Pty Ltd
[2008] QDC 300
•18 December 2008
DISTRICT COURT OF QUEENSLAND
CITATION:
Body Corporate for Palm Springs Residences CTS 29467 v J Patterson Holdings Pty Ltd [2008] QDC 300
PARTIES:
BODY CORPORATE FOR PALM SPRINGS RESIDENCES CTS 29467
Appellant
AND
J PATTERSON HOLDINGS PTY LTD
Respondent
FILE NO/S:
Appeal 3134/07
DIVISION:
PROCEEDING:
Appeal
ORIGINATING COURT:
District Court, Brisbane
DELIVERED ON:
18 December 2008
DELIVERED AT:
Brisbane
HEARING DATE:
10 July 2008
JUDGE:
McGill DCJ
ORDER:
1.Appeal allowed.
2.Orders of the adjudicator of 23 June 2007 set aside.
3.Through the Commissioner, refer the matter back to an adjudicator, other than the adjudicator who made the orders of 23 June 2007, to resolve the dispute according to law.
4.Order that the respondent pay the appellant’s costs of and incidental to the appeal to be assessed.
5.Order that the costs of the adjudication which produced the orders which have been set aside abide the final outcome of the adjudication.
CATCHWORDS:
HOME AND COMMERCIAL UNITS – Body Corporate – General Meeting – notice of meeting – material circulated by committee in support of motion – whether sufficient as notice – whether breach of fiduciary duty.
HOME AND COMMERCIAL UNITS – Management agreements – termination – requirements for – dispute over.
HOME AND COMMERCIAL UNITS – Adjudication – obligation to give reasons – whether reasons adequate.
HOME AND COMMERCIAL UNITS – Adjudication – scope of jurisdiction of adjudicator – whether equitable relief or relief on equitable grounds available,
Body Corporate and Community Management Act 1997 ss 227, 274(2)(b)(i), 276(1).
Body Corporate and Community Management (Accommodation Module) Regulation 1997 s 40C.
Bancorp Investments Ltd v Primac Holdings Ltd (1984) 9 ACLR 263 – cited.
Bawden v ACI Operations Pty Ltd [2003] QCA 293 – cited.
Bulfin v Bebarfald’s Ltd (1938) 38 SR (NSW) 423 – considered.
Campbell v Australia Mutual Provident Society (1908) 24 TLR 623 – applied.
Carruth v Imperial Chemical Industries Ltd [1937] AC 707 – cited.
Cominos v Cominos (1972) 127 CLR 588 – cited.
Cypressvale Pty Ltd v Retail Shop Leases Tribunal [1996] 2 Qd R 462- applied.
Devereaux Holdings Pty Ltd v Pelsart Resources NL (No. 2) (1985) 9 ACLR 956 – cited.
Dindas v Body Corporate for One Park Road CTS 2114 [2006] QDC 302 – followed.
Fraser v NRMA Holdings Ltd (1995) 55 FCR 452 – applied.
Fraser v NRMA Holdings Ltd (1994) 52 FCR 1 – applied.
Hablethwaite v Andrijevic [2005] QCA 336 – considered.
Houghton v Immer (No. 155) Pty Ltd (1997) 44 NSWLR 46 – considered.
Re Mathieson, ex parte Herman (No. 1) [1961] NSWLR 1139 – cited.
McColl v Body Corporate for Lake View Park CTS 20751 [2004] QCA 44 – applied.
Peters’ American Delicacy Co Ltd v Heath (1939) 61 CLR 457 – applied.
Qantas Airways Ltd v Gubbins (1992) 28 NSWLR 26 – applied.
Ryan v Edna May Junction Gold Mining Co (1916) 21 CLR 487 – applied.
Suncorp Insurance and Finance v Hill [1998] QCA 112 – cited.
Talga Ltd v MBC International Ltd (1976) 133 CLR 622 – cited.COUNSEL:
SL Moody for the appellant
DA Savage SC for the respondent
SOLICITORS:
Herd Law for the appellant
Hickey Lawyers for the respondent
This is an appeal from a decision of an adjudicator under the Body Corporate and Community Management Act 1997 (“the Act”) made on 23 June 2007, by which he ordered that a resolution purportedly passed at an extraordinary general meeting of the appellant body corporate was invalid, and that the purported termination of a caretaking agreement was also invalid. Certain consequential orders were made. By s 289(2) of the Act, a person aggrieved by a decision of an adjudicator may appeal to this Court but only on a question of law. The appeal was not started within the time limit specified in s 290(2), but that subsection permits the court to allow the appeal to be started at a later date, and on 12 November 2007 I made an order allowing the appeal to be started by 31 October 2007, when the notice of appeal was filed. The powers on appeal are set out in s 294 of the Act.
Background
The appellant entered into an agreement described as a caretaking agreement dated 6 September 2001 with a company, AJA 2000 Pty Ltd, described in the agreement as “the manager”.[1] The agreement provided for the appointment of the company as caretaker of the building for a term of five years, although the company also had four option periods each of which was for five years. The agreement therefore potentially runs for a very long time. It sets out the various duties of the manager, and provides for remuneration calculated in accordance with the agreement to be paid each year in 12 monthly instalments. At some point the rights of that company under the agreement came to be transferred to the respondent. The material before me, as far as I can see, does not indicate when that occurred.
[1]Both sides put a copy of the agreement before me. Otherwise the background facts were generally taken from the reasons of the adjudicator.
It appears that for some time the body corporate has been attempting to terminate the caretaking agreement, and that some of the owners of lots in the scheme are unhappy with the respondent. Under Clause 8.1.2 of the agreement it may be terminated by the body corporate by notice in writing “if the manager shall neglect to carry [out] its duty pursuant to this agreement and shall not have taken all reasonable steps to remedy such neglect within a period of 14 days after notice in writing shall have been given to the manager specifying the duty which the manager has neglected to carry out.” The body corporate gave notice in writing dated 20 December 2006 to the respondent specifying 17 matters in respect of which it was alleged that the respondent had neglected to carry out its duty pursuant to the agreement. By a letter dated 19 February 2007 from the appellant’s solicitors, the appellant purported to terminate the agreement pursuant to Clause 8.1.
The respondent disputes that the letter was valid to terminate the agreement. If the matter were simply one of contract, that would depend on whether the respondent had neglected to carry out its duty pursuant to the agreement in one or more of the ways specified in the notice, and had not taken all reasonable steps to remedy such neglect within a period of 14 days after that notice was given to it. If those matters had occurred, then the appellant had a right to terminate the agreement, and the purported termination was effective.[2] If the matter were subject to dispute, a court or other body having appropriate jurisdiction could determine as a question of fact whether the circumstances had arisen so that the notice was validly given.
