This article is about a QLD adjudicator’s decision clarifying when a body corporate debt becomes payable and its impact on committee voting rights.
When does a debt become a debt?
This adjudicator’s order considered if committee members were able to vote upon a motion if levies notices had been issued but were not due yet. The applicant asked for orders declaring a vote to replace the roof to be void, and for an interim order temporarily stopping the roofing works until further notice.
The applicant’s nominee is on the committee, but they did not cast a vote. The applicant argued that all committee members who did vote were unable to as they owed body corporate debts. The legislation does provide that a committee member who owes a debt is unable to vote on committee motions.
The adjudicator stated at [12]:
On the applicant’s interpretation, all owners would owe body corporate debts from the time of the AGM, as that is when dates are set “on or before which payment of each instalment is required”. Owners would “owe” contributions to the body corporate from that time and could not vote at committee or general meetings until they paid the year’s contributions in advance.
Further on, at [14] and [16] they stated:
Early payment is possible and encouraged, but the substantive obligation that is created by fixing a date “on or before which” payment must be made is not to delay payment until after that date. There is no obligation to pay before the due date such that an owner could be said to “owe” contributions (and therefore a body corporate debt) before that date has arrived.
On the applicant’s interpretation, owners could lose their right to vote at committee and general meetings at a time when they would still qualify for a discount for timely payment of contributions. That cannot be right.
Towards the end of the order, the adjudicator did acknowledge that the applicant’s position could be arguable. However, they could not accept the interpretation in the context of the Standard Module.
In short, the interim order was dismissed, and final orders have not yet been handed down.
Commissioner for Body Corporate and Community Management
P: Information Service Freecall 1800 060 119
This post appears in Strata News #765.
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This article has been republished with permission from the author and first appeared on the Commissioner for Body Corporate and Community Management website.
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