Glades Easthill North [2007] QBCCMCmr 685 (27 September 2007)

Last Updated: 6 November 2008

Office of the Commissioner for Body Corporate and
Community Management

SPECIALIST ADJUDICATION
(Caretaking Service Contractor Dispute)

Number: 0384-2007

Applicant: BRIAN RUSHWORTH Respondent: BODY CORPORATE FOR GLADES EASTHILL NORTH COMMUNITY TITLES SCHEME 32506

O R D E R S
27 September 2007

DECLARATORY ORDERS that: The Remedial Action Notice dated 15 December 2006 does not comply with the requirements of section 84C of the Body Corporate and Community Management (Accommodation Module) Regulation 1997 (“Module”) and is therefore void and of no effect. The Notice dated 15 December 2006 served under clause 7.1(d) of the Caretaking Agreement dated 16 August 2004 is defective in that it failed to adequately identify and particularise breaches of the Agreement the effect of which, if not remedied, would be sufficient to justify termination of the Agreement and is therefore void and of no effect. The Notice dated 15 December 2006 served under clause 7.1(a)(iv) of the Letting Agreement dated 16 August 2004, having been withdrawn by the Respondent, cannot be further relied upon by the Respondent. The Notice dated 13 February 2007 served under clause 7.1(d) of the Caretaking Agreement dated 16 August 2004 is defective in that it failed to adequately identify and particularise breaches of the Agreement the effect of which, if not remedied, would be sufficient to justify termination of the Agreement and is therefore void and of no effect. FURTHER ORDERS that: The secret ballot voting papers held by or on behalf of the Respondent in respect of motion 11 proposed to the Respondent’s annual general meeting on 17 May 2007 be destroyed without being counted or otherwise examined. The Respondent pay the costs of the adjudication within 60 days of receipt of an invoice for those costs.

G F Bugden OAM
Specialist Adjudicator

Office of the Commissioner for Body Corporate and
Community Management

SPECIALIST ADJUDICATION
(Caretaking Service Contractor Dispute)

Number: 0384-2007

Applicant: BRIAN RUSHWORTH

Respondent: BODY CORPORATE FOR GLADES EASTHILL NORTH

COMMUNITY TITLES SCHEME 32506

DETERMINATION
27 September 2007

Application

1. This is an application for resolution of a dispute involving a body corporate and a caretaking service contractor that must be determined by specialist adjudication in accordance with the provisions of section 265 of the Body Corporate and Community Management Act 1997 (‘Act’). The Act, including that section, was amended substantially by the Body Corporate and Community Management and Other Legislation Amendment Act 2007 (‘Amending Act’) which commenced on 1 July 2007.
2. The Amending Act inserted section 395 into the Act. That section requires applications made but not disposed of before 1 July 2007 to be dealt with under the Act as if the Amending Act has not been enacted. It follows, that references in this determination are references to the provisions of the Act as they were in effect immediately before 1 July 2007.
3. The Applicant is a co-owner of lot 63 in community titles scheme 32506 (‘Scheme”), which can generally be referred to as the Caretaker’s lot. The current Caretaker, Ambro Australia Pty Ltd, is a company related to the Applicant.
   

Management Agreement

4. The Body Corporate entered into a Caretaking Agreement with THL Robina Pty Ltd dated 16 August 2004 (‘Agreement’). The Agreement is for a term of 25 years from 10 August 2004. In the Agreement THL Robina Pty Ltd was referred to as the Caretaker, a term that I will use in this determination.
5. On or about 28 February 2005 THL Robina Pty Ltd assigned the Agreement, as well as a Letting Agreement which I will deal with shortly, to Ambro (Aust) Pty Ltd. The Body Corporate was a party to the Deed of Assignment and provided its consent by means of that deed. The Applicant is also the nominated on site manager for Ambro (Aust) Pty Ltd.
6. The duties of the Caretaker are set out in some detail in the Agreement. Clause 14 of the Agreement deals with the Gardens Maintenance Policy and that term is defined with reference to that clause. The clause is in the following terms:

“14.1 The Caretaker acknowledges that the Common Property gardens and landscaping are a feature of the Development and will require a high standard of maintenance and care.

