Warren v Body Corporate for Buon Vista CTS 14325 [2007] QCA 160

SUPREME COURT OF QUEENSLAND

CITATION: Warren v Body Corporate for Buon Vista CTS 14325 [2007] QCA 160

PARTIES: ALEXIA MARGARET WARREN / (appellant/applicant) / v / BODY CORPORATE FOR BUON VISTA COMMUNITY TITLES SCHEME 14325 / (respondent)

FILE NO/S: Appeal No 49 of 2007 / DC No 3280 of 2004

DIVISION: Court of Appeal

PROCEEDING: Application for Leave s 118 DCA (Civil)

ORIGINATING COURT: District Court at Brisbane

DELIVERED ON: 18 May 2007

DELIVERED AT: Brisbane

HEARING DATE: 23 April 2007

JUDGES: de Jersey CJ, Keane JA and Holmes JA / Judgment of the Court

ORDER: 1. Application for leave to appeal is refused / 2. Applicant is ordered to pay the respondent’s costs of and incidental to the application, fixed in the amount of $20,000

CATCHWORDS: APPEAL AND NEW TRIAL – APPEAL - PRACTICE AND PROCEDURE – QUEENSLAND – WHEN APPEAL LIES – BY LEAVE OF COURT – GENERALLY – Body Corporate and Community Management – where District Court partially allowed applicant’s appeal against decision of Office of the Commissioner for Body Corporate and Community Management adjudicator, otherwise dismissing the appeal – where disputation between parties had already consumed considerable time and resources – whether applicant should be granted leave to appeal against District Court decision – whether costs should be awarded on an indemnity basis / REAL PROPERTY – STRATA AND RELATED TITLES AND OCCUPANCY – BODY CORPORATE – POWERS, DUTIES AND LIABILITIES – whether body corporate may validly resolve to ratify past irregular conduct / Body Corporate and Community Management Act 1996 (Qld) / District Court of Queensland Act 1967 (Qld), s 118(3)

COUNSEL: The applicant appeared on her own behalf / S Moody for the respondent

SOLICITORS: The applicant appeared on her own behalf / Herdlaw Solicitors for the respondent

THE COURT: The applicant seeks leave to appeal against a judgment of the District Court given on 30 November 2006. The application for leave was filed on 2 January 2007, which was five days late. There is no sworn explanation for that delay, but it would be relatively inconsequential if the application were otherwise meritorious.

The genesis of the present application is a Magistrates Court judgment of 14 December 2001 in favour of the respondent body corporate. The respondent sued for unpaid levies and associated costs due from the applicant and others as the owners of lot 11. The amount of the levies was however paid by the time of the Magistrates Court determination. The judgment given was therefore confined to a costs order. The costs were ultimately assessed in an amount less than $1,000. Really all that follows is referable to the respondent’s attempts to recover those costs, which gives the present application a particular perspective. Merely cataloguing subsequent events shows how the matter has spiralled out of control, with no doubt substantial costs incurred.

On 20 February 2002, the owners’ appeal from the Magistrates Court decision to the District Court was dismissed with costs. On 7 April 2004, the Court of Appeal dismissed with costs an application by the owners for leave to appeal against the District Court judgment.

An annual general meeting of the body corporate, held on 30 October 2003, by majority passed the four resolutions in issue here: resolution eight ratified instructions given by the body corporate manager to a firm of solicitors, Herd and Janes, to commence the Magistrates Court proceeding; resolution nine ratified an execution of a client agreement with that firm; resolution 10 ratified the execution of a file transfer authority for Herd and Janes’ successor firm, Herdlaw; and resolution 11 confirmed the appointment of Herdlaw as solicitors for the body corporate, authorizing the respondent to affix its seal to a client agreement with Herdlaw, ratifying all instructions given by the manager to Herdlaw, and instructing Herdlaw to act in the appeal proceeding.

The day before that annual general meeting, the applicant, by a proceeding in the Office of the Commissioner for Body Corporate and Community Management, challenged on an interim basis the inclusion of those four motions on the meeting agenda. On 30 October 2003, an adjudicator dismissed her application for interim relief. The applicant subsequently amended her application to include a declaration that the resolutions were void. On 2 August 2004, the adjudicator gave his decision on the applicant’s claim for final relief, by which he authorized the committee of the body corporate to spend monies reasonably necessary to protect the rights or interests of the body corporate in pursuing costs against the owners of lot 11 in respect of the District Court and Court of Appeal proceedings.

The applicant then appealed to the District Court against the adjudicator’s decision of 2 August 2004. Her appeal to the District Court was under s 289(2) of the Body Corporate and Community Management Act 1997 (Qld) ("the Act"). That right of appeal is confined to questions of law. On 30 November 2006 the District Court allowed the appeal to the extent of remitting to the adjudicator, for further consideration, whether resolution 11 was invalid, in respect of future expenditure, because of absence of compliance with s 104 of the Standard Module Regulation. On 7 December 2006, the District Court ordered the applicant to pay the respondent’s costs fixed at $10,000.

On 1 September 2005, an extraordinary general meeting of the respondent had passed a resolution that the body corporate defend the applicant’s District Court appeal against the adjudicator’s decision of 2 August 2004, and retain Herdlaw for that purpose. The owners of lot 11 made application to the Office of the Commissioner for Body Corporate and Community Management in respect of the resolution of 1 September 2005, which application was dismissed on 22 September 2006. On 4 October 2006, the owners of lot 11 appealed against that dismissal to the District Court. That appeal is pending.

