Riverdance Apartments [2007] QBCCMCmr 35 (22 January 2007)

Last Updated: 9 February 2007

REFERENCE: 0521-2006

ORDER OF AN ADJUDICATOR

MADE UNDER PART 9 OF CHAPTER 6

BODY CORPORATE AND COMMUNITY MANAGEMENT ACT 1997

Number of Scheme:	25886
Name of Scheme:	Riverdance Apartments
Address of Scheme:	62-68 River Esplanade MOOLOOLABA QLD 4551

TAKE NOTICE that pursuant to an application made under the abovementioned Act by

Munya Lake Pty Ltd, the Owners of Lot 24

I hereby order that the application for orders: The outcome sought by the applicants is an adjudication of the matters in dispute as between the Applicant and the Body Corporate. Specifically, the outcome sought by the Applicant, is for the overturning of the Body Corporate Committee's decision, of 14 August 2006, not to make resolutions issuing remedial action notices as requested by the Applicant. The Applicant seeks to have that decision made, and an order directing the Committee to pass the following motions:- (a) that a remedial action notice be given to Mr and Mrs Brownlie for contravention of the code of conduct for a caretaking service contractor for;  failing to act honestly, fairly and professionally in performing heir functions under their engagement, as demonstrates (sic) by the conduct particularised in paragraphs (a) to (n) under the heading "Conduct on the Part of the Brownlies Amounting to Breaches"  engaging in unconscionable conduct in performing their function under their engagement, by engaging in the conduct identified in paragraphs (a) to (n) previously outlined (b) that a remedial action notice be given to Mr and Mrs Brownlie for a contravention of the code of conduct for letting agents on the basis of the Brownlies engaging in unconscionable conduct in the letting agent business by using unfair tactics against our clients, as identified in paragraphs 18 under the heading "Conduct on the Part of the Brownlies Amounting to Breaches" as identified herein; (c) that a remedial action notice be given to Mr and Mrs Brownlie for engaging in misconduct, being that conduct identified in paragraphs (a) to (n) under the heading "Conduct on the Part of the Brownlies Amounting to Breaches" herein; (d) that a remedial action notice be given to Mr and Mrs Brownlie for failing to carry out the duties under the caretaking contract, as identified in paragraphs (n) to (o) under the heading "Conduct on the Part of the Brownlies Amounting to Breaches" herein previously identified herein; (e) that a general meeting be called and that a motion be put to the general meeting, to be determined by ordinary resolution held by secret ballot, that the Brownlies, as letting agents, be given a code contravention notice, on the basis of the conduct identified in paragraphs (a) to (o) herein under the heading "Conduct on the Part of the Brownlies Amounting to Breaches". is dismissed.

STATEMENT OF ADJUDICATOR’S REASONS FOR DECISION - REF 0521-2006

"Riverdance Apartments" CTS 25886

Riverdance Apartments community titles scheme (Riverdance Apartments) consists of 24 lots and common property. The community management statement for Riverdance Apartments indicates that the Body Corporate and Community Management (Accommodation Module) Regulation 1997 (Accommodation Module) applies to the scheme. Department of Natural Resources and Water records show the scheme is registered as Survey Plan 107432.

APPLICATION

Pursuant to the Body Corporate and Community Management Act 1997 (Act), this application was made by Munya Lake Pty Ltd, owner of Lot 24 (applicant) on 10 July 2006. The applicant sought orders against the Body Corporate for Riverdance Apartments (respondent) in the following terms:

The outcome sought by the applicants is an adjudication of the matters in dispute as between the Applicant and the Body Corporate.

Specifically, the outcome sought by the Applicant, is for the overturning of the Body Corporate Committee's decision, of 14 August 2006, not to make resolutions issuing remedial action notices as requested by the Applicant.

