Mynex Pty Ltd as trustee for the Peake Trust v Body Corporate for Captains Corner

[2010] QCAT 157

CITATION: Mynex Pty Ltd as trustee for The Peake Trust v Body Corporate for Captains Corner [2010] QCAT 157

PARTIES:	Mynex Pty Ltd (ACN 092 021 433) as Trustee for The Peake Trust
v
Body Corporate for Captains Corner CTS 36430

APPLICATION NUMBER:   OCL011-10  

MATTER TYPE: Other civil dispute matters

HEARING DATE:     27 April 2010

HEARD AT:  BRISBANE

DECISION ON THE PAPERS OF: Ms J Reid

DELIVERED ON: 27 April 2010

DELIVERED AT:      BRISBANE

ORDERS MADE: The application is dismissed.

CATCHWORDS :  Preliminary Issue – jurisdiction

APPEARANCES and REPRESENTATION (if any):

Decision made on the papers.

REASONS FOR DECISION

1. The applicants filed an application relating to a dispute arising out of a review of terms of service contract pursuant to section 133 of the Body Corporate and Community Management Act 1997 (the BCCM Act).

1. An amended application was received in the registry on 23 March 2010. On the 24 March 2010 at a Directions Hearing, Justice Wilson directed the parties to file submissions on a preliminary jurisdiction issue. The respondent’s submissions were received on 31 March 2010, relying on Paragraph E of their response and seeking dismissal of the application. The applicant’s submissions were received on the 13 April 2010.

1. The preliminary issue to be resolved by this Tribunal is to determine if the Tribunal has jurisdiction to hear the application.

Background

1. The applicant sought a review of the current terms of the service contract.

Section 130 of BCCM Act provides as follows:

(1)This section applies if—

(a)   the body corporate for a community titles scheme—

(i)enters into a service contract with a person after the commencement of this section and within the original owner control period and the person's term of engagement as the service contractor under the contract has not ended; or

(ii)intends to extend or vary, before 1 January 2005, an existing service contract entered into between the body corporate and a person within the original owner control period; and

(b)   the original owner control period has ended.

(2)If requested by the body corporate or person (each a reviewing party), the reviewing parties must, as provided under this division and for the purpose mentioned in section 131, review the terms of the contract that provide for—

(a)    the functions and powers of the person as the service contractor; or

(b)    the remuneration payable to the person as the service contractor.

(3)The body corporate may make a request under subsection (2) only if the body corporate, by ordinary resolution, has authorised the making of the request.

(4)Subsection (2)(b) does not apply to an existing service contract if its terms that provide for the remuneration payable to the person as the service contractor have been reviewed by the reviewing parties before the commencement of this section.

(5)The review applies to the contract even if the contract also provides for 1 or more of the following—

(a)   the person's engagement as a body corporate manager;

(b)   the person's authorisation as a letting agent.

(6)

The contract may be reviewed under this division only once.

Section 131 provides:

The purpose of the review is to help the reviewing parties decide--

(a)if the terms mentioned in section 130(2) (the reviewable terms) are currently fair and reasonable; and

(b)if the reviewable terms are not currently fair and reasonable--how the reviewable terms should be changed to ensure they are fair and reasonable.

1. The applicant sought the services of an independent person to review the contract in accordance with Section 132 which provides as follows:

   Within 2 months after requesting the review, the reviewing party who requested it must--

   (a)obtain from an appropriate person independent written advice (the review advice), based on the review criteria, about the matters mentioned in section 131(a) and (b); and

   (b)give a copy of the advice to the other reviewing party.

   Example of appropriate person for subsection (1)(a)—

a person who, in the ordinary course of the person's business, has knowledge of the functions and powers of service contractors and the remuneration for performing the functions and powers

(2)The review must be carried out having regard to the review criteria.

(3)The body corporate's final decision about the outcome of the review must be made by ordinary resolution.

(4)The review must be finished as soon as reasonably practicable after a copy of the review advice is given to a reviewing party under subsection (1)(b) and-- (a) before the term of the engagement as service contractor ends; and (b) within the review period.

1. On 16 February 2007 the parties entered into a contract whereby the applicant provided caretaking service to the respondent. The agreement was for a period of 25 years, expiring on 15 February 2032. The agreement has not been previously reviewed pursuant to section 130 (6) of the BCCM Act.

The Applicant’s submission

1. The applicant contends that the respondent misconstrues the meaning of the review process set out in the BCCM Act. The applicant states that in accordance with the provisions of Section 130(2) a request is made by a reviewing party for a review and that on the 11 December 2009 a request by the applicant was made in writing to the respondent.