The Act sets up a mechanism for the determination of challenges to body corporate resolutions such as these. The applicant has fully utilized that mechanism. In addition, she has fully utilized her right of appeal to the District Court. In these circumstances, in order to secure a grant of leave to appeal, the applicant would need to demonstrate a plain justification, consistent with the interests of justice, why the matter should proceed to a third tier of adjudication, and to that end articulate clearly substantial arguable error with serious ramification, in the District Court judgment.

Were a grant of leave otherwise justified, there is also the feature that the District Court on 30 November 2006 referred resolution 11 back to the adjudicator for further consideration, rendering it arguably inappropriate that this Court embark on a determination of the merits while that process remains unresolved.

So far as the present application concerns the order that the applicant pay the respondent’s costs fixed at $10,000, a review of His Honour’s discretion would not justify a grant of leave, unless his reasoning on the merits of the appeal was plainly wrong.

Because this is an application for leave only, it is unnecessary and would be inappropriate to embark upon any detailed examination of the reasoning behind the District Court judgment. It is a detailed judgment covering some 20 closely typed pages. It suffices now to mention its major planks.

The critical conclusion in the District Court was that as a general proposition, a body corporate may validly resolve to ratify past irregular conduct. The applicant has submitted that the sorts of irregularities of which she complains were not susceptible of such ratification. When pressed, she accepted this formulation: that as a matter of law, a body corporate cannot ratify a decision taken by its agent which did not comply with legislative requirements and was contrary to the management agreement. But the approach taken by the learned Judge was correct and has the support of the well established authority to which he referred, especially at paras 36, 37 and 38 of his reasons for judgment. The applicant was unable to point to any provision of the legislation which excludes such ratification. As to another point, like the adjudicator, that Judge was right not to embark on a separate determination of the validity of the client agreements, separate, that is, from the ratifying resolutions. Such a determination would have been inappropriate because the affected solicitors were not party to the proceeding. Thirdly, as to the validity of the Magistrates Court proceeding absent a special resolution, such a resolution was unnecessary because the claim was plainly for a liquidated debt.

The last paragraph mentions some of the more prominent aspects of the applicant’s approach. There were many other points taken in her written material, and some orally, many of them unparticularised and difficult to comprehend. None as presented gives rise to any seriously arguable ground to impugn the District Court judgment.

It is important that the statutory restriction on the right of appeal to this Court in s 118(3) of the District Court of Queensland Act 1967 (Qld) be observed in any case where disputation between particular parties has already consumed a disproportionate share of the time and resources of the administration of justice, and the disappointed party has already been afforded the opportunity of having her case considered twice by the tribunals ordained by law. It is especially important that this restriction be observed when the history of the litigation suggests that the disappointed party is persisting in an unreasonable determination to continue to litigate even if she is unable to point to a legitimate reason to do so.

The application for leave to appeal should be refused.

There was a separate challenge to the retainer of and payment of fees to the legal representatives acting for the respondent. The body corporate was plainly entitled to retain solicitors to defend itself in these proceedings, thereby incurring a contractual obligation to pay their fees (s 95(1)(a) of the Act).

The respondent seeks an assessment of costs on the indemnity basis, and relies on the irrelevant and unsubstantiated allegations of fraud and misleading conduct made against the respondent. The applicant repeated those allegations of fraud orally before us. In addition, an order for indemnity costs is justified here by the basic unreasonableness of the present application, where the District Court judgment was comprehensively and carefully presented and not shown to have been wrong; where the applicant has been unremitting in her pursuit of the avenues for challenge under the legislation and to the court, largely without success (the primary Judge observed that the applicant’s success before him was “quite limited”, such that the applicant should pay $10,000 of the respondent’s costs); where the applicant has brought this application even before the further determination of the adjudicator upon the remission of the matter to him has been carried out; and where the genesis of the matter concerned the failure of the owners of lot 11 to pay costs assessed in the Magistrates Court at less than $1,000. The compelling conclusion is that the applicant has acted unreasonably in the matter.

At the conclusion of the hearing of the application, the parties were directed to furnish submissions as to the costs incurred by the respondent, against the possibility the Court might be minded to fix the costs payable by the applicant, in the event the application were refused. The Court’s direction was expressly limited to submissions on amount. Unfortunately, the applicant misunderstood the direction and provided the Court with 21 pages of submissions and further affidavit material the bulk of which was directed, not to the proper quantum of the respondent's costs, but to the alleged impropriety of the conduct of the respondent's solicitors in relation to these and associated proceedings. To the extent the applicant’s further material is not responsive to the Court's direction, the Court has ignored the material, save that its bulk and tendentiousness has served to convince us that the respondent should not be put to the hardship of the delay and expense of an assessment process.

According to the information provided by the respondent, comprehensively particularised and verified on affidavit, the actual expenditure by the respondent in connection with the application is $23,249.38. Taking an appropriately broad view, the amount of the indemnity costs to which the respondent is entitled should be fixed at $20,000.

The application for leave to appeal is refused, and the applicant is ordered to pay the respondent’s costs of and incidental to the application, fixed in the amount of $20,000.