The Applicant seeks to have that decision made, and an order directing the Committee to pass the following motions:-

(a)	that a remedial action notice be given to Mr and Mrs Brownlie for contravention of the code of conduct for a caretaking service contractor for;
	failing to act honestly, fairly and professionally in performing heir functions under their engagement, as demonstrates (sic) by the conduct particularised in paragraphs (a) to (n) under the heading "Conduct on the Part of the Brownlies Amounting to Breaches"
	engaging in unconscionable conduct in performing their function under their engagement, by engaging in the conduct identified in paragraphs (a) to (n) previously outlined
(b)	that a remedial action notice be given to Mr and Mrs Brownlie for a contravention of the code of conduct for letting agents on the basis of the Brownlies engaging in unconscionable conduct in the letting agent business by using unfair tactics against our clients, as identified in paragraphs 18 under the heading "Conduct on the Part of the Brownlies Amounting to Breaches" as identified herein;
(c)	that a remedial action notice be given to Mr and Mrs Brownlie for engaging in misconduct, being that conduct identified in paragraphs (a) to (n) under the heading "Conduct on the Part of the Brownlies Amounting to Breaches" herein;
(d)	that a remedial action notice be given to Mr and Mrs Brownlie for failing to carry out the duties under the caretaking contract, as identified in paragraphs (n) to (o) under the heading "Conduct on the Part of the Brownlies Amounting to Breaches" herein previously identified herein;
(e)	that a general meeting be called and that a motion be put to the general meeting, to be determined by ordinary resolution held by secret ballot, that the Brownlies, as letting agents, be given a code contravention notice, on the basis of the conduct identified in paragraphs (a) to (o) herein under the heading "Conduct on the Part of the Brownlies Amounting to Breaches".

PROCEDURAL MATTERS

In September 2006 the Commissioner’s Office attempted to organise a conciliation session to assist in the resolution of this dispute. Unfortunately all parties did not agree to conciliation.

Under section 243 of the Act, a copy of the application was provided to the Body Corporate and to all owners, with an invitation to the committee and all owners to respond to the matters raised in the application. A submission was made on behalf of the Committee and by 11 owners. The applicant inspected the submissions received and made a written reply (see sections 246 and 244 of the Act respectively).

A dispute resolution recommendation was made referring the dispute to departmental adjudication.

MATTERS IN DISPUTE

The application relates to the applicant’s concerns about the caretaking service contactor and the failure of the Body Corporate to address these concerns. The facts of the dispute, as outlined in the application, submissions and reply to submissions, can be summarised as follows.

Andrew and Lisa Brownlie are engaged as the service contractor and letting agent (caretaking service contractor) for the scheme, having purchased in March 2004. The applicant, whose principals James and Jill Graham occupy their lot, claims the Brownlies are seeking to force them out of their lot (either by selling or making it available for letting) with a view to increasing the letting pool. They allege the Brownlies do not want any permanent residents in the complex. The application claims the Grahams have been subject to ongoing intimidation.

The applicant alleges that the Brownlies are in breach of the Act, their caretaking agreement, the Code of conduct for body corporate managers and caretaking service contractors^[1] and the Code of conduct for letting agents^[2]. The conduct complained of includes:

	the Grahams being subjected to verbal abusive on several occasions when they sought to raise concerns such as pumps not working and pool noise;
	guests of the applicant being subjected to verbal abuse or treated differently to other visitors to the scheme, including being refused access to the visitors’ carpark;
	incidents of Jill Graham being subject to intimidation by Andrew Brownlie and having her use of the scheme affected, for example by him blocking her vehicle and lift access;
	the applicant being subjected to offensive gestures by the Brownlies and/or their children;
	the Brownlies failing to empty the recyclable bottle crates on the applicant’s level as frequently as required while all other floors’ crates are emptied; and
	the Brownlies failing to vacuum the carpet in the common area outside the lifts as required.

The application includes various documentation including statements from two owners and a former owner that the Brownlies treat owner-occupiers differently, and indicating concerns with maintenance and parking. One statement notes the Brownlies actively encouraged owners in the letting pool to elect only owners whose properties were in the letting pool to the Committee and that this ultimately occurred.

The applicant wrote to the Body Corporate on 24 April 2006 particularising their concerns and proposing that the Committee pass various motions about the Brownlies. On 10 May 2006 the Body Corporate’s solicitors advised the applicant that their concerns had been tabled and discussed at a Committee meeting on 8 Mary 2006 and the Body Corporate had written to the Brownlies asking that they provide comments within 21 days. After that time the Committee was to give further consideration to the motions. The applicant claims no further response was received.