1. On 5 February 2010, the applicant obtained the review and provided a copy to the respondent by hand delivery. An Affidavit of Service sworn by Luke Smith attests to the service of the review documents to the respondents on that date.

1. The applicant states the review date ended on 15 February 2010 in accordance with section 132 of the BCCM Act. The applicant submits that in their letter dated 11 December 2009 the respondents were on notice that the applicant considers the reviewable terms not currently fair and reasonable.

1. The applicant’s letter to the respondents dated 4 February 2010 (but received by the respondents on 5 February 2010) requests that the respondents pass the necessary resolutions to adopt the review recommendations no later than 5 February 2010. That letter included a copy of an amended Deed of Variation. That letter also noted that if the resolution was not passed by the respondents the parties would be in dispute.

1. The applicant submits that the respondents have not deposed as to any steps taken by them in considering the review advice, nor calling any ordinary or extraordinary general meeting in the time between receiving the review on 5 February 2010 and the end of the review period 15 February 201 (being 14 days).

1. The applicant submits that the applicants did all that was required by the BCCM Act in obtaining the review advice, giving the review advice to the respondent and informing the respondent that the applicant did not consider the current terms of the agreement fair and reasonable.

1. The applicant submits that the onus was on the respondent to show that it has complied with its obligation to finish the review in accordance with section 132 (4) of the BCCM Act and that they have failed to do so.

The respondent’s submission

1. The respondent relies on Paragraph E of their response and counter claim in this preliminary issue.

1. The respondent submits that the Tribunal has no jurisdiction to determine the application as there is no dispute between the parties in accordance with Section 133 of the BCCM Act which provides as follows:

(1)This section applies if a dispute arising out of a review carried out, or required to be carried out, under this division exists between the reviewing parties.

(2)A reviewing party may apply--

(a)   under chapter 6, for an order of a specialist adjudicator to resolve the dispute; or

(b) as provided under the QCAT Act, for an order of QCAT exercising the tribunal's original jurisdiction to resolve the dispute.

(3)The specialist adjudicator or QCAT must have regard to the review criteria in deciding the application.

(4)Subsection (5) applies if only 1 of the reviewing parties has carried out the review.

(5)A dispute is taken to exist between the reviewing parties, and to have arisen in the way mentioned in subsection (1), if the reviewing party who carried out the review considers the reviewable terms are not currently fair and reasonable.

1. The respondent submits that the applicant is responsible for the respondent’s failure to comply with the review period. The respondent submits that the applicant did not provide the review advice in a timely manner to allow them to call and hold a general meeting to make a final decision of the review.

1. The respondent submits that the time frame between their receiving the review and the applicant filing a dispute in the Queensland Civil and Administrative Tribunal meant that they could not comply with the requirements of notice as set out in Section 72 of the Body Corporate and Community Management (Accommodation Module) regulation 2008.

1. The respondent submits that the obligation to comply with the time limits falls on the applicant to provide the review advice so as to allow adequate time for the respondent to respond.

1. The respondent submits that they have not been afforded an opportunity to respond to the review advice and it is not just and equitable to be forced to participate in review proceedings.

1. The respondent finally contends that should the applicant not be dismissed by the Tribunal, caretaking service contractors will hold bodies corporate to ransom under Section 133 BCCM Act by forcing them into time consuming and costly disputes without affording the opportunity to participate as envisaged by Part 2 Division 7 of the BCCM Act.

Findings

1. The review document was forwarded to the respondent on the 5 February 2010. The period of the review process expired on 15 February 2010. The Act requires that the respondent deal with the review document as soon as reasonably practicable (section 132 (4)). The Act further requires the respondent to comply with the review by ordinary resolution at a general meeting (section 132(3)).

1. The timetable required for a general meeting is set out in Body Corporate and Community Management (Accommodation Module) Regulation 2008 Section 72 requires that a general meeting be held with 21 days notice. Section 65 sets out the requirements for an extraordinary general meeting which must be held within 14 days of the notice.

1. For the respondent to have called either an ordinary or extraordinary meeting to consider the review document in a reasonably practicable manner and comply with the provisions of Section 132(3) of the BCCM Act they would have required more than the 14 days provided to them by the applicant.

1. The respondent has not been afforded a time that has allowed them to consider the review document in a reasonably practicable time frame or one that would permit the Body Corporate to respond to the applicant’s request to consider the review advice.

1. Whilst the respondent has not deposed as to any of the correspondence or attempts to call such a meeting in accordance with Section 132(3), the Tribunal nevertheless finds that the Tribunal cannot exercise its jurisdiction in accordance with Section 133 of the BCCM Act.