[2]Cheshire and Fifoot’s Law of Contract, 9th Aus. Ed. 2008 paras 21.2-21.7. I am assuming there was no concurrent right to terminate in law, eg for repudiation.
Because the matter arises in respect of a caretaking agreement under the Act, the situation is rather more complicated than this, because the Act and the regulation under it[3] contain mechanisms designed to make it difficult for a body corporate to terminate an agreement of this nature.[4] Although as a general proposition the committee for the body corporate decides things for the body corporate, that does not apply to a decision that under the regulation is a decision on a restricted issue for the committee: s 100. It was common ground before me that the termination of the agreement was a matter which was not within the power of the committee, and that under the regulation this requires a decision by the members of the body corporate in general meeting, by ordinary resolution. No doubt because of this, an extraordinary general meeting was held on 11 February 2007.[5]
[3]The Body Corporate and Community Management (Accommodation Module) Regulation 1997 (“the regulation”). I have been working from Reprint 3D.
[4]This is because property developers who set up these schemes want to be able to sell the management rights for large sums of money, so the rights that are conferred by the body corporate while it is still under the developer’s control have to be reasonably secure, otherwise prospective managers will not be willing to pay so much for them.
[5]Notice of the meeting was dated 15 January 2007: see copy attached to the submissions sent with the respondent’s dispute resolution application. Presumably it was sent out then or soon after.
According to the minutes of the meeting, the resolution was put to terminate the service contract, otherwise described as the caretaking agreement, and it was carried by a majority of 27 to 7 with one abstention. The resolution incorporated the notice of default, and the substance of the resolution was: “The Resident Caretaker being in default under the Service Contract (Caretaking Agreement) and having failed to rectify its default of which notice has been given and the body corporate herewith terminates the Service Contract (Caretaking Agreement). Details of the defaults are as set out hereunder.” Then followed the terms of the notice of default. Hence the letter which was subsequently given to the respondent.
On or about 13 February 2007 the respondent made an application to the commissioner under the Act for an order that the resolution terminating the service contract be set aside, and seeking by way of interim relief that the appellant be restrained from taking action in reliance on the resolution. On 28 February 2007 an adjudicator made an interim order restraining the appellant from acting in reliance on the resolution. Subsequently, and at the prompting of the adjudicator in the reasons for making that interim order, the respondent sought and was allowed to amend the application to seek in the alternative a declaration that the resolution was invalid. Subsequently in the relevant decision the adjudicator concluded that the resolution was invalid.
This is the decision which the appellant seeks to challenge. The challenge was based essentially on two grounds: the first, that the adjudicator did not have jurisdiction to deal with this matter, because the respondent was no longer a party to a service agreement, as a result of the termination of the agreement by the appellant. The second, that the reasoning which led the adjudicator to conclude that the resolution was invalid was wrong in law. It is appropriate to deal with these in that order.
Did the adjudicator have jurisdiction?
Chapter 6 of the Act deals with dispute resolution. The purpose of this chapter was to establish arrangements for resolving, in the context of community title schemes, disputes about, among other things, the exercise of rights or powers or the performance of duties under the Act or community management statements, and matters arising under the engagement of persons as body corporate managers, the engagement of certain persons as service contractors, and the authorisation of persons as letting agents.[6] It was not disputed that the effect of the agreement was that the respondent had been engaged as a service contractor for the purposes of the Act. Under s 238 a person may make an application for resolution of a dispute if the person is a party to or is directly concerned with a dispute to which this chapter applies.[7] The concept of “dispute” is defined in s 227 as including a dispute between the body corporate for a community title scheme and a caretaking service contractor under the scheme. The appellant’s argument was that once the caretaking agreement was terminate the respondent ceased to be a caretaking service contractor as that expression was defined in the Act, and thus there was no dispute within s 227(1)(d) of the Act. If there was no dispute then the respondent was not a party to a dispute to which the Act applied and was therefore not entitled to apply to the commissioner for resolution of the dispute.
[6]Act s 228(1)(b), (d).
[7]Not, it may be noted, a party to a contract to which it applies.
This depended on the proposition that the caretaking agreement had been terminated, but it was said to be based on a finding by the adjudicator that that had occurred. This was a reference to what was said at paragraph 18 of the decision: “By letter dated 19 February 2007 from the body corporate’s solicitor … the body corporate gave notice terminating the caretaking agreement.” This was in the part of the determination headed “Background” and I do not consider that it was part of the process of reasoning which produced the conclusion that the agreement had not been validly terminated. The effect of the adjudicator’s conclusion that the decision of the extraordinary general meeting was invalid was that the agreement had not been validly terminated, and it would have been plainly inconsistent with that conclusion to have found that the agreement had been terminated. All the adjudicator was doing there was reciting what had happened, properly described as a purported termination.[8]
[8]As in reasons [56].
Even apart from that, it seems to me that the termination of a caretaking service contract would not necessarily mean that the former party to that contract would not be party to a dispute for the purposes of s 227(1)(d) if that party was in fact in dispute with the body corporate. Consider for example a situation where the contract is about to expire from effluxion of time. If there was a dispute between the parties to the agreement prior to the termination of the contract in this way, it would be unsurprising if the legislature intended that the dispute arising out of the relationship of the body corporate and a caretaking service contractor would still be determined under this scheme, even if that relationship was no longer current.
Accordingly it seems to me that what matters for the purpose of s 227(1)(d) is whether the dispute is between the body corporate and someone who came to be in dispute with the body corporate because of circumstances associated with that person’s status as a caretaking service contractor. That follows because the purpose of the chapter as indicated in s 228(1)(d) includes dealing with disputes about matters arising under the engagement of persons as service contractors. Accordingly what matters for the purpose of s 227 is the basis of the dispute rather than the status of the individuals concerned. What matters is whether the dispute arose with the party other than the body corporate because that other party was a caretaking service contractor. If that were the case, I do not think it matters whether the contract is current or has terminated. Conversely, I do not think that a dispute which arose in circumstances which had nothing to do with a caretaking service contract would come within s 227(1)(d) merely because the party to the dispute other than the body corporate happened, coincidentally, also to be a party to a caretaking service contract of the body corporate. That I think is the consequence of giving a purposive construction to s 227, in the light of the purpose for the chapter declared by the legislature in s 228. It follows that the first argument on behalf of the appellant fails.
