There is a common myth that orders made by Adjudicator’s are not worth the paper they’re written on. Not only is this myth untrue, but the consequences for non-compliance can be severe. This was the case recently for two individuals who deliberately disobeyed an Adjudicator’s Order over a prolonged period of time. Both were brought before the Magistrates Court and ordered to pay fines and costs of more than thirty-thousand dollars ($30,000.00). This article will discuss that case in more detail, as well as cover what an Adjudicator’s Order is and the risks of non-compliance, both for individuals and Bodies Corporate.

 

Adjudicators’ Orders

For Bodies Corporate governed and established by the Body Corporate and Community Management Act 1997 (BCCMA), the Office of the Commissioner for Body Corporate and Community Management has exclusive jurisdiction to deal with most disputes.

Disputes are usually dealt with by way of conciliation or adjudication.

Conciliation is a more informal process that encourages parties to resolve their dispute with the assistance of a conciliator.

Adjudication is a more formal process, not dissimilar to Court proceedings. Whilst the parties are still encouraged to resolve the dispute themselves, if they cannot, an Adjudicator may make orders.

 

Failure to Comply with an Adjudicator’s Order

Section 288 of the BCCMA sets out in detail what happens if an Adjudicator’s Order is not complied with. In broad terms, however, the Magistrates Court has the power to issue fines and make costs orders.

The maximum penalty for individuals is 400 penalty units, which equates to a maximum fine of about $52,000.00.

If a Body Corporate fails to comply with an Adjudicator’s Order, a five-times multiplier is applied, meaning a maximum fine of about $260,000.00.

Costs orders may be made in addition to any fines.

 

Recent Decision

There is a common myth that Adjudicator’s Orders are rarely enforced and that fines for non-compliance are never handed out.

Unfortunately, two individuals associated with the Body Corporate for Society House learned the hard way that some myths are untrue. The individuals were the former administrator for the Body Corporate, David Yeates, and the former secretary of the Body Corporate, Angela Walker.

On 20 April 2017, Mr Yeates and Ms Walker were ordered by an Adjudicator to provide the Body Corporate’s books and records to an external administrator.

They refused to do so, despite the Adjudicator’s Order and repeated requests to comply with it.

An application was eventually made to the Southport Magistrates Court.

On 30 August 2018, Magistrate Finger ordered that Mr Yeates’ failure to hand over the books and records constituted “deliberate disobedience of the order of the adjudicator.” He was ordered to pay a fine of $3,000.00 plus $11,000.00 in costs.

Magistrate Finger fined Mrs Walker $7,000.00, noting her “prolonged disobedience” as an aggravating factor. Mrs Walker was also ordered to pay $11,000.00 in costs.

So in total, Mr Yeates and Mrs Walker had to pay a whopping $32,000.00 as a result of not complying with an Adjudicator’s Order.

If you’re interested in reading the whole decision, the citation is Society House [2018] QBCCMCmr 425 (28 August 2018).

 

Lessons

The lessons here are that Adjudicator’s Order must be complied with and failing to comply with them is extremely risky, especially for Bodies Corproate and corporations due to the five-times multiplier.

 

 

This article was contributed by Mario Esera, Partner – HWL Ebsworth Lawyers

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