Following lodgement of the application the applicant says they received correspondence from the Body Corporate dated 28 August 2006 indicating that the Committee had discussed the issues in the 24 April letter, and the Brownlies’ response, at a Committee meeting on 14 August 2006. The Committee noted the Brownlies’ ‘categoric denials’ of the alleged conduct and significant differences in the applicant’s and Brownlies’ versions of events. The Committee said it was not its role to investigate or adjudicate in disputes between the applicant and the Brownlies and viewed the dispute as a clash of personalities. The Committee said:

	it was not prepared to issue remedial action notices as requested;
	while the caretaker had an obligation to maintain, clean and care for the common property, the caretaking agreement does not specify that recyclable bottle crates must be emptied twice a week or that the carpet at the lift entrance be vacuumed at specific times; and
	it was not prepared to call a general meeting to consider issuing a contravention notice.

However, the Committee did express concern over the impact of the dispute on the harmony of the complex. It proposed a voluntary mediation session with a view to reaching long term solutions, to which the Body Corporate offered up to $2,000 for mediator fees and venue hire. The applicant refused this proposal because the outcomes would not be enforceable.

The Committee submission includes the following points:

	the applicant does not provide any grounds for overturning the Committee’s decision;
	the applicant does not identify the basis upon which a ‘dispute’ under the Act exists between the Body Corporate and the applicant;
	the application is seeking an investigation of the allegations of misconduct against the Brownlies and to determine whether those allegations can be substantiated as a matter of fact;
	the legislation does not give the Body Corporate the power to investigate allegations of misconduct and to make findings of fact in relation to those allegations;
	the dispute between the Grahams and the Brownlies cannot be a dispute under the Act and the actual dispute, being the decision of the Committee, does not require an investigation of the allegations of misconduct;
	the only evidence that can be considered in regard to the decision of the Committee is the information that was available to the Committee at its meeting on 14 August 2006;
	contrary to the claim that the Body Corporate did not respond, the Body Corporate says it also wrote to the applicant in June 2006 saying the issue would be further considered at the next Committee meeting and later confirming the date of the next Committee meeting;
	the Brownlies were prepared to participate in the proposed mediation session;
	it was not appropriate for the Committee to make resolutions to issue remedial action notices against the Brownlies or to call a general meeting on the basis of the unsubstantiated allegations available to the Committee at its meeting;
	in regard to the removal of recyclable bottles and vacuuming, even if the allegations could be substantiated there are no specific provisions in the caretaking agreement upon which the Body Corporate could validly base a breach notice; and
	the decisions of the Committee were proper and reasonable. In applying past specialist adjudications, the question of whether the decisions of the Committee were reasonable or unreasonable is one of fact to be determined by the adjudicator and it is not necessary to determine whether the decisions were right or justifiable if the conclusions which led to the decisions might have been reached by a reasonable person rather than some objective standard of correctness.

The submissions from ten owners support the Body Corporate and the Brownlies. Several comment that the Brownlies are professional, helpful, friendly and polite. One says they are excellent managers, that their expectations of maintenance and management are completely satisfied, and that the Committee does an excellent job. Another says the Brownlies are the best of the four caretakers the scheme has had and the Committee has handled this dispute with patience and understanding, noting personal difficulties with the Grahams. Another says the dispute reflects a personality clash and that many of the issues are petty. Two submissions note that previous caretakers have also had conflict with the Grahams. One comments that the dispute centres on two lots, who have refused mediation, and that other lots have no complaints.

One owner, whose statement is also included in the application, supports the applicant. He says there has been a separation between letting pool owners and non-letting pool owners since the Brownlies commenced. He details numerous concerns with the complex management and that the Committee has not responded to most of his various communications on the issues.