Was there a (relevant) error of law?
The first ground listed in the notice of appeal was that the adjudicator erred in law in finding that the resolution to terminate the agreement was invalid. That was expressed in very general terms, perhaps too general, although more details were set out in the outline of argument subsequently filed. Given that the appeal is only on a question of law, and the adjudicator concluded that the resolution was invalid, so that the proposed termination was also invalid, the decision of the adjudicator is liable to challenge by appeal if the conclusion arrived at was wrong in law or if some error of law was made in the reasoning to this conclusion. Although the reasons of the adjudicator clearly involved the conclusion that the resolution was invalid with the consequence that the subsequent termination was invalid, it was not encouraging that there was a substantial divergence between counsel for the appellant and for the respondent as to just what the adjudicator’s reasons were for arriving at that conclusion. It is therefore necessary for me to look closely at the reasons themselves.
Reasons of the adjudicator
They begin by setting out something by way of background, including a description of various things that occurred between the service of the notice of default and the holding of the extraordinary general meeting, and indeed the immediate aftermath. Reference was then made to the application for the interim orders, and to the evidence, and various comments were made about the evidence. The adjudicator noted that the evidence was extensive and that the parties had told conflicting stories. He said that on the evidence of the body corporate at face value the caretaker was totally incompetent and totally underperforming, whereas on the evidence of the caretaker it was the victim of a body corporate determined to rid itself of the caretaking agreement and to go to any extremes in order to do so. It occurs to me that those propositions are not necessarily inconsistent; one would expect that if a caretaker’s performance was hopeless the body corporate would be keen to get rid of the caretaker, with any element of desperation involved in that process attributable to the difficulties placed in its way by the Act and the regulation.
The adjudicator said that the caretaker had been pursued with remarkable tenacity by the members of the committee, which was said to show that the committee if not a majority of unit owners were very determined to rid themselves of the caretaker: [31]. Without making any specific findings, he said that there was clear evidence that for a substantial period of time the caretaker had underperformed: [32]. In those circumstances, the enthusiasm of the committee to get rid of the caretaker is understandable. The adjudicator went on then to comment (I do not think this could be described as a finding) that the default notice “may well have been” justified. He concluded, however, that it was unnecessary to determine whether it was valid, or whether the defaults had been remedied.
He then said that the body corporate appeared to have had two options available to it: to serve a notice to remedy and in the event of failure to remedy to terminate the contract, or to serve a notice under Division 8 of Part 2 of Chapter 3 of the Act requiring transfer of the management rights. The adjudicator continued at [36]:
“The first option (ie the one chosen by the body corporate) was always going to be the most difficult. It would inevitably lead to an application such as the current application, which seeks to protect an asset of substantial value. After all, if an adjudicator or the court dismisses an application such as the present one, they are effectively with the stroke of a pen wiping away this valuable asset. It is obvious that such an order cannot be made lightly.”
That paragraph suggests that it is appropriate for an adjudicator, or for that matter a court, to approach the resolution of the dispute with a strong preconceived reluctance to arrive at a conclusion unfavourable to the caretaker, because of the consequences to the caretaker of the application failing. No doubt those consequences would be unpleasant, but the adjudicator did not seem to recognise that there is more to a caretaking agreement than simply a valuable asset for the caretaker; the fundamental purpose of such an agreement is to ensure that appropriate caretaking services are made available to the body corporate, for the benefit of all the lot owners. It is not immediately apparent to me why lot owners should be saddled with a caretaker who has underperformed for a substantial period of time merely because of a desire to preserve to the caretaker the benefit of the agreement. I would have thought the best way for a caretaker to preserve its valuable asset was to ensure that its obligations under the agreement were properly complied with. If a caretaker has allowed circumstances to arise where the body corporate is entitled to terminate the agreement, that option is available to the body corporate. In any dispute about whether that entitlement has arisen, both parties to the dispute are entitled to an objective determination of the matter, without partiality or prejudgment.[9] What concerns me about this paragraph in particular is that it appears to amount to an admission on the part of the adjudicator that he approached the resolution of the matters in issue between the parties with a preconceived sympathy for the respondent.
[9]Act s 269(2)(a).
The adjudicator then went on to identify five issues which he said needed to be determined in relation to the application: [40]. The first was a question of whether the application was properly brought by the respondent, which was speedily dealt with in favour of the respondent. The second issue was said to be whether the body corporate went about the passing of the resolution in a proper way that was appropriate to the outcome being sought. The third was whether if it did not the consequence was that the resolution was invalid. The fourth was whether, if the resolution was valid, the applicant had standing to make the application because it was no longer a caretaking service provider, and the fifth was whether if the resolution was valid it should otherwise be set aside. It occurs to me that this list of issues disregarded any consideration of whether, as a matter of contract, the entitlement to terminate the caretaking agreement had arisen. Presumably this was not mentioned because of the conclusion at [34] that it was unnecessary to determine the issues associated with that matter for the purpose of disposing of the application.
It was unfortunate that the adjudicator adopted this approach. If there was a deficiency in the procedure by which the resolution was carried, either in terms of a formal defect in the notice of the meeting, or because of a breach by the committee of its fiduciary duty, then presumably the matter could be resubmitted to a further general meeting of the body corporate, and the matter resolved without any such procedural deficiency. Given the size of the majority on the last occasion, I suspect that the outcome would be the same, though that in itself would not be a reason for refusing relief. But if the appellant was not entitled to terminate the caretaking agreement on contractual grounds, it was really a waste of time even considering whether the procedure requirements for termination had been complied with.
Logically, the first issue for determination was whether the appellant was entitled, as a matter of contract, to terminate the caretaking agreement, and accordingly that issue ought to have been decided first by the adjudicator. If he had found that the body corporate was not entitled to terminate the contract, procedural questions about the resolution to do so became irrelevant. When that issue was not determined by the adjudicator, the body corporate was left in the position of not knowing whether there was any point in attempting a further resolution to terminate. That was another unsatisfactory aspect of the approach of the adjudicator.
The adjudicator then turned to the second issue, and referred to the provisions of Part 4 of the regulation. He referred to s 40(3)(e) which requires notice of the general meeting to be accompanied by explanatory material required under s 40C, and said that there was nothing in s 40C that required explanatory material to accompany the notice convening the extraordinary general meeting. He then referred to s 40C(7) which permits a notice of a proposed general meeting to be accompanied by “explanatory material given by the committee, other than an explanatory note mentioned in subsections (2) to (5), if the material is contained in a schedule of the committee’s explanatory material that is separate from the explanatory schedule.” I have no idea what that provision means, if anything,[10] but there does not seem to have been a finding by the adjudicator that anything was done in breach of it, so that probably does not matter. There was then a reference to subsection (8).
