The Body Corporate for Paradise Sands CTS 14989 v Foresight Acquisitions Pty Ltd
[2013] QCATA 118
•22 April 2013
| CITATION: | The Body Corporate for Paradise Sands CTS 14989 v Foresight Acquisitions Pty Ltd [2013] QCATA 118 |
| PARTIES: | The Body Corporate for Paradise Sands CTS 14989 (Applicant/Appellant) |
| v | |
| Foresight Acquisitions Pty Ltd (Respondent) |
| APPLICATION NUMBER: | APL063-12 |
| MATTER TYPE: | Appeals |
| HEARING DATE: | On the papers |
| HEARD AT: | Brisbane |
| DECISION OF: | Richard Oliver, Senior Member |
| DELIVERED ON: | 22 April 2013 |
| DELIVERED AT: | Brisbane |
| ORDERS MADE: | Leave to appeal is refused |
| CATCHWORDS: | Minor Civil Dispute – where sale of all units in a the complex to a third party – where Body Corporate failed to pay for cleaning services – where new purchaser was not told of existing debt – whether Body Corporate liable for the debt. Queensland Civil and Administrative Tribunal Act2009, s 142(3) Cachia v Grech [2009] NSWCA 232 McIver Bulk Liquid Haulage Pty Ltd v Fruehauf Australia Pty Ltd [1989] 2 Qd R 577 QUYD Pty Ltd v Marvass Pty Ltd [2009] 1 Qd R 41 |
APPEARANCES and REPRESENTATION (if any):
This matter was heard and determined on the papers pursuant to s 32 of Queensland Civil and Administrative Tribunal Act2009 (QCAT Act).
REASONS FOR DECISION
The Paradise Sands Apartment complex comprises 45 strata titled units located at Surfers Paradise. The applicant is the Body Corporate of that community title scheme. The complex has been in existence now for about 40 years.
In September 2006 Foresight Acquisitions Pty Ltd purchased the management and letting rights for the complex from Allan & Patricia Crane. The contract for the purchase included an assignment of the management and letting rights as well as a Deed of Engagement. By the Deed of Engagement the Body Corporate agreed to pay Foresight for the caretaking and management of the complex.
Between April 2006 and 6 October 2009 Foresight provided those services at a monthly fee which started at $3,183.60 per month and eventually increased to $3,645.19 per month by 31 July 2009.
A reconciliation prepared by Foresight shows that the Body Corporate paid the monthly fee on a regular basis until mid 2007. There were no further payments until October 2009 when a lump sum payment of $57,009.78 was paid off the running account. By 3 December 2009 there was a balance of $14,821.96 outstanding according to the reconciliation. These fasts are not disputed.[1]
[1] Affidavit of Craig Andrew Perry filed in the MCD proceeding sworn 1 November 2011.
There is also no dispute about the finding of fact that services were provided to the Body Corporate in this period. The evidence to support this can be found in an affidavit sworn by Brett Sutton on 22 November 2011. Also it is to be noted that the Body Corporate did not lead any evidence at the hearing.
As the outstanding debt was not paid, Foresight commenced a proceeding in the minor civil disputes jurisdiction of the Tribunal to recover the outstanding amount. A hearing was conducted on 1 November 2011 and on 27 January 2012 the Tribunal ordered that the Body Corporate of Paradise Sands pay to Foresight $12,553.23 within 30 days.
The Body Corporate has filed an application for leave to appeal or appeal the decision of the Tribunal on 23 February 2012. The grounds of appeal are that there was no evidence from which it could reasonably be inferred that Foresight demanded payment of the account from the Body Corporate on the evidence before the Tribunal; the Body Corporate says that it was not open for the Tribunal to find that there was a binding and enforceable agreement or debt between the Body Corporate and Foresight; and that the Tribunal acted “ultra vires” and contrary to the provisions of the Body Corporate and Community Management legislation and specifically the Body Corporate and Community Management (Standard Module) Regulation 2008. The orders sought by the Body Corporate are that the Tribunal’s decision be set aside.
Because this is an appeal from a decision in the minor civil disputes jurisdiction, leave to appeal is necessary.[2] The question whether or not leave to appeal should be granted is usually addressed according to established principles: Is there a reasonably arguable case of error in the primary decision?[3] Is there a reasonable prospect that the applicant will obtain substantive relief?[4] Is leave necessary to correct a substantial injustice to the applicant caused by some error?[5] Is there a question of general importance upon which further argument, and a decision of the appellate court or tribunal, would be to the public advantage?[6]
[2] QCAT Act, s142(3).
[3] QUYD Pty Ltd v Marvass Pty Ltd [2009] 1 Qd R 41.
[4] Cachia v Grech [2009] NSWCA 232 at 2.
[5] QUYD Pty Ltd v Marvass Pty Ltd [2009] 1 Qd R 41.