The Brownlies were not initially invited by the Commissioner to make a submission on this matter. I have considered whether to invite input from them at this stage, as they would be affected by the outcome sought. However as I have been provided with a copy of their response to the applicant’s letter of 24 April 2006, and in light of my deliberations below, I have considered that this is not necessary. The Brownlies response to the Body Corporate provides a description of their version of the incidences alleged by the applicant. They deny abusive or intimidatory conduct, and refer to one occasion that the Graham’s son allegedly threatened Andrew Brownlie. They maintain that they have fulfilled their obligations in accordance with the caretaking agreement. They deny they have breached the Act, codes of conduct or caretaking agreement.

The applicant’s reply to submissions outlines the chronology of events and that:

	the application was lodged because they were uncertain as to when the matter would be considered by the Committee;
	the dispute relates to the failure of the Body Corporate to issue remedial action notices;
	an adjudicator has the power to make an order of the type sought in the application and to consider all of the material provided to it by each party;
	the Committee is comprised solely of owners with lots in the letting pool;
	the Committee has simply accepted the Brownlies’ version of events in preference to the applicant’s without independently investigating the matter or relying on any other evidence, but there is no objective basis to believe the Brownlies’ version of events over the applicant’s;
	the applicant was not provided with a copy of the Brownlies’ response to their correspondence until they received them as part of the Body Corporate’s submission;
	the applicant was given no opportunity to respond to the matters raised by the Brownlies;
	the Committee has failed to take appropriate steps to ensure there is no breach of the Act, codes of conduct or caretaking agreement;
	item 6.1 of the caretaking agreement does cover an obligation to vacuum the carpet by the lifts and pursuant to item 6.15 of the caretaking agreement, removal of recyclable bottles in accordance with the informal agreement is a requirement of the caretaker;
	the Committee failed to obtain any independent evidence on the issues raised by the applicant;
	the alleged conduct did occur notwithstanding the Brownlies’ denials;
	the issues relate to the credit of each party regarding which version of events is more accurate and the applicant submits that the material provided by them, together with the submission of the owner who supports the applicant, should be accepted in preference;
	the submissions opposing the application are made by owners in the letting pool who therefore do not receive the treatment complained of and, as they are not onsite on a regular basis, have insufficient personal knowledge of the matters raised; and
	the applicant refutes suggestions that they have had difficulties with all previous caretakers. While they note they had conflict with one previous caretaker, they provide a statement from another previous caretaker confirming that they had a good relationship.

JURISDICTION

I am satisfied that in general terms this is a matter which falls within the dispute resolution provisions of the legislation (see sections 227, 228, 276 and Schedule 5 of the Act). Some questions do arise regarding the scope of my jurisdiction to consider the issues outlined in the application and I will discuss these in my determination.

Section 276(1) of the Act provides that an adjudicator may make an order that is just and equitable in the circumstances (including a declaratory order) to resolve a dispute, in the context of a community titles scheme, about:

(a) a claimed or anticipated contravention of the Act or the community management statement; or

(b) the exercise of rights or powers, or the performance of duties, under the Act or the community management statement; or

(c) a claimed or anticipated contractual matter about -

(i) the engagement of a person as a body corporate manager or service contractor for a community titles scheme; or

(ii) the authorisation of a person as a letting agent for a community titles scheme.

An order may require a person to act, or prohibit a person from acting, in a way stated in the order (section 276(2)). An adjudicator's order may contain ancillary and consequential provisions the adjudicator considers necessary or appropriate (section 284(1)).

DETERMINATION

The key issues for consideration in this matter are whether the Committee’s decisions on 14 August 2006 should be overturned and whether, more generally, the Body Corporate has failed in its obligations to administer the scheme by not issuing remedial action notices against the caretaker or calling a general meeting to consider a motion about whether a contravention notice should be issued to the caretakers.

Preliminary issues

To the extent that the dispute relates to validity and reasonableness of the Committee’s decisions on 14 August 2006, this application is within my jurisdiction and, in due course, I intend to make a determination on that issue.