[10]This regulation is as incomprehensible as it is over‑prescriptive.
The explanatory schedule to the notice of meeting said that it was submitted by the committee for the extraordinary general meeting motion 2. The committee was the proposer of the motion, and the statement on my count is not longer than 300 words (I make it about 250) so that, on the face of it, it was an explanatory note which fell within s 40C(1)(a) and was therefore one which was required to accompany the voting paper and hence the notice of meeting. It satisfied so far as I can see the requirements of s 40C(2); there appears to have been no evidence or argument to the contrary. In these circumstances, it is not clear what the relevance of s 40C(7) was.
The adjudicator then said it was significant to note that the body corporate chose to set out the terms of the notice of default in full as part of the motion to terminate the caretaking agreement without any information as to whether or not any of the alleged defaults had been rectified. I must say the significance of that escapes me. The proposed resolution was in the following terms:
“The resident caretaker being in default under the service contract (caretaking agreement) and having failed to rectified its default of which notice has been given and the body corporate herewith terminates the service contract (caretaking agreement). The details of the default are as set out hereunder: - .”
There was then quoted the notice of default. The proposed resolution seems to me to be perfectly clear. It involves the propositions that the resident caretaker was in default, that notice of the default had been given and that the resident caretaker had failed to rectify its default. The defaults were those set out in the notice of default which was quoted. This was a practical way of giving particulars of the defaults asserted by the proposer of the motion, the committee, and it seems to me that the notice made it tolerably clear that the committee asserted that the defaults in the notice of default had not been rectified. Whether or not it was necessary for that to be the case for all of them in order for the body corporate to be entitled to terminate the agreement, that was on the face of it what was asserted by this notice of resolution. It seems to me, with all due respect to the adjudicator, that the resolution is quite clear on its face, and that the defaults alleged by the proposer of the resolution were appropriately particularised in the notice of motion. I am unable to understand the adjudicator’s criticism of the wording of the notice of motion in this respect.
The adjudicator then went on to say that the explanatory note that accompanied the notice of meeting as permitted by s 40C(7) was not particularly helpful in assisting a unit owner to determine whether or not it was justifiable to terminate the caretaking agreement. I have looked at the explanatory schedule. It stated, with the conciseness which was inevitable in view of the constraint of the length of the explanatory note imposed by the regulation, that it was the committee’s position that the caretaking agreement should be terminated for failure to comply with the notice given on 20 December 2006. Because the notice had been incorporated in the wording of the resolution, it was not necessary to set out the notice in the explanatory note, something which could not have been done anyway without exceeding the 300 word limit. That may well be a further justification for including the notice of default in the terms of the resolution, since it was plainly impracticable to include it in the explanatory note. The note then went on to explain that the resolution would be by secret ballot, and how that would work, stated clearly that a yes vote supported the termination of the agreement whereas a no vote supported the retention of the respondent as resident caretaker. It drew attention to the fact that one consequence of the termination of the caretaking agreement was that the letting agreement would also come to an end, a matter which may well have been of some importance to some lot owners who wanted to have their lots let by the respondent. It then went on to point out that if the agreement were terminated it was the committee’s intention to appoint a relieving caretaker and letting agent until the body corporate voted on future arrangements.
The adjudicator said that this was not particularly helpful in assisting a unit owner to determine whether or not it was justifiable to terminate the caretaking agreement. As to that, any note which is no longer than 300 words was not going to be able to provide very much assistance in respect of a dispute of this nature, given the complexity of the issues and the large number of defaults alleged by the committee against the respondent. But the absence of a detailed explanation was not the fault of the committee of the body corporate; it was the consequence of the restraint imposed by s 40C(1)(a), which has evidently been drafted on the assumption that the issues raised by a motion at a general meeting will never be more complicated than something that could be explained adequately in not more than 300 words. It seems to me that the explanatory schedule made clear the position of the committee, pointed out appropriately how the vote was to be taken, and drew attention to a consideration which some lot owners may regard as important if the resolution were carried. No doubt someone who knew nothing about the matter apart from what was said in the explanatory note would not be particularly well informed about whether or not it was justifiable to terminate the caretaking agreement, but I cannot see how that could be a basis for criticising the committee or the body corporate.
There was also the consideration that it was not ultimately a matter for the decision of the body corporate whether, as a matter of contract, the agreement was able to be terminated, in the sense that the decision of the body corporate to terminate was not conclusive. Whether there was a right to terminate was something which could be the subject of a dispute and be resolved on the basis of the true facts as found. Whether there was a right to terminate might well be a matter for consideration at the meeting[11] but strictly speaking what the meeting was to decide was whether the right to terminate would be exercised by the body corporate.
[11]A lot owner might regard it as a good reason not to seek to terminate if he or she thought the right to do so did not exist, or if the right to do so was disputed.
The adjudicator then went on to say at [47] that the material incorporated within the notice of meeting was quite damning of the applicant and in the absence of other material would be very persuasive in favour of an affirmative vote. Again, I cannot understand the point of this proposition. There was nothing particularly damning of the respondent in the explanatory schedule, as I have just pointed out, and the notice of default simply set out the defaults the committee asserted had been committed by the respondent. If it is the committee’s position that the respondent is in default under the service agreement in the various respects set out in the notice, and those assertions if true amount to a damning criticism of the respondent as caretaker, that cannot be something which rendered the inclusion of these matters in the notice of motion inappropriate.
What is the alternative? If hypothetically a caretaker had been in default under the caretaking agreement to such an extent that any list of the defaults which had occurred would inevitably amount to something quite damning of the caretaker and therefore very persuasive to an affirmative vote, is the committee of the body corporate required to pull its punches, and allege only a part of the defaults, being a part which could not be characterised as damning of the caretaker? That would be absurd, and there is no reason to think the regulation requires it. If a caretaker is in default in a large number of ways under the caretaking agreement, then it is appropriate that all of the defaults be identified in a notice of this nature and the caretaker be required to remedy all of them, and there is certainly an entitlement under the contract for the body corporate to do so. Indeed, the body corporate is required to do so if it wants to take any further action in relation to those defaults. If it is therefore the committee’s position that all of these defaults have been committed, it seems to me that the committee really had no sensible alternative to including all of the defaults in the notice of default. Once one gets to that point, it seems to me entirely appropriate that the same list of defaults should be incorporated in the notice of motion, in order that all of the lot owners are informed of all of the defaults which are alleged by the committee.
