Appointing an Administrator to a Body Corporate
By Daniel Wignall and Emily Dinsey16 Oct 2015
You have been fighting an uphill battle against the Body Corporate in the Office of the Commissioner for Body Corporate and Community Management (Commissioner’s Office) for what feels like an eternity. Finally – you receive the Adjudicator’s Order. Victory! Problem solved. Right? Not necessarily…
When the Body Corporate fails to comply with an order
The recent case of Body Corporate for Donnelly House CTS37465 v Shaw  QDC 139 (Donnelly House Case) demonstrates how an Adjudicator’s Order isn’t always enough to make a Body Corporate comply.
In that case, the Donnelly family owned four of six lots in a Scheme with Mr and Mrs Shaw owning one of the two remaining lots. The building was structurally deficient which led to significant water leakage into Mr and Mrs Shaws’ Lot.
Despite the Body Corporate’s legal obligation to rectify the building defects on common property pursuant to section 152 of the Body Corporate and Community Management Act 1997 (the Act), the Body Corporate failed to do so. Left with no other option, the Shaw’s made an application to the Commissioner’s Office for adjudication. Despite successfully obtaining an Adjudicator’s Order (in late 2012), that the Body Corporate must promptly rectify the building’s defects, the Body Corporate failed to do so. Two and a half years passed, the defects remained unrectified and water continued to leak into the Shaw’s Lot.
Appointing an Administrator
When a Body Corporate fails to carry out its obligations pursuant to an Adjudicator’s Order, the Act gives both Adjudicators and Magistrates the power to appoint an Administrator to the Body Corporate.
An Administrator essentially steps into the shoes of the Body Corporate and has the power to carry out the obligations the Body Corporate has failed to perform.
In 2015 the Shaw’s successfully applied to the Magistrates Court for an Administrator to be appointed to the Body Corporate to effect the repairs to the building pursuant to the Adjudicator’s Order (the Magistrates Court Order).
At the root of the Donnelly House Case was an appeal by the Body Corporate against the Magistrates Court Order.
The Appeal Judge upheld the decision of the Magistrates Court which now provides us with clear guidance on the circumstances in which a Court will appoint an Administrator to a Body Corporate.
Matters a Court will consider in determining whether to appoint an Administrator include:
- whether the affected Lot Owner is a minority Lot Owner;
- whether the affected Lot Owner has attempted to resolve the dispute;
- the period of time over which a Body Corporate has failed to comply with an Order; and
- factionalism or hostility between Lot Owners.
Appointment via Adjudicator vs Magistrates Court
The general rule of thumb is that if there is already an Order in place compelling the Body Corporate to take specific action (whether it be an Adjudicator’s Order, an order of a Tribunal or the Court) and the Body Corporate has failed to comply with that Order, then the appointment of an Administrator should be sought in the Magistrates Court.
If, however, there is no Order in place, or the Order in place does not place strict obligations on the Body Corporate, then the appointment of an Administrator must be sought from the Commissioner’s Office by way of an adjudication application.
Appointment is not only available to Lot Owners
There are other circumstances in which someone, aside from a Lot Owner, may seek to have an administrator appointed to a Body Corporate.
For example, Body Corporates often engage external contractors to perform works within the Scheme, whether it be building works or for the provision of professional services. Unfortunately, in some circumstances (just like any other customer) after the works are completed the Body Corporate may fail to pay the bill.
In these circumstances, once an Order is obtained for payment of the amount owing, the Order can be enforced by applying to the Magistrates Court for the appointment of an Administrator. Once again, the Administrator will step into the shoes of the Body Corporate, but this time, for the purpose of utilising the Body Corporate’s bank accounts to pay the amount owing or (if the accounts have insufficient funds) strike the necessary levies against the lot owners to secure the funds to pay the amount owing.
If you need assistance getting your Body Corporate to fulfil their obligations or if you are a Body Corporate and the appointment of an Administrator has been raised, we would be happy to help.