The applicant has not specifically sought an order determining that the Brownlies have engaged in misconduct or contravened the Act, the caretaking agreement or the code of conduct. Yet this may be seen as implicit in the outcomes sought and the supporting grounds. I consider it is outside my jurisdiction to determine any such issue, for the following reasons:

	Any orders against the Brownlies could only be considered in an application in which they were named as respondents – but the applicant does not have standing to bring a dispute against the Brownlies.
	The Act[3] provides that ‘contractual matters’ must be determined by specialist adjudication. Contractual matters in this context include the claimed or anticipated contravention of, exercise of rights and powers under, and performance of duties under the terms of engagement as service contractor or authorisation as letting agent.
	The applicant has not sought the referral of this application to specialist adjudication, and the Commissioner has not so referred it, because the outcome sought is not specifically a contractual matter.

Accordingly I consider that it is beyond my jurisdiction to, even incidentally, making any findings as to the performance of the agreement.

In questioning whether the Committee acted reasonably or not, the applicant presents material and argument as to which version of events should be preferred. However I do not propose to make any findings of fact in this regard. As no objective evidence has been presented, and there are statements from others supporting each side, a determination on this point would come down to an issue of credit. The Act does not provide me with the capacity to test the credibility of the Brownlies and the Grahams or their supporters by taking evidence on oath. Were this issue fundamental to determining the dispute I am able, if necessary, to dismiss the application on the basis that it should be dealt with in a court of competent jurisdiction, where evidence can be taken on oath.^[4] But I do not consider it is necessary to make findings of fact on that point because it goes to the question of the performance of the contract which, as I have explained, is beyond the jurisdiction of this dispute.

The respondent argues that in considering the reasonableness of the Committee’s decision I am only entitled to consider the material before the Committee on 14 August 2006. They make reference to the decisions of a specialist adjudicator regarding the reasonableness of a committee’s decision.^[5] These decisions relate to the specific requirement in section 82(6)(a) of the Accommodation Module that the body corporate must not unreasonably withhold approval for the transfer of an engagement and authorisation.

The decisions referred to are under appeal and moreover are not binding on me. I acknowledge the reasoning of the specialist adjudicator in these matters but I do not consider that the decisions necessarily place the restrictions argued by the respondent or, even if they do, that they are directly relevant to this particular dispute. Those decisions relate to a committee’s compliance with a specific requirement of the Act in very specific circumstances. Conversely any capacity for me to overturn the Committee’s decision for unreasonableness in the current case relies on the general obligation to make a decision that is just and equitable in the circumstances. On balance, however, I do not consider it is necessary for me to make a final determination on whether to exclude consideration of material not available to the Committee on 14 August 2006 because I do not consider that consideration of any such material would affect my ultimate decision.

Role and obligations of the Body Corporate in relation to the caretaking agreement

Pursuant to section 94 of the Act the Body Corporate must administer the common property and body corporate assets for the benefit of owners, enforcement the community management statement, and carry out other functions given to it under the Act and community management statement. The body corporate must act reasonably in fulfilling these functions. These functions encompass administering and managing the engagement of a person as a service contractor for the scheme and the authorisation of a person as a letting agent for the scheme.

A body corporate, therefore, has an obligation to monitor the performance of a caretaking agreement. The committee has the primary responsibility to undertake this role but owners are entitled to bring concerns to the committee’s attention and, if they are not satisfied with the response, raise the issues at a general meeting either through motions or general discussion.

If issues arise regarding the conduct or performance of a caretaker, in the first instance a Body Corporate should normally attempt informal and cooperative means of resolution. However, if these are not successful or not appropriate, sections 84C of the Accommodation Module provide a formal process for a body corporate to action concerns. This section provides as follows:

84C Termination for failure to comply with remedial action notice [SM, s 86C]

(1) The body corporate may terminate a person’s engagement as a body corporate manager or service contractor if the person (including, if the person is a corporation, a director of the corporation)--

(a) engages in misconduct, or is grossly negligent, in failing to carry out functions required under the engagement; or

(b) fails to carry out duties under the engagement; or

(c) contravenes the code of conduct for body corporate managers and caretaking service contractors or, for a caretaking service contractor, the code of conduct for letting agents; or

(d) fails to comply with section 86(2), 87(2) or 88(2);32 or

(e) for a body corporate manager--

(i) fails to comply with section 98A(2); or

(ii) if the body corporate manager is acting under a part 3, division 10 engagement--fails to give a report as required under section 35E.