The adjudicator then went on to say at [47]: “The notice of meeting does not set out a balanced assessment of the situation and it makes no mention of the denials of the applicant in relation to the alleged defaults.” If a notice of default in particular terms has been given to the respondent, I fail to see how incorporating that notice in the notice of motion was in any sense unbalanced. It was true that the notice of motion did not incorporate or indeed make any mention of the respondent’s response to that letter, and the respondent’s denials in relation to the alleged defaults. There were two good reasons for that. The first was that there was no logical place for such a thing in the notice of the resolution. The second was that the respondent’s response was not received until 19 January 2007, four days after the date of the notice of meeting, when it was presumably sent out.[12] Whatever is required by way of a notice of meeting, it can hardly be expected to anticipate the future, or incorporate reference to events which have not yet occurred.
[12]The date of the respondent’s response was mentioned by the adjudicator at [13], where he again missed the point that this was after the notice of the general meeting had been given, the date of which does not appear to have been mentioned in his reasons.
In any case, I cannot understand why the notice should be required to be balanced. What the notice is required to do is to give notice of the resolution actually proposed. The obligation is faithfully to reproduce what it is that has been proposed by the committee, or whoever else is proposing the motion,[13] and there is a requirement that if an explanatory note of the resolution is provided by the submitter of the motion it must be included.[14] Obviously any note put forward by the submitter of the motion is going to present an argument in favour of the motion. I cannot see anything in the regulation which requires the submitter of the motion to include in the explanatory note arguments against the motion as well as arguments in favour of it, so as to be balanced, and such a proposition strikes me as not supported by anything in the legislation or the general law.
[13]Regulation s 39(2).
[14]Regulation s 40C(1)(a).
If the respondent had, prior to the notice being given, communicated to the committee that it was its position that the defaults alleged against it were denied,[15] an issue would arise as to whether there was any obligation on the part of the committee to refer to that fact in the terms of the resolution or the explanatory note. It seems to me that the material sent out made the true position quite clear, namely that the committee alleged that these defaults had occurred and they had not been remedied and that the appropriate response was to terminate the agreement. It was open to the respondent to assert to the contrary if that were his position. I am completely unable to see how, in terms of the true function of the motion, there was anything unbalanced about the notice of meeting, or that there was any obligation for the notice and explanatory note to be balanced.
[15]There was no finding to this effect by the adjudicator, or any reference to any evidentiary basis for such a finding.
The adjudicator then went on at [48] to refer to a communication sent to the lot owners by the committee after the notice of meeting; this communication was quoted in paragraph 14 of the reasons. The adjudicator noted that it contained an express assertion that all defaults were valid, current and ongoing. Accordingly if there had been any ambiguity in the earlier material as to whether it was asserted by the committee that the defaults were continuing in respect of all of the matters identified in the notice of default, that communication removed that ambiguity. However, the adjudicator said that the notice did “not correct the situation. Indeed, it is even more damning of the applicant.” Reference was made to the assertion in that communication that the respondent had cost the appellant over $60,000. It was said to make no mention of the denials of the respondent, and to graphically illustrate the ongoing defaults by means of seven photographs.[16] The fact that the photographs might have been persuasive did not make it improper to circulate them.
[16]I cannot see how the inclusion of photographs was a problem, unless perhaps they were photographs of something else, which was not a finding made. There was no finding that the photographs did not accurately depict the true situation.
In paragraphs [49]-[51] the adjudicator then commented on the proposition that the eight items of cost listed in the committee communication were tested by him and that “based on the information that testing brought to light, it is clear to me that in respect of many of those items, the body corporate would have great difficulty in a court of law establishing liability on the part of the applicant, on the balance of probabilities. Even if the body corporate were successful in establishing that liability, there would be substantial argument as to the quantum of any damages and there is no doubt in my mind that the amount recoverable by the body corporate would be substantially less than the $62,550 alleged in the committee communication. To this extent, the committee communication is misleading.”
The respondent’s position was that the notice of meeting, the explanatory note, and this later communication were misleading because they did not disclose that the propositions that the respondent was in default, and had not remedied the defaults, were disputed, and the material did not draw attention to the grave consequences to the lot owners if the contract were terminated, or was wrongfully repudiated. But this was the only specific finding that any particular thing was misleading. It could have been said that this finding was a finding of fact on the part of the adjudicator, and it was a sufficient basis for a conclusion that the resolution of the extraordinary general meeting was invalid, and that the finding that the communication was misleading was a conclusion of fact which was not susceptible of challenge on an appeal on a question of law. If so and if the latter proposition was right in law, there was no proper basis shown on which I could allow the appeal, and the various other comments made by the adjudicator in the course of his reasons were not directly related to his conclusion or his findings, so that, even if they did involve some misapprehension of the proper functioning of the Act or the regulation, that did not invalidate his decision.
The first of these propositions, that the finding that the communication was misleading was a question of fact, is true, but that is really no answer. The difficulty with this finding is that, although the adjudicator produced 11 close‑typed pages of reasons for his final determination, he provided no reasons for this particular finding, which was the only specific finding that anything was misleading. There was no explanation as to why or how or on the basis of what evidence the adjudicator came to the conclusion that it was misleading to assert that the cost to which the body corporate had been put by reason of the defaults of the respondent, assuming that it had been put to cost by reason of the respondent’s defaults, was substantially less than the amount of $62,550 alleged by the committee in this communication.
Obligation to give reasons
The order of adjudicator must be accompanied by a statement of the adjudicator’s reasons for the decision: s 274(2)(b)(i) of the Act. This is consistent with the ordinary rules in relation to the obligation of a court to give reasons for its decision. It is well established that there is a duty on the part of judicial tribunals to give reasons for their decisions and that failure to give reasons which ought to be given can amount to an error in law.[17] What is required to be included in the reasons varies, and depends on the circumstances. In Cypressvale Pty Ltd v Retail Shop Leases Tribunal [1996] 2 Qd R 462 at 476-7 Fitzgerald P said:
“The broad principle deductible from the cases is that the decision‑maker is required to give reasons which disclose what was taken into account and in what manner, and thus whether an error has been made. … There have been many attempts to elaborate; indicating for example, the need for findings of fact, usually related at least in broad terms to the evidence on which each finding is based, and an explanation of the reasoning process; vague general statements, or unexplained conclusions are not sufficient. While a tribunal such as the Retail Shop Leases Tribunal might not be required to ‘submit the material before it to the most meticulous analysis and carry into [the reasons for its decisions] a detailed exposition of every aspect of the evidence and the arguments’ or ‘incorporate an extended intellectual dissertation upon the chain of reasoning’, at least ‘a basic explanation of the fundamental reasons which led the [tribunal] to [its] conclusion’ is necessary.”
