QLD: Q&A A Recipe for Failure – Lodging an Adjudication Application

This article about lodging an Adjudication Application with the Commissioner has been supplied by Michael Kleinschmidt, Bugden Allen Graham Lawyers.

Table of Contents:

• QUESTION: What process should the committee follow when responding to an application for conciliation?
• QUESTION: I’m a lot owner who has taken the Body Corporate to Conciliation about not enforcing by-laws. If we proceed with adjudication, where does this leave us when we are not familiar with the legalities?
• ARTICLE: A Recipe for Failure – Lodging an Adjudication Application

Question: What process should the committee follow when responding to an application for conciliation?

We received two similar questions that have been combined into this one article.

Question 1:

At a recent BCC meeting the committee by a vote of 4 for and 1 against approved an application for installation of pavers and additional stormwater drainage to drain into the original stormwater drainage.

The committee member who voted against will not accept the majority vote and has now registered a conciliation application against the committee with the Office of the Commissioner for the BCCM for the decision to be overturned. The applicant is nominated as a committee member and the respondent as the committee.

The BCCM provides for either a lot owner with 50% of the body corporate or the affected lot owner can make an application in writing to the body corporate secretary to challenge the decision made by the committee.

The committee believes this is the process that must be followed before any conciliation application can be made.

Are we correct in our understanding of the process and if so can we have the application rejected?

Question 2:

The committee has received a conciliation application with the secretary as the applicant wanting a decision reversed from a previous BCC meeting.

In the application, the secretary admits secretly recording the meeting and quotes from that recording.

Should the Committee notify the Commissioner and request the application be refused? Can we take legal action because of recording secretly and quoting in the application?

Answer: When someone lodges an application for conciliation, the onus rests on them to ensure their application is legislatively compliant

Let’s go back a few steps.

When someone lodges an application for conciliation, the onus rests on them to ensure their application is legislatively compliant, and the Commissioner and her delegates have the decision-making power as to whether to accept an application (i.e., it is compliant) or reject it (i.e., because it hasn’t met all requirements).

You can request the Commissioner reject the application and you’d need to state your reasons. If the Commissioner declines your request and accepts the application, then your next decision is whether you would participate in the conciliation session. Participation is voluntary and it seems from the tone of your emails that you would rather not participate. I would urge you to look at conciliation as an opportunity rather than something to resist and find reasons to have rejected. Conciliation has a proven track record in getting workable agreements for parties which then enable them to get on with their affairs. It’s also an opportunity to learn, as a conciliator also has a role to provide information to parties.

In relation to your specific queries:

• An applicant must attempt to resolve things themselves prior to lodging an application. The ‘50%’ process you describe can be seen as a reasonable attempt to self-resolve, but it’s certainly not the only way a dispute gets resolved and the Commissioner may decide that the applicant has already demonstrated other, reasonable attempts to resolve the matter
• The fact that the meeting was recorded without your knowledge, seemingly, is not of itself reason to reject the application. You can absolutely raise that as an issue if you wish. In relation to taking legal action about the recording, you’d need to obtain qualified legal advice

Chris Irons
Hynes Legal
E: chris.irons@hyneslegal.com.au
P: 07 3193 0500

This post appears in the September 2021 edition of The QLD Strata Magazine.

Question: I’m a lot owner who has taken the Body Corporate to Conciliation about not enforcing by-laws. If we proceed with adjudication, where does this leave us when we are not familiar with the legalities?

As a lot owner who took the Body Corporate to Conciliation about not enforcing by-laws (issuing breach notices to a lot owner for several infringements one of which could ultimately prove costly to all lot owners) I’ve found the below article very interesting.

The Body Corporate has of course still done nothing so we are now left with adjudication. We are fearful, as adjudication is our only avenue. If we do not get a good outcome, where does this leave us when we are not familiar with the legalities? We have had quotes to help us, but they are simply nothing we can afford.

Answer: There are a few options which I summarise below in ascending order of the amount of support you would need from your fellow lot owners

I assume that conciliation was not successful, as you still need help.

In a situation like this, there are a few options which I summarise below in ascending order of the amount of support you would need from your fellow lot owners:

1. Adjudication – you can have a shot at this yourself, as the system is designed for it. If you do need legal representation, try sharing the cost with neighbours.

2. Call an EGM – with 25% of the owners, you can call an EGM and propose a motion that the Body Corporate enforce the by-laws. At worst the issue is discussed and at best the committee must comply with the motion if it passes.
3. Replace the committee – either at the next AGM, or at an EGM. you don’t need all of the positions, just enough to carry a vote (typically 4 out of 7).

Finally, it’s also useful to put the committee on notice. The committee members are only protected from civil liability if they act without bad faith and negligence. So, if you put them on notice of what can happen if they refuse to enforce the by-laws, you should then also ask them to circulate the legal advice that they are relying on, to chose not to enforce the by-laws.

If they have not obtained advice, and the by-law breaches are serious and / or obvious, then they are at risk of being personally liable if something goes very wrong.

Hope that helps

Michael Kleinschmidt
Bugden Allen Graham Lawyers
E: michael.kleinschmidt@bagl.com.au
P: 07 5406 1280

QLD: A Recipe for Failure – Lodging an Adjudication Application

If you lodge an Adjudication Application with the Commissioner, be careful what relief you ask for, and how you ask for it. If you get either of those things wrong, then your Application may be thrown out.

The recent decision of QCAT in Rolling Rock Nightclub Pty Ltd v Commissioner for Body Corporate Community Management [2020] QCAT 435 has imposed strict requirements on Adjudication Applications.