(2) Also, the body corporate may terminate a person’s authorisation as a letting agent if the person (including, if the person is a corporation, a director of the corporation)--

(a) engages in misconduct, or is grossly negligent, in failing to carry out obligations, if any, under the authorisation; or

(b) fails to carry out duties under the authorisation; or

(c) contravenes the code of conduct for letting agents or, for a caretaking service contractor, the code of conduct for body corporate managers and caretaking service contractors; or

(d) for a caretaking service contractor--fails to comply with section 86(2), 87(2) or 88(2).

(3) The body corporate may act under subsection (1) or (2) only if--

(a) the body corporate has given the person a remedial action notice in accordance with subsection (4); and

(b) the person fails to comply with the remedial action notice within the period stated in the notice; and

(c) the termination is approved by ordinary resolution of the body corporate; and

(d) for the termination of a person’s engagement as a service contractor if the person is a caretaking service contractor, or the termination of a person’s authorisation as a letting agent--the motion to approve the termination is decided by secret ballot.

(4) For subsection (3), a remedial action notice is a written notice stating each of the following--

(a) that the body corporate believes the person has acted--

(i) for a body corporate manager or a service contractor--in a way mentioned in subsection (1)(a) to (e); or

(ii) for a letting agent--in a way mentioned in subsection (2)(a) to (d);

(b) details of the action sufficient to identify--

(i) the misconduct or gross negligence the body corporate believes has occurred; or

(ii) the duties the body corporate believes have not been carried out; or

(iii) the provision of the code of conduct or this regulation the body corporate believes has been contravened;

(c) that the person must, within the period stated in the notice but not less than 14 days after the notice is given to the person--

(i) remedy the misconduct or gross negligence; or

(ii) carry out the duties; or

(iii) remedy the contravention;

(d) that if the person does not comply with the notice in the period stated, the body corporate may terminate the engagement or authorisation.

(5) Despite subsection (3)(a), if the person is a body corporate manager acting under a part 3, division 10 engagement, the owners of at least one-half of the lots included in the scheme may, on behalf of the body corporate, give the person a remedial action notice.

Accordingly, if a body corporate reasonably believes their caretaker has acted or failed to act in a manner that is covered by subsection (1) or (2), and are unable to resolve the matter informally, they should issue a remedial action notice describing this allegation and stating that the caretaker must remedy the situation within a specified period or the body corporate may terminate the agreement. If the caretaker does not comply with the notice, the body corporate may terminate the agreement by an ordinary resolution decided by secret ballot.

The code of conduct in Schedule 2 of the Act applies to a caretaking service contractor in performing their duties as a service contractor. Section 118(2) of the Act establishes that the provisions of the Code are taken to be terms of the contract for the caretaker’s engagement. Accordingly, a breach of the Code should be treated as a breach of the contract.^[6]

Committee decision

The applicant does not argue that the Committee’s decision on 14 August 2006 was invalid. So, the basis for overturning the decision seems to be that it was unreasonable for the Committee not to pass the motions proposed by the applicant.
The application presents no specific argument on this point but focuses on the conduct of the Brownlies. The applicant’s reply to submission does explore the Committee’s conduct to some extent, arguing that the Committee simply relied on the Brownlies version of events without independently investigating the concerns.

Pursuant to section 94 of the Act the Body Corporate, and by inference the Committee acting for the Body Corporate, must act reasonably in fulfilling its functions under the legislation. The question then is whether the Committee acted reasonably. I accept that it is appropriate to consider here not whether the Committee’s conduct was objectively correct, but whether it was a conclusion that a reasonable person could reach in the circumstances.

The Committee argues that it is not its role to investigate or adjudicate interpersonal disputes between owners and the caretaker. It submits the body corporate legislation does not give it the power to investigate allegations of misconduct or to make findings of fact in relation to the applicant’s allegations. While it may not be obliged to investigate disagreement between an owner and a caretaker, I would argue that it is appropriate for the Committee to make every effort to try to resolve such disputes in the interests of harmony in the scheme. Moreover, as the Committee has an obligation to monitor the caretaking agreement, I do consider that the Committee must carefully consider any allegations about the conduct and performance of the Brownlies under the caretaking agreement.