[17]Crystal Dawn Pty Ltd v Redruth Pty Ltd [1998] QCA 373; Bawden v ACI Operations Pty Ltd [2003] QCA 293 at [29]. As to when this amounts to an error of law, see Attorney‑General v Kehoe [2000] QCA 222 at [23].
In that matter his Honour’s judgment was a dissenting one, but this proposition was approved by all the members of the court in Suncorp Insurance and Finance v Hill [1998] QCA 112, and in Bawden v ACI Operations Pty Ltd [2003] QCA 293 at [29]. I consider that that obligation applies equally to the statutory obligation under s 274(2)(b)(i). The passage to which I have just referred in the adjudicator’s reasons was obviously devoid of any identification even in broad terms of the evidence on which the finding was based or any explanation of the reasoning process; it contained merely an unexplained conclusion. It amounted in the circumstances to an error of law which in my opinion would justify setting aside the decision of the adjudicator. That I think is particularly so in a case where the finding follows a series of statements, arguably obiter, which seem to me to be obviously open to criticism, and which suggest that the adjudicator was approaching this matter with a strong predisposition in favour of the respondent.
I am not at all sure, however, that it was the adjudicator’s decision that the invalidity flowed simply from the fact that this communication, which had been sent by the committee, was misleading in this way. The adjudicator went on to say at [52] that the applicant’s communication to investment owners would not necessarily have corrected the situation, because it was competing with an official communication from the committee of the body corporate, presented in the strongest possible terms, and it was only distributed to investment owners and therefore was not available to other owners. Again I find this proposition puzzling. I cannot see why it should assist the respondent’s case, or be in effect a basis for criticism of the committee of the body corporate, that the respondent chose to distribute his communication only to investment owners and not to resident owners. One might suspect that his omission to provide this defence to resident owners could be explained as a tacit recognition that he had negligible chance of persuading the owners who were actually living in the premises, and knew what the physical state of the premises had been like, that there had not been widespread default under the caretaking agreement.
It also seems to me that the former proposition, apart from being factually inaccurate,[18] seems to suggest that inevitably anyone other than the committee who seeks to present an argument against a notice of motion proposed by the committee is entitled to have the resolution which results in the motion being carried set aside simply because anything that that person said in opposition to what was being said by the committee was necessarily going to carry less weight than anything said by the committee. That cannot be right. The point is that lot owners at a meeting of this nature are expected to make up their own mind as to whether they will support the motion or not, and ordinarily those opposed to the motion, like those supporting it, have the opportunity to persuade, and the task of persuading, those lot owners to vote in favour the position they advocate. The mere fact that the committee was on one side can hardly be a basis of rendering that process unbalanced and unfair, and therefore incapable of producing a valid result. The respondent cannot complain that it was deprived of the opportunity to present its case on the basis that it chose not to present it.
[18]In the sense that I can think of a lot of ways in which the propositions included in the notice of meeting and the committee’s subsequent communication could have been expressed in terms which were even stronger.
The adjudicator then said at [53]:
“It is my conclusion that the committee (and therefore the body corporate) attempted to get around the prohibition in s 40C(8) of the module by doing two things:
(j)incorporating into the wording of the motion to terminate the caretaking agreement the terms of the notice of default; and
(k)sending around the separate communication to all lot owners.”
He said at [54] that this amounted to a clear contravention of the prohibition in s 40C(8) which directly impacted on the validity of the resolution purportedly passed on 11 February 2007. He then said at [55]:
“In addition to that, the unit owners were seriously misled by the way in which information intended to help them in their voting decision was presented to them. That information was such as to virtually guarantee the passing of the motion, as was most likely the clear intention of the committee. This is a serious defect in any circumstances, but more so when the subject matter of the motion has such devastating effects for one of the unit owners.”
He then went on to state the conclusion that the resolution was invalid. As I read the reasons, the adjudicator did not say that the resolution was invalid just because there had been a misleading communication sent by the committee. On the contrary, the adjudicator came to the conclusion that the resolution was invalid because of a contravention by the body corporate of s 40C(8) which was said directly to impact on the validity of the resolution, and because the unit owners were misled by the way in which information generally was communicated to them, that is, misled by everything provided to them by the committee. That it seems to me was the true basis of the reasoning of the adjudicator; it was much wider than the mere proposition that some specific thing was said in the communication sent after the notice of the meeting which was misleading, although there was no other specific finding as to how or why the material from the committee was misleading.
No breach of s 40C(8)
As to the former proposition, that there was a contravention of s 40C(8), in my opinion that conclusion was clearly wrong and involved an error of law.[19] The explanatory material in the schedule to the notice of motion was not merely something permitted to be circulated, it was required to be circulated under s 40C(1)(a) of the regulation. Even if this were not so, the adjudicator in paragraph [46] found that the explanatory notes that accompanied the meeting were permitted by s 40C(7), and if that were the case then there was plainly no breach of s 40C(8), which permits a voting paper to be accompanied by explanatory material if it is permitted under the regulation. As I read the reasons there was not a finding that the material in the explanatory schedule was not permitted by s 40C(7), but rather a finding to the contrary. Accordingly, there was necessarily no breach of s 40C(8) in including in the notice of the meeting the materials in the explanatory schedule.
[19]Counsel for the respondent did not seek to uphold the decision of the adjudicator that there was a breach of s 40C: Tscp p 3.
It seems to me that the conclusion that there was a breach of s 40C(8) was based on the proposition that the terms of the notice of default had been included in the wording of the motion, as explained in [53]. There are two problems with that proposition. The first is that s 40C is not a restriction on the terms of a proposed motion. Indeed, so far as I can see there is no restriction in the regulation as to the terms of a motion proposed to a general meeting of members. Section 39 of the regulation provides that a motion for consideration at a general meeting may be submitted at any time by, inter alia, the committee, and in subsection (2) that if a motion is submitted it must be included in the next general meeting agenda subject to subsections (3) and (4). Subsection (3) does not apply to a motion submitted by the committee, and subsection (4) applies only to motions which if included would result in a particular type of motion having been considered more than once in a financial year for the body corporate. The types are specified and none of these refer to a motion to terminate a service contract. It seems to me that the obligation on the body corporate was to incorporate the terms of the motion as proposed by the committee in the notice of the general meeting. There was certainly not a breach of s 39 of the Act by the body corporate in circulating the notice of motion.