14.2 The Body Corporate Committee shall, upon consultation with a landscaping consultant set out a list of specific gardening duties and methods of maintaining and caring for Common Property gardens, landscaping features and irrigation. The list shall be set out in writing and be given to the Caretaker (“the Gardens Maintenance Policy”).

14.3 The Body Corporate Committee may from time to time upon advice from a landscaping consultant, amend the Gardens Maintenance Policy. The Body Corporate Committee shall act reasonably in amending and compiling the Gardens Maintenance Policy and the duties imposed shall be consistent with the Caretaker’s duties set out in clause 2.

14.4 The Caretaker shall strictly comply with the Gardens Maintenance Policy and any amendments to the Gardens Maintenance Policy.

14.5 Any amendment of the Gardens Maintenance Policy shall not be an amendment of this Agreement.”

7. A draft of the Gardens Maintenance Policy was disclosed to prospective purchasers of lots in the proposed community titles scheme. However, neither the Applicant nor the Caretaker were provided with copies of the Gardens Maintenance Policy at the time the management rights to the Scheme were acquired back in February 2005.
8. There is nothing before me to establish that the Gardens Maintenance Policy was formally adopted as required by the Agreement, but I assume that was done. It is also relevant to note that the parties to the Agreement have acted in acceptance of the Gardens Maintenance Policy. It is also common ground that the Gardens Maintenance Policy has never been amended.
9. Clause 7.1(d) of the Agreement is in the following terms:

‘This Agreement may be terminated by the Body Corporate delivering a notice in writing to the Caretaker if:

(a) ....;

(d) the Caretaker is in breach of this Agreement and that breach continues at the end of thirty (30) days after notice in writing delivered by the Body Corporate to the Caretaker requiring that breach to be remedied.’

Letting Agreement

10. The Body Corporate also entered into a Letting Agreement with THL Robina Pty Ltd dated 16 August 2004. (‘Letting Agreement’) for a period of 25 years from 10 August 2004. In the Letting Agreement THL Robina Pty Ltd is referred to as the “Letting Agent”.
11. The Letting Agreement was also the subject of the assignment to Ambro (Aust) Pty Ltd that I previously referred to.
12. Clause 7(a)(iv) of the Letting Agreement provides as follows:

‘(a) This agreement may be terminated by the Body Corporate delivering a notice in writing to the Letting Agent if:

(i) ....

(iv) the Letting Agent is in breach of this Agreement and that breach continues at the end of thirty (30) days after notice in writing delivered by the Body Corporate to the Letting Agent requiring that breach to be remedied.’

13. I addition, clause 8 of the Letting Agreement provides as follows:

“The Letting Agent has entered into a Caretaking Agreement with the Body Corporate contemporaneously with entering into this agreement. The parties acknowledge that:-

(i) A default under the Caretaking Agreement shall constitute a default under this agreement and vice versa; and

(ii) Upon the expiration or termination of the Caretaking Agreement, this Agreement shall expire or terminate on the same date.’

Breakdown of the relationship

14. Since shortly after the Caretaker took the assignment of the Agreement and the Letting Agreement the body corporate committee became dissatisfied with the Caretaker’s performance. This appears to have corresponded with a change of committee in January 2006, although nothing turns on this.
15. It is fair to say that, eventually, the relationship between the Caretaker and the Body Corporate deteriorated to the extent that the parties were not able to effectively work together. This was graphically illustrated by the fact that the Caretaker was, at worst, excluded from meetings of the Committee, of which it is a member, and, at best, was generally unwelcome at those meetings.
16. The Committee of the Body Corporate decided to take enforcement action against the Caretaker.

