McKinnon & Ors v Adams & Ors

[2007] VSC 539

IN THE SUPREME COURT OF VICTORIA Not Restricted

AT MELBOURNE

PRACTICE COURT

No. 8605 of 2001

J. McKINNON & OTHERS	Plaintiffs
v
H. ADAMS & OTHERS	Defendant

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JUDGE:	HARPER J
WHERE HELD:	MELBOURNE
DATE OF HEARING:	30 NOVEMBER 2007
DATE OF JUDGMENT:	30 NOVEMBER 2007
CASE MAY BE CITED AS:	McKINNON v ADAMS
MEDIUM NEUTRAL CITATION:	[2007] VSC 539

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Body Corporate – Application for extension of appointment of an administrator – Monies alleged to be owed to the body corporate by one member – Continuing history of dispute between the members – Undertakings given – Change in composition of body corporate membership since administrator first appointed - No named plaintiffs a party to the application – Application refused.

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APPEARANCES:	Counsel	Solicitors
For the Plaintiffs	No appearance
For the First Defendant	Mr J. Dixon SC	DLA Phillips Fox
For the Fourth Defendant	Mr P. Clarke
For Messrs Pike & Gleeson (current unit owners)	Mr R. Ashley

HIS HONOUR:

1. This is an application made by the administrator on behalf of Body Corporate Strata Plan No. 17739 for the appointment of the administrator to be extended to 31 October 2009 on the same terms as those which applied pursuant to the order of Bongiorno J dated 28 April 2003. 

1. The administration has now been extant for over four years.  When His Honour made the orders to which I have already referred, he contemplated that the administration would probably come to an end on 31 October 2004.  His Honour nevertheless provided in the orders he made following his judgment, by paragraph  1(a) of those orders, that the end date was subject to further order of the court. 

1. There has been some argument before me about whether in making that provision, His Honour intended only that the administration might conclude before 31 October 2004 and did not contemplate its extension beyond that date.  Having read the relevant portion of His Honour's judgment, I am satisfied that His Honour did not intend by his order to preclude the extension of the administration.  Indeed, as is apparent from the fact that it remains extant, it has been extended since the original order was made. 

1. The latest extension expires, I am informed, this afternoon.  Hence the application by the Body Corporate for a further extension.  That application is based upon a number of propositions.  First, the administrator acting on behalf of the Body Corporate alleges that the sum of $30,000 approximately is owing by the first defendant, Ms Adams, to the Body Corporate.  That sum would best be recovered, it was submitted on behalf of the Body Corporate in this proceeding, by a claim supported by affidavit material which would be heard by the court in accordance with the court's usual processes adapted to meet the particular circumstances of this case, but in this proceeding, No. 8605 of 2001.

1. In the past, orders in this proceeding have been made in relation to claims made by the Body Corporate against Ms Adams and those claims have been dealt with, as I understand it, without the parties suggesting that that procedure was inappropriate.  Nevertheless, there are of course, other means by which the $30,000 claim can be litigated.

1. It is therefore not necessary for the administration to continue solely in order to preserve whatever rights the Body Corporate has pursuant to that claim.  Indeed, I am informed that, if asked, Ms Adams will give an undertaking to the court that she would not use her voting power as a member of the Body Corporate to prevent the passage of a motion to the effect that the Body Corporate pursue through legitimate means any claim it might have to the sum in question.

1. The other bases for a submission that the administration be extended were, first, that a number of the other members of the Body Corporate apart from Ms Adams wish it to continue; and, secondly, that were it to be discontinued, the Body Corporate would immediately revert to the position, or an analogous position, to that in which it was at the time that Bongiorno J made his orders in April 2003. 

1. The factual basis for the last submission is, it seems to me, clearly made out on the materials before me.  There has been a continuing history of disputation within the Body Corporate since Ms Adams became a member of it in late 1988 or early 1989.  That history is shortly described in the judgment of Bongiorno J delivered on 16 April 2003.  It is sufficient for me to note that within days of Ms Adams becoming a member of the Body Corporate, she commenced to write to its members indicating her dissatisfaction with a wide range of matters concerning the Body Corporate and that her dissatisfaction has remained, albeit no doubt in different forms, more or less constantly, as I understand it, ever since.

1. The prospects of a reasoned settlement of the disputation between Ms Adams and her co-members of the Body Corporate was, at least until today, distant.  However, I have been heartened by Ms Adams' preparedness to give the undertaking to which I have referred and by her sworn statement contained in an affidavit of 23 November 2007 that she believes that the Body Corporate can work together to achieve the objectives to which she refers in her affidavit and that she will use her best endeavours to work cooperatively with her fellow members to achieve the best outcome for all of them.

1. If those undertakings are given, in the spirit as well as in the form to which I have referred, there is perhaps some real prospect that the saga of disputation will not continue.  Not only that, but the undertaking to which I have referred will clear the way for a proper resolution of the fate of the monies allegedly outstanding as between the Body Corporate and Ms Adams. 

1. If that dispute cannot be settled, then it will be dealt with in an appropriate form with the parties proceeding as quickly as reasonably possible towards one resolution or the other, whether litigated or not. 

1. Given the prospects to which I have just referred, it seems to me that it is no longer appropriate to continue this administration.  One of the matters which has influenced me in coming to this conclusion is that the original plaintiffs in this proceeding are no longer members of the Body Corporate.  The effect of that is that the present application for a continuation of the administration, although properly brought in the name of the Body Corporate, is in reality an application by the administrator himself for a continuation of the administration.  I say that, bearing in mind that on the evidence, at least some of the members of the Body Corporate support the continuation of the administration and against the background of my satisfaction that this application has not been made for other than reasons which, to the administrator,  appear to be entirely appropriate.  In short, I cast no aspersion upon the administrator for bringing the proceeding or seeking the particular relief presently sought before me. 

1. It does seem to me, however, that it would be inappropriate for an administration to continue where none of the present members of the Body Corporate are parties to the application other than by reason of the membership of the Body Corporate, and where the administration has continued for over four years.  It is now, I think, appropriate to allow the Body Corporate to return to the usual form of governance -  that which is provided for under the relevant legislation.  That governance is by the members of the Body Corporate themselves. 

1. It seems to me that it is not appropriate, in the absence of any members of the Body Corporate being in their own names party to this application, for the application to be granted.  For those reasons, it will be refused on my being given the undertakings to which I have referred. 

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