The onus is on the applicant to demonstrate that the Committee has acted unreasonably. However the applicant has submitted no evidence that the decision of the Committee made on 14 August 2006 was invalid or so manifestly unreasonable that it should be overturned. They do not detail what other specific investigations they consider the Committee should have taken in the circumstances or what other evidence the Committee should and could have had regard to.

I am satisfied that the Committee has acted reasonably in the circumstances. They investigated the allegations by seeking a response from the Brownlies. They presumably assessed the versions of events presented in light of their own knowledge of the Brownlies and the Grahams, which I consider would be quite appropriate. They came to the, not unreasonable, conclusion that the different stories indicated a personality clash. They appear to have felt they were not in the position to conclusively determine who was right and who was wrong. By proposing mediation, they did not simply dismiss the allegations, as suggested by the applicant. It may have been appropriate to provide the Brownlies’ response to the applicant to invite a response or invite the Grahams to provide more evidence to support their allegations. However I do not view the failure to undertake these steps as manifestly unreasonable. There may have been a concern that such steps could have further entrenched the opposing positions, which could have prejudiced a genuine attempt at mediation.

The issues regarding the bottle recycling and carpet cleaning is slightly different. The applicant has not alleged that this work is not done by the Brownlies but rather that it is not done as frequently as they believe the caretaking agreement requires. The Committee appears to have reached a different interpretation of the contract, and as such there was no issue of investigating what work the Brownlies were or were not doing. For the reasons outlined above I consider it is beyond my jurisdiction to make a determination as to what the caretaking agreement required in regard to these tasks. However, I would observe that the Committee’s interpretation is not unreasonable. Moreover, even if the applicant was correct in their alternative interpretation, the scale of any non-performance with the contract would not appear to be so great as to warrant the formal step of issuing a remedial action notice. Rather it is a matter that could perhaps better be handled in an informal manner in the first instance, including by discussion at mediation.

Given the Committee’s view regarding the proposed remedial action notices, and because all owners are entitled to submit motions to a general meeting themselves, I do not consider that it was unreasonable for the Committee to refuse to put the issue to a general meeting itself. From the submissions received it is not evident that such a motion would have been successful.

Conclusion

Regardless of whether the Committee members are owner-occupiers or investor owners, I do not consider that I have not been provided sufficient basis to determine that the Committee’s decisions were so manifestly unreasonable as to warrant being overturned. Accordingly I have dismissed the application.

I would encourage the Body Corporate to reissue their offer to organise mediation between the Grahams and the Brownlies. If the Grahams are genuinely concerned about the conduct of the Brownlies, I would encourage them to participate constructively in mediation in the interest of exploring options to address their concerns. I would expect that the Brownlies would be aware of their obligation to act fairly in dealing with all owners – whether in the letting pool or not – and would similarly encourage them to contribute constructively to mediation in the interests of restoring harmony in the scheme.

If mediation is not successful, there is no reason why the applicant can’t submit motions itself to a general meeting seeking the issuing of a remedial action notice or other motions related to their concerns. However, whether these motions were submitted by the Committee or by themselves, the applicant must convince other owners of the validity of their arguments for the motions to be passed by a general meeting. Similarly, even if the Committee had issued remedial action notices as the applicant requested, the support of a majority of owners in a general meeting would still be necessary to pursue the termination of the caretaking agreement.

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^[1] See Schedule 2 of the Act
^[2] See Schedule 3 of the Act
^[3] See section 265 and the definition of ‘contractual matters’ in the Schedule 6 Dictionary of the Act
^[4] See section 270(1)(b) of the Act

^[5] K Dorney QC in South Pacific Noosa Apartments [2006] QBCCMCmr 424 (2 August 2006) and Zanzibar Mooloolaba [2006] QBCCMCmr 425 (2 August 2006)

^[6] While the application seeks a ‘code contravention notice’ there is no such term within the body corporate legislation. A ‘remedial action notice’ would in fact be relevant to an alleged contravention of the codes.