Remedial Action Notice

17. By letter dated 15 December 2006 from Piper Alderman, Solicitors, acting for the Body Corporate, to Ambro (Aust) Pty Ltd, 3 notices were served on Ambro (Aust) Pty Ltd on behalf of the Body Corporate, namely:
    1. Notice under clause 7 of the Caretaking Agreement.
    2. Notice under clause 7 of the Letting Agreement.
    100. Remedial Action Notice under section 84C (although expressed in the letter to be section 84) of the Body Corporate and Community Management (Accommodation Module) Regulation (‘Accommodation Module’).
18. Service of these 3 notices appear to have been authorised by the Committee of the Body Corporate. Under the terms of the Act and the Accommodation Module, combined with the provisions of the Agreement, if the Applicant failed to comply with those notices, then, subject to certain procedural matters, the Body Corporate could terminate the Agreement.
19. On 13 February 2007 Piper Alderman, on behalf of the Body Corporate, served a further default notice under clause 7 of the Caretaking Agreement on the Applicant. The alleged defaults covered by that notice were substantially the same as some of the alleged defaults in the earlier notices.
20. The length and scope of the various notices are extensive and it should not be necessary for me to set them out in detail. I will therefore refer only to the relevant items in the various notices.

Annual General Meeting

21. Following the break down in the relationships and efforts by the Caretaker to sell its management rights for the Scheme, the Body Corporate convened its annual general meeting to be held on 17 May 2007. The Body Corporate Committee proposed to that meeting a motion for an ordinary resolution to be decided by secret ballot, in the following terms:

‘That except where the Body Corporate has consented to the proposed assignment of the interest of Ambro (Aust) Pty Ltd ACN 099 989 358 in the Caretaking Agreement and Letting Agreement, each dated 16 August 2004, to Investor Property Management Pty Ltd ACN 120 653 643, and the assignment has been completed prior to the holding of this Annual General Meeting in accordance with the terms of consent of the Body Corporate, that the Body Corporate terminate both the –

(i) Caretaking Agreement pursuant to clause 7.1 and section 84C of the Body Corporate and Community Management (Accommodation Module) Regulation 1997; and

(ii) Letting Agreement pursuant to clause 7 and section 84 of the Body Corporate and Community Management (Accommodation Module) Regulation 1997.’

22. An explanatory schedule that accompanied the Notice of Annual Meeting indicated, inter alia:

At the direction of the Committee, notices have been issued by the Body Corporate’s solicitors, Piper Alderman, Lawyers, for Ambro (Aust) Pty Ltd, in respect of breaches under terms of the Caretaking Agreement. The notices required these breaches to be remedied within thirty days in accordance with the terms of the Caretaking Agreement, and the Body Corporate and Community Management Act 1997 and Accommodation Module.

The Committee considers that the breaches complained of have not been rectified by Ambro (Aust) Pty Ltd.’

Interim order

23. Before that motion could be considered by the annual general meeting, the Applicant made the current application. In the application, the Applicant sought an interim order to restrain the Body Corporate from putting that motion to a vote at the meeting. By interim order dated 11 May 2007, I so restrained the Body Corporate.
24. Therefore, in relation to the 4 notices I have referred to, the question is whether the Body Corporate was, and therefore still is, entitled to consider the relevant motion and, if passed, proceed to terminate the Agreement and the Letting Agreement.

Remedial Action Notice

25. The Remedial Action Notice was served under section 84C of the Accommodation Module. It alleges that the Applicant:
    4. Engaged in misconduct, or was grossly negligent, in failing to carry out functions required under the Agreement.
    5. Failed to carry out duties under the Agreement.
    6. Contravened the Code of Conduct for Body Corporate Caretaking Service Contractors.