Most Adjudicator’s orders are made under one of two order making powers. First, schedule 5 of the Body Corporate and Community Management Act 1997. Second, under section 276(2) of the Act.

Under schedule 5, an Adjudicator can choose orders from a list; for example, an order that an animal being kept on the common property, or a lot, contrary to the by-laws, must be removed from the scheme land. Under section 276(2) an Adjudicator may make whatever order is ‘just and equitable in the circumstances to resolve the dispute’.

Some years ago, the decision of Wheeler & Smith v Body Corporate for Calypso Towers [2016] QCATA 66, held that an Adjudicator’s order making power under section 276(2) was limited to relief known to the law. That is, an adjudicator could not make a novel ‘Judge Judy’ style order, such as ordering a litter bug to spend a day picking up all the rubbish on the common property.

The decision in Rolling Rock took this principle one step further. If, as an Applicant, you weren’t asking for an order from schedule 5 (as happens in most Adjudication Applications), then the orders sought had to be supported by a ‘cause of action’, as that phrase is known to the Courts, detailed within your Adjudication Application.

A simple analogy for this is baking a cake. All of the known ‘causes of action’ make up the legal recipe book and each type of ‘order’ for relief is a dish. Each dish has a recipe. If you have the right ingredients and you follow the recipe, then you end up with the dish.

Let us say that one of the ‘dishes’ in the recipe book is chocolate cake. If the relief that you are after in your Adjudication Application is a chocolate cake, then your Adjudication Application must have all of the necessary ingredients in it, e.g. sugar, flour, egg, cocoa powder etc.

If your Adjudication Application sought a chocolate cake but only contained the ingredients for a sponge cake, then that’s not good enough; your Adjudication Application is liable to be thrown out by the Commissioner or (successfully) objected to by a Respondent.

Until Rolling Rock, to perhaps strain the analogy, an Adjudicator could make whatever they liked out of the ingredients that you presented to them, as long as the end result being the dish (i.e. the orders) was in the cookbook.

While this might sound a touch esoteric, it has some very important real-world consequences.

Take the example of a noisy pet. Let us say that your neighbours’ pet dog is approved under the by-laws but is barking all the time, loudly. So much so that you are losing sleep at night. You can bring an Adjudication Application to the Commissioner’s Office alleging a breach of section 167 of the Act, on the basis that the dog is either causing a nuisance or is interfering unreasonably with the use and enjoyment of your Lot. In schedule 5 of the Act, section 19 enables an Adjudicator to make an order that the dog be removed, if the Adjudicator is satisfied that the dog is causing a nuisance or unreasonable interference with the use and enjoyment of your Lot.

Your Adjudication is pretty simple, in that you provide evidence of the dog’s barking and its impact upon you.

You also point to section 167 of the Act and section 19 of schedule 5. Odds are that if you do so, you will get relief.

If you change the facts very slightly, however, things become much more complicated. Instead of a noisy dog, imagine that what is keeping you up at night is an aspiring teenage drummer. There is no specific order making power in schedule 5 for an Adjudicator to order that the teenage drummer stops drumming. So instead, you will have to rely upon the Adjudicator’s general order making power under section 276(2). That is, an Adjudicator to make an order, that is just and equitable in the circumstances to resolve the dispute, that the drummer stops drumming!

That sort of order is known as prohibitory injunction; it is an order requiring a particular person not to engage in a particular activity. The question is, will you have the ‘ingredients’ necessary to get such an order?

Again, in your Adjudication Application you raise a breach of section 167 of the Act. In this case, however, that will not be enough. A mere breach of the Act does not, at the general law, give rise to a ‘cause of action’ which entitles you to prohibitory injunction. Instead, you will need to look for another recipe that will enable you to bake the prohibitory injunction cake.

The recipe that you need is the cause of action of ‘private nuisance’ at common law; that is, an unlawful and unreasonable interference with an occupier’s use and enjoyment of land. Nuisance can be constituted by noise, but the inconvenience caused by the noise needs to result in a substantial degree of interference, according to what is considered reasonable standards for the enjoyment of the premises.

In residential areas the principle of ‘give and take, live and let live’ is customarily applied so that the ‘ordinary and accustomed use’ of premises will not be considered a nuisance, even if some inconvenience to a neighbour is caused. Unit occupiers are people, (most) people have children at some stage and (most) children learn an instrument at some stage – so stop complaining about the noise Karen.

As you can see there are a lot more ingredients to assemble, and the recipe becomes a lot more complicated. While you might still get relief in your Adjudication Application, odds are that even as a competent home cook, you won’t be able to bake the cake by yourself; you’ll probably need the help of an experienced chef (lawyer).

This is the most critical consequence of the Rolling Rock decision. It is very rare for a self-represented Applicant for Adjudication to know the legal causes of action available to them, and how to establish them, with supporting evidence in their Adjudication Application.

While no doubt (some) lawyers will like the extra work, the Commissioner’s dispute resolution service is supposed to be ‘efficient and effective’. Most users of the dispute resolution service are self-represented. While the decisions in Wheeler and Rolling Rock are well reasoned and based on sound legal principles, they have together created substantial hurdles to the efficient and effective resolution of disputes in Community Title Schemes within Queensland.

Stratum Legal can assist you with your adjudication application.

Michael Kleinschmidt
Bugden Allen Graham Lawyers
E: michael.kleinschmidt@bagl.com.au
P: 07 5406 1280

This post appears in Strata News #439.

Have a question about lodging an Adjudication Application with the Commissioner or something to add to the article? Leave a comment below.

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