The adjudicator’s proposition that the actions of the committee were the actions of the body corporate was also in my opinion not correct. The scheme of the Act and regulation is that in respect of some matters the actions of the committee are the actions of the body corporate, but in respect of other matters the body corporate acts by resolution in general meeting. In respect of matters where the body corporate acts by resolution in general meeting, so that the matter is a restricted issue for the committee, the effect of s 100 is that a decision of the committee is not a decision of the body corporate.[20] It follows that the committee in proposing a motion for a general meeting, is not acting as the body corporate. If a committee does do something which is contrary to the Act or regulation in relation to a resolution put to a body corporate, that may result in invalidity of the resolution, but it is not because that act of the committee amounted to an act of the body corporate.
[20]Fraser v NRMA Holdings Ltd (1995) 55 FCR 452 at 471.
All of this, however, is really beside the point, because for reasons that I have already given I consider that there was nothing objectionable in the inclusion in the notice of motion of the terms of the notice of default. It was in my opinion entirely appropriate that the notice of motion should have included particulars of the defaults alleged by the committee against the respondent, and setting out the terms of the notice of default was a convenient way of doing so. It also provided members of the body corporate with the opportunity to make their own assessment of whether the notice given was in accordance with the requirements of the relevant part of the caretaking agreement. Far from being a matter for criticism, in my opinion it was actually something the inclusion of which in the motion was appropriate and helpful. The conclusion of the adjudicator that the inclusion of the terms of the notice of default in the wording of the motion amounted to a contravention of s 40C(8) was therefore wrong in law.[21]
[21]There was no legal justification for it, and, to the extent that it involved a conclusion of fact, it was a conclusion no reasonable adjudicator would have reached on the material.
It also seems to me that, insofar as criticism by the adjudicator of the terms of the notice of motion and the explanatory schedule as discussed earlier was included as part of the matters taken into account in paragraph [55] of the reasons, that was unjustified and also amounted to an error of law. The adjudicator’s real criticism, however, seemed to be based on the proposition that it was necessary for the body corporate to present a balanced position to the lot owners, that is to say, to put, as it were, both sides of the argument. He did not distinguish between that and an obligation to acknowledge that the respondent’s position was that he was not in default in the ways alleged by the committee, or that any default had been remedied, as the case may be. It seems to me that that is the real basis on which the actions of the committee were criticised by the adjudicator, rather than the narrow proposition that the assertion that the cost of the respondent’s defaults to the body corporate had been in excess of $60,000 was misleading.
I can find nothing in the Act or regulation which required the committee of the body corporate when proposing a resolution of this nature, to set out arguments against the resolution, or to disclose that the factual matters asserted by the committee were disputed by the respondent, or anyone else.
Notice of meeting
There is certainly an obligation to give proper notice of what is actually to be considered by the meeting, and to point out the relevant consequences of the approval of the resolution. If there is a failure to give proper notice of the meeting, which may occur if the notice of the proposed resolution is misleading as to what is really proposed, or its effect and implications, then that may well impact on the validity of the resolution, because in such circumstances there was either no valid notice of the meeting or no valid notice of the proposed resolution.
A notice of a meeting must indicate the general nature of the business to be brought before the meeting or its object, to give members fair warning of the matters to be dealt with: Ryan v Edna May Junction Gold Mining Co (1916) 21 CLR 487 at 496 per Barton J, who also quoted with approval at p 495 a passage from the judgment of Bowen LJ in Alexander v Simpson (1889) 43 Ch D 139 at 149:
“The construction of a notice convening an extraordinary general meeting of a company is not a technical point, and I agree entirely with what Mr Justice Chitty has pointed out - the extreme importance that these notices should be so plain that those who run may read, and that they should be construed in a sense in which businessmen to whom they are addressed would understand them.”
In Ryan, Isaacs J at p 500 said:
“All that is needed in the absence of definite provision is a fair and reasonable intimation of what is actually proposed to be done. … If on the whole it gives fair business‑like notice in the circumstances, that is enough.”
In that case the issue was whether a notice of a proposal to wind up a company voluntarily at an extraordinary general meeting to be held at such a time that, under the articles, there was an adverse consequence for the holders of particular shares in the company, vendor’s shares, in terms of the distribution of surplus assets on the winding up of the company was valid because this was not pointed out. In that situation the High Court held that it was necessary to give notice of that consequence if the resolution was carried. It seems to me that the analogue in the present case is that notice was given in the explanatory schedule of the fact that determination of the caretaking agreement had the effect of automatically bringing to an end the letting agreement, a matter which as I have noted may well have been of some concern to some lot owners.
Of course the test in relation to the notice of a meeting of a body corporate would be cast in terms of the ordinary lot owner rather than a businessman; indeed, these days where the holding of shares is more widely distributed within the community the case of notices of publicly listed companies at least is also somewhat broader.[22]
[22]Devereaux Holdings Pty Ltd v Pelsart Resources NL (No. 2) (1985) 9 ACLR 956 at 958.
I cannot see how there was any deficiency in the notice given in the present matter; what was proposed was abundantly clear from notice, that a resolution be passed which had the effect of terminating the caretaking agreement. No implication or consequence of that has been identified either in the reasons of the adjudicator or in the submissions before me which would not have been entirely clear to anyone who read the notice of meeting and the schedule, no matter how fast he was running. The effect of this proposed resolution was fully set out, and the only ground of lack of information identified was that the schedule did not disclose that the respondent disputed the existence of the defaults, something that apparently had not occurred at the time the notice was sent out.
The fiduciary duty of the committee
Apart from this, in the case of ordinary companies there is an equitable principle derived from the fiduciary duty of directors to provide corporators with material which is substantially full and true in relation to any proposal that the directors are putting before a meeting of the corporators.[23] It was submitted for the respondent that this principle applied to the members of the committee of the body corporate, and I proceed on the basis that that was correct. There are particular obligations of frankness on members of a board of a company, or members of a committee of a body corporate, where the effect of the carriage of the resolution would be to confer some benefit on one or more, or all of them: Baillie v Oriental Telephone and Electric Co Ltd [1915] 1 Ch 503.[24] There is nothing in the reasons of the adjudicator to suggest that considerations of this nature were applicable here.