The notice allowed 30 days from the date of delivery of the notice for the Applicant to remedy the misconduct or gross negligence, carry out the duties and remedy the contravention,

26. Section 84C(4)(b) of the Accommodation Module requires a remedal action notice to set out details of the action sufficient to identify the misconduct, gross negligence, duties and Code violations complained of. The process envisaged by that section is one whereby a body corporate can bring to the attention of a non-performing caretaking service contractor misconduct, gross negligence, failure to carry out duties or failure to comply with the Code of Conduct. The caretaking service contractor is then given the opportunity to remedy the matter complained of and if they fail to do that, their agreement can be terminated.
27. A remedial action notice must be clear about what is complained of so that the caretaking service contractor will know what has to be done to remedy the complaint. The subject of the complaint must be capable of being remedied. In the case of failure to carry out duties, there must be a clearly identifiable duty that has not been carried out.
28. In the case of the Remedial Action Notice dated 15 December 2006, at a preliminary meeting of the parties, the Body Corporate indicated that it would not be relying upon 7 of some 17 alleged issues in the notice. The 7 that were not being relied upon were those in clause 2(b)(iii), (v), (vi), (vii), (viii), (xii) and (xiii).
29. Subsequent to that meeting I considered the contents of the Commissioner’s file, the contents of the Remedial Action Notice and the relevant provisions in the Agreement. Having done that, I reached one of 2 conclusions in relation to 9 of the 10 remaining issues, namely:
    7. There were insufficient particulars to enable the Caretaker to understand exactly what the complaint was and what action was need to remedy that complaint.
    8. There was no duty that required the Caretaker to do what the Body Corporate required.
30. On the question of particulars, it is relevant to note that in response to the Remedial Action Notice, the solicitors for the Applicant, Robinson & Robinson, made a request to Piper Alderman for further and better particulars. That request was denied. The basis of the denial was that the Applicant had previously been advised and provided with material sufficient to identify the numerous breaches and where applicable, the actions required to remedy those breaches.
31. I do not propose to deal with all 9 issues on which I reached the conclusions I have referred to. However, I will provide examples, the first being the alleged breach of duty in clause 2(b)(ii) of the Remedial Action Notice, which is in the following terms:

“2 Details of the action sufficient to identify the items in 1(a), 1(b) and 1(c) herein are as follows:

1. .....

10. The Body Corporate believes you are in breach of the Agreement due to the:
    • (i) ....
    • (ii) Failure to administer the Common Property to ensure it is able to be used and enjoyed by the Occupiers and is properly maintained and kept in good repair. (cl 2.1)”

The items in “1(a), 1(b) and 1(c)” are the items set out in paragraph 25 above.

32. There are insufficient details in that item to allow the Caretaker to understand what duties have not been carried out. The Caretaker could not reasonably be expected to remedy that alleged breach of duty. Furthermore, referring the Caretaker to advice and materials previously provided, when there had been numerous instances of advice and quantities of materials provided in previous months, does not do anything to assist the Caretaker.
33. The second example concerns the swimming pool. Clause 2(a)(i) of the Remedial Action Notice provides the following particulars:

“2 Details of the action sufficient to identify the items in 1(a), 1(b) and 1(c) herein are as follows:

11. (i) Failure to comply with clauses 2.1(a)(viii), 2.1(m) and 2.1(o) of the Agreement, and disregard of the Queensland Health Swimming and Spa Pool Water Quality and Operational Guidelines issued by Queensland Government (“the Guidelines”):

Failure to implement a strategy for the clenliness and safety of the pool facilities including the keeping of a log of water testing and chemical balance and/or chemical additives, you have failed to incorporate the keeping of a log as part of your caretaking duties concerning the pool facilities. In addition, you have communicated your intention to not regard or have reference to the Guidelines or Council’s Local Law No 31 – Swimming Pools. You will not comply with this reasonable direction of the committee.

Accordingly, there are no records available to the Body Corporate concerning the maintenance of the pool facilities. There is potential risk to health of all individuals including lot owners and occupiers and guests, as a result of your failure to adhere to the Guidelines, and breach of the Agreement.”

34. Clause 2.1(a)(viii) of the Agreement is in the following terms:

“2.1 The Caretaker shall administer the Common Property to ensure the Common Property is able to be fully used and enjoyed by the Occupiers and is properly maintained and kept in good repair and the Caretaker shall attend to the following:

(a) As reasonably required:

(i) ....