[6]Glenwood Properties Pty Ltd v Delmoss Pty Ltd [1986] 2 Qd R 388 at 389; McIver Bulk Liquid Haulage Pty Ltd v Fruehauf Australia Pty Ltd [1989] 2 Qd R 577 at 578, 580.
The learned Adjudicator, in his decision, succinctly grasped the issues that required determination. He addressed the validity of the assignment, the exercise of the option and importantly found that Foresight carried out the work in accordance with the caretaking and management agreement and was therefore entitled to payment.
This last point seems to me to be the central issue in the case. Over a period of some three years there was established a course of conduct between the applicant and the respondent. Foresight would do the managing and caretaking work and would be paid by the respondent for that work. Once that finding of fact is made, it is difficult to see why there should not be an entitlement to payment irrespective of the validity or otherwise of the assignment or the exercise of the option that Foresight would carry out the work and be paid for that work as the learned Adjudicator found. In fact, in the submissions filed by the applicant there is no challenge to the finding that the management and caretaking work was undertaken by Foresight.
The mortgagee of the complex appointed external Controllers solely for the purposes of selling all of the units in the complex. Australian Unit Administration was appointed by the Controllers to manage the complex pending the sale of the units. Minter Ellison were the solicitors for the purchasers of the units, Ridong (Gold Coast) Development Pty Ltd. They were also the solicitors for the Body Corporate. The main complaint from the Body Corporate is that the Foresight failed to notify its solicitors of the outstanding charges owed by the Body Corporate at or before settlement of the sale of units to Ridong. The respondent did notify AUA of the outstanding charges but the applicant says that by only notifying AUA, the respondent knew or ought to have known that it was unlikely that the outstanding charges would come to the attention of Minter Ellison.
As a result, the effect of all of this is that the outstanding balance did not come to the attention of Ridong and therefore was not taken into account when settlement of the sale occurred. The applicant contends that Foresight should have told the Controllers of the outstanding debt and made demand from them because they were in possession of the property and in control of the Body Corporate, through AUA.
The learned Adjudicator dealt with the issue of failure to notify and was critical of Foresight in only notifying AUA and found, this of itself, did not give rise to any defence to the debt. I can only agree with this observation.
All of the contentions of the applicant go to questions of unfairness bordering on sharp practice in remaining silent as to the existence of debt as the sale of the units proceeded to settlement. That is because Foresight knew, that once settlement occurred, it could then recover the debt from the Body Corporate which would be controlled by the new purchaser. The Body Corporate, under the new management, says that it has lost the advantage of negotiating the debt, or paying the debt at settlement.
No authority is cited for any of the propositions put by the applicant that this unfairness relieves the Body Corporate of any liability to pay for the undisputed services rendered to it by Foresight. Once again these matters were considered by the learned Adjudicator and he came to the conclusion and as a matter of law the debt was still payable whether the claim was made upon the temporary manager’s of the Body Corporate, AUA, on the receivers or on Ridong. There is no error apparent in this reasoning. Change of ownership of the individual units and control of the Body Corporate is irrelevant to this issue.
In short, the facts demonstrate that Foresight carried out the work and was paid from time to time by the Body Corporate for the work it carried out. There is no contest to the fact that the work was carried out and therefore Foresight is entitled to payment of the outstanding balance.
The applicant also contends that there was an error of law because the learned Adjudicator failed to conclude that the agreement between the applicant and the respondent was void because there was non compliance with s 116 of the Regulation Module under the Body Corporate and Community Management Act. Section 116 says that the engagement of a service contractor is void if it does not comply with subsection 2. Subsection 2 provides that the engagement must be in writing, must state the term of authorisation, the types of services to be carried out and a basis of working out the payment for the services provided.
The original agreement was entered into between Mr Heslop and the Body Corporate in July 2001 was then assigned to Mr and Mrs Cram and as stated above by the Deed of Engagement was assigned to Foresight. The Crams engagement was only to June 2009 and therefore, the applicant submits that any valid engagement of the respondent concluded in June 2009 assuming a valid assignment. Even if this contention is correct, the fact is that the Body Corporate continued to use the services of Foresight until the appointment of the receiver without complaint that it should not have to pay because there was no effective engagement in writing. It seems to me that by continuing to engage the services of Foresight the Body Corporate would now be estopped from relying on the deed to avoid payment.
It is also relevant that s 13 of the QCAT Act imposes an obligation on the Tribunal to make orders that it considers fair and equitable to the parties to the proceeding to resolve the dispute. The learned Adjudicator’s reasons demonstrate that he has discharged this obligation. I have not been able to discern any error in the learned Adjudicator’s reasoning nor the findings of fact upon which his decision has been based. There is no substantial injustice and therefore leave to appeal must be refused.
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