[23]Devereaux Holdings Pty Ltd v Pelsart Resources NL (No. 2) (1985) 9 ACLR 956 at 958.
[24]See also Chequepoint Securities Ltd v Claremont Petroleum NL (1986) 11 ACLR 94 at 96; Bulfin v Bebarfald’s Ltd (1938) 38 SR (NSW) 423 at 432.
In Bulfin v Bebarfald’s Ltd (1938) 38 SR (NSW) 423 Long Innes CJ in Eq reviewed a number of authorities dealing with this principle, and said at p 430 that company directors had a duty to exercise their powers in good faith for the benefit of the company as a whole. He noted various statements, such as that at p 433, that there was a breach if shareholders had not been fully and fairly informed of what was proposed to be done, and at p 435, that the issue was whether a shareholder who had not participated in the vote would have done so if he had known the real facts. He also noted at p 437 a decision where relief was refused,[25] where there was a finding that the circular would have conveyed the information necessary to enable members to realise what the proposals of the board were, and the grounds on which the policy underlying the proposals was based.
[25]Carruth v Imperial Chemical Industries Ltd [1937] AC 707, a decision of the House of Lords.
Bultin was applied by McPherson J in Bancorp Investments Ltd v Primac Holdings Ltd (1984) 9 ACLR 263. His Honour said at p 266 that “a notice … should be couched in clear terms and that any comments … from the board of directors should fully and fairly inform and instruct the shareholders upon what is proposed to be done.” In that case notice of a proposal to replace the articles was held insufficient where the commentary from the Board did not correctly summarise the effect of the proposed change, in circumstances where the notice did not set out all the proposed new articles.
Accordingly, the appellant cannot show the respondent’s application is doomed to fail because the adjudicator lacked the power to give relief for breach of an equitable principle. On the other hand, the respondent is not entitled to support the existing decision of the adjudicator simply on the basis that the adjudicator thought that the result was unfair to the respondent[37]. It is in my opinion necessary to show some proper basis in law or equity for the grant of relief under s 276(1) where that has the effect of preventing a majority of the members of the body corporate from exercising effectively their rights to vote at general meetings, in accordance with the scheme laid down by the Act and regulation.
[37]Counsel for the respondent did not seek to support the decision of the adjudicator on this basis.
Irrelevant matters
The appellant also submitted that the adjudicator had erred in law in taking into account irrelevant matters, essentially by reference to the various things said by the adjudicator in his reasons to which I have already referred critically. It is I think sufficient for me to say that the reasons of the adjudicator are so unclear that I cannot be certain what has and what has not been taken into account by him in coming to the decision that the resolution was invalid, and accordingly it is not possible to say whether or not irrelevant considerations were involved in that decision. Since the decision is to be set aside anyway, it is not I think necessary for me to say anything further in relation to this particular ground.
The appellant also challenged the adjudicator’s order under s 280 that it pay the costs of the adjudication. It is unnecessary in the circumstances to consider whether, if the order of the adjudicator had been otherwise sustainable, the adjudicator’s order that the appellant pay those costs ought to be set aside. In the circumstances where the substantive appeal succeeds, the whole of the orders made by the adjudicator including the order in relation to payment of the costs should be set aside, and should abide the outcome of the rehearing. The respondent should, however, pay the costs of the appeal, to be assessed.
Conclusion
In the circumstances therefore the decision of the adjudicator involved errors of law and should be set aside. Given that the relevant factual considerations, including the contractual issues, had not been resolved by the adjudicator, the appropriate course is to send the matter back for rehearing, under s 294(1)(c). There were some submissions before me as to whether the effect of this provision was that any rehearing had to take place before the same adjudicator. Although read literally that is what the section says, I do not think that it should be interpreted so narrowly.
The legislature must have been cognizant of the fact that circumstances could easily arise under which the matter could not be sent back to the same adjudicator. For example, the error of law justifying setting aside the decision might have involved the error of a hypothetical adjudicator in failing to disqualify him or herself for actual or apparent bias; the adjudicator concerned might be dead, or might be no longer willing or able to do adjudications, or perhaps just not willing to do this one anymore. Technically the power is to refer the order back through the Commissioner, and I do not consider that the statute on its true construction excludes the capacity of the Commissioner to appoint a different specialist adjudicator, and in those circumstances, if it is inappropriate for the same specialist adjudicator to conduct the rehearing, there must be a power in the court to order that the Commissioner refer the matter to a different specialist adjudicator for rehearing.
In my opinion it is not appropriate in the present case that the rehearing take place before the same adjudicator. As I have noted earlier, the reasons of the adjudicator suggest that he had pre‑judged the matter, and was predisposed to favour the position of the respondent, and his views were so firmly expressed adversely to the appellant that I do not consider that the rehearing could be conducted fairly before him. As well, it appeared to me that his whole approach to the mater was wrong.
The adjudicator was required to act in accordance with the rules of natural justice, which include that the parties were entitled to a decision maker who was unbiased in fact and in appearance.[38] The question in relation to apparent bias is whether in all the circumstances the parties or the public might entertain a reasonable apprehension that the decision maker might not bring an impartial and unprejudiced mind to the resolution of the question involved in the case.[39] This is something which has to be assessed according to the function being discharged and the particular circumstances, and where, as here, there are reasons for the decision, a reasonable apprehension endangered by the terms of those reasons can give rise to an indication of apprehended bias. It was not a ground of appeal that the decision was defective because of actual or apparent bias, and I do not decide whether that test was satisfied by the matters in the reasons of the adjudicator to which I have referred. Where a matter has to be reheard I do not consider that it is necessary to satisfy that test in order to justify an order or direction that the matter be heard and determined by someone else. In all the circumstances I consider that in this case it is appropriate that I make an order that any determination be by someone other than the adjudicator who made the decision subject to the appeal.
[38]Chu v Minister for Immigration and Ethnic Affairs (1997) 78 FCR 314 at 337-8.
[39]Livesey v NSW Bar Association (1983) 151 CLR 288 at 293-4; Minister for Immigration v Mok (1994) 55 FCR 375.
Accordingly the orders are:
1. Appeal allowed.
2. Orders of the adjudicator of 23 June 2007 set aside.
3. Through the Commissioner, refer the matter back to an adjudicator, other than the adjudicator who made the orders of 23 June 2007, to resolve the dispute according to law.
4. Order that the respondent pay the appellant’s costs of and incidental to the appeal to be assessed.
5. Order that the costs of the adjudication which produced the orders which have been set aside abide the final outcome of the adjudication.
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