(viii) maintain and clean the swimming pool(s), fountains, water features, spas and steam room;”

35. Clause 2.1(m) imposes a duty on the Caretaker to “Monitor and administer the use of all recreation facilities including any swimming pool ...” . Clause 2.1(o) requires the Caretaker to carry out “the additional duties specified in Schedule 1 ...” but the Schedule simply says “Any duties agreed to by the Caretaker and the Body Corporate and evidenced in writing.” There is no evidence that there are any such agreed duties.
36. The allegations do not suggest that the pool is not being cleaned. The allegations are:
    50. disregard of the Guidelines;
    13. failure to implement a strategy for the cleanliness and safety of the pool facilities as recommended by the Guidelines;
    14. failure to keep a log;
    15. failure to comply with a reasonable direction of the committee; and
    16. a communicated intention not to comply with the Guidelines and Local Law 31.

The dispute in this respect is therefore one of standards rather than outright default.

37. The difficulty with this allegation is that there is noting in any of the duties cited by the notice that actually requires the Caretaker to do what is being asked of it. They may be things that the Body Corporate would like to see done, but they are not things that the Caretaker is obliged to do. They cannot simply be imposed on the Caretaker.
38. If the Guidelines amounted to a legal obligation on the Body Corporate, then the Caretaker’s position may not be so straight forward. But the Guidelines themselves make it clear that they do not apply to the Scheme’s swimming pool.
39. My review concluded that there was only one item that may have been adequately particularised in the remedial action notice, namely the item in clause 2(a)(xv). That item related to an alleged failure on the part of the Applicant to comply with the Gardens Maintenance Policy. In my review, I did not feel that I was able to determine with certainty that there were sufficient particulars supporting this item and I elected to receive further evidence and submissions in relation to this allegation.
40. The difficulty that confronted me was the extent of the allegations of non-compliance. There were 8 allegations of non-compliance for this item alone. The other thing that troubled me was the fact that it was non-compliance with a Policy that:
    17. was formulated after the agreement was entered into;
    18. that made reference to and incorporate other documents;
    19. is said to be capable of amendment (but not in a way that amends the Agreement); and
    20. appeared to be in conflict with the Agreement.

Gardens maintenance issues

41. At a second meeting of the parties I examined, with the parties, each of the 8 allegations relating to garden maintenance. I have since considered each allegation in detail. In so doing I was mindful that clause 2.1(a)(iv) and (iv) of the Agreement is in the following terms:

“2.1 The Caretaker shall administer the Common Property to ensure the Common Property is able to be fully used and enjoyed by the Occupiers and is properly maintained and kept in good repair and the Caretaker shall attend to the following:

(a) As reasonably required:

(i) ....

(iv) mow the Common Property lawns and trim the edges of the lawns;

(v) maintain the Common Property lawns, gardens and shrubs, including watering, fertilizing, weeding, mulching and top dressing according to the Gardens Maintenance Policy;”

42. There is a threshold issue of whether the Gardens Maintenance Policy is binding on the Caretaker. However, assuming that it is use of the words “as reasonably required” in clause 2.1(a) effectively means that the Garden Maintenance Policy may well specify how things are to be done and what chemicals or substances are to be used, but it cannot specify how frequently things must be done. This is because they need only be done “as reasonably required”. It follows that the detailed schedule in the Gardens Maintenance Policy specifying intervals for certain actions or tasks to occur is in conflict with the Agreement and unenforceable.
43. Having reached that conclusion, my findings in relation to the 8 alleged breaches are as follows (without setting out the lengthy wording of the allegations):
    • 1st dot point – The Caretaker is not under a duty to “implement a strategy or schedule of frequency of works” and there is insufficient particulars of the alleged failure to maintain the landscaped areas in accordance with the Policy. The allegation is therefore not substantiated.
    • 2nd dot point – There is evidence that the Caretaker failed to replace some trees that appeared sick or dead. Its failure was not a total failure. The Caretaker’s explanations related to the drought and the pointlessness of replacement; the reduction in its approved expenditure limit; its exclusions from Committee meetings and general failure of the committee to work with it in decision making about the tree replacements. On balance I think the Caretaker has a case to answer in relation to this allegation.
    • 3rd dot point – The evidence is that the fertilising did occur in accordance with the Policy and there is no evidence that the timing was otherwise than “as required”. There is no duty requiring the giving of evidence to the body corporate about fertiliser used. This allegation is not substantiated.
    • 4th dot point – The evidence is that the weeding did occur and there is no clear evidence that it was otherwise than “as required”. In any event, it was probably in accordance with the non-binding timings in the Policy. There is no duty requiring the giving of any evidence of things to the body corporate. This allegation is not substantiated.
    • 5th dot point – This allegation is not clear. It appears to require the Caretaker to provide “a schedule of pruning or garden maintenance activity”. The Body Corporate says it refers to the pruning and activity rather than a schedule. In any event, it is not clear and there are insufficient particulars. This allegation is not substantiated.
    • 6th dot point – I am not satisfied that there is sufficient evidence to support this allegation. That is not to say that at times lawn levels are higher than normal. Indeed, the Body Corporate produced a number of photographs showing lawns that needed mowing. The difficulty is knowing whether this is a regular or occasional occurrence. The Body Corporate says it is regular but the Caretaker says the lawns are mown regularly and there are reasons why they are sometimes overdue for a cut. The general nature of the Body Corporate’s claims, the lack of particulars and the difficulty of determining the situation as at the 2 relevant dates, 15 December 2006 and 13 February 2007 adds to the difficulty of being satisfied that there has been a breach of duty at the relevant times. Therefore, on balance, I am not satisfied that this allegation is substantiated.
    • 7th dot point – The complaint here related to top dressing and aerating the lawns. The Body Corporate conceded that top dressing had been done as required. The Caretaker maintained that aerating has not been required to date and there is no evidence to the contrary. The allegation is not substantiated.
    • 8th dot point – the allegations were that the caretaker failed to maintain the Central Spine Park in accordance with the “maintenance schedule”; has not implemented any system of maintenance and failed to provide documentation evidencing such schedule maintenance. The Caretaker provided detailed evidence of a substantial amount of work undertaken in relation to this Park. It appears to me that the expectations of the Body Corporate exceed the obligations of the Caretaker under the Agreement. Apart from that, the allegation is not sufficiently particularised and there are no duties relevant to any system of maintenance or provision of documentation. This allegation has not been substantiated.
44. The Code Contravention Notice also alleges breaches of provisions of the Code of Conduct for Body Corporate Service Contractors; although it does not expressly state which Code provisions have been breached. There are 4 allegations in this regard. For the first allegation there are no particulars at all; just a general accusation accompanied by the extraordinary statement that the Caretaker is not entitled to remuneration.
45. The second and third allegations also contain no particulars and are broad statements. The fourth allegation is that the Caretaker engaged in “unconscionable conduct” because its employees “exerted undue influence on or used unfair tactics against the Body Corporate in the carrying out of duties and obligations under the Agreement”. No particulars are given.
46. I therefore conclude that the Remedial Action Notice has failed to establish any breach of the Code of Conduct.
47. Apart from the allegation that the Caretaker failed to replace some of the trees, none of the other alleged defaults were clearly established. Even the failure in relation to the trees was disputed and explained to some extent by the Caretaker. In my opinion, this failure in itself does not justify termination of the Agreement. Also, given the extraordinary number of alleged breaches in the notices it would have been very difficult, if not impossible, for the Caretaker to specifically identify the need for this failure to be remedied within the 30 day period. It is understandable that the Caretaker was at a total loss to know what to do in order to satisfy the various notices.

Breach Notice

48. The Breach Notice dated 15 December 2006 was served under clause 7.1(d) of the Agreement. It substantially repeats the alleged breaches of the Agreement raised in the Remedial Action Notice. It too required remedy within 30 days of delivery of the notice.
49. Again, at the preliminary meeting of the parties, the Body Corporate indicated that it would not be proceeding with items 3, 5, 6, 7, 8, 12 and 13 in the breach notice. They are the exact same items in the remedial action notice that the Body Corporate elected not to proceed with.
50. Again, having examined the items that the Body Corporate wanted to rely upon, I formed the view that insufficient particulars had been given in relation to all of them, with the exception of item 15 which related to the compliance with the Garden Maintenance Policy. Again, this was the only allegation that was potentially effective in the breach notice.
51. Because the Breach Notice is in substantially the same terms as the Remedial Action Notice, my findings in relation to the Breach notice are the same as my findings in relation to the Remedial Action Notice. The obligation to sufficiently particularise the breaches complained of applies equally to the Breach Notice.

Letting Agreement Breach Notice

52. The third notice dated 15 December 2006 was served under clause 7(a)(iv) of the Letting Agreement, alleging that the breach of the Agreement constituted a breach of the Letting Agreement and again allowing a period of 30 days of delivery of the notice to remedy the breach.
53. At the preliminary meeting, given that there is a clause in the Letting Agreement providing for it to terminate if the Agreement terminates, the Body Corporate indicated that it did not seek to rely upon or continue further with the Letting Agreement Breach Notice. It follows that it is not necessary for me to further consider that notice.

Breach Notice dated 13 February 2007

54. The Breach Notice dated 13 February 2007 was served under clause 7.1(b) of the Agreement. It effectively complained about three things:

(1) Failure to maintain the swimming pool to a particular standard.

(2) The Applicant’s conduct under the Agreement.

(3) Failure to maintain in accordance with the Garden Maintenance Policy.

55. It is fair to say that the allegations in the breach notice dated 13 February 2007 are very similar to the allegations contained in the earlier notices. At the preliminary meeting of the parties that I have referred to, the Body Corporate indicated that it wished to rely upon all three of those allegations. Because some of the wording in the latest notice is not identical to the wording of the earlier notices it is necessary for me to undertake a point by point analysis of the later notice.
56. The first allegation concerns the swimming pool. The wording is identical with the corresponding section of the Remedial Action Notice. Therefore, this allegation suffers from the same defects and is not substantiated.
57. The second allegation concerns a threatening note to the Body Corporate from an employee of the Caretaker and the general state of communications between the Caretaker and the Body Corporate and the Caretaker’s attitude. The wording is very general and it is not clear what is required of the Caretaker to remedy the allegation. Indeed, it suggests that the state of the relationship is such that there is no prospect of remedy. While the allegation suggests that the Caretaker is solely responsible for the breakdown, the evidence on the Commissioner’s file and the evidence of the Caretaker regarding his exclusion from meetings of the committee suggests that there is, at the least, fault on both sides. Apart from lacking in particulars, assuming that the “complaint” is well founded, there does not appear to be any identifiable provision of the Agreement that has been breached.
58. The final allegation concerns the Caretaker’s failure to comply with the Gardens Maintenance Policy. The wording is different to the wording in the Remedial Action Notice, but the substance of the allegation is the same. There is just a broad allegation that there has been a failure to comply with the Policy and this is reflected in the poor state of the common property gardens and landscaping. This allegation suffers from the same defects as the previous allegations.
59. I therefore concluded in relation to the breach notice of 13 February 2007 that it was not a valid notice in accordance with clause 7.1(b) of the Agreement.

Summary

60. This has been a difficult matter for everyone concerned and I feel compelled to make a number of comments in the hope they will assist the parties in their future relationship:
    21. The expectations of the Body Corporate, through its committee, and the level of performance of the Caretaker are poles apart.
    5. There is evidence that the Caretaker may have underperformed in some areas, but this may be partly excusable given the approach of the committee to managing the relationship with the Caretaker. For example; nothing positive can be gained by excluding, expressly or by implication, the Caretaker from meetings of the committee, particularly when it has a legal entitlement to be represented at those meetings.
    23. The committee seems to be treating the Caretaker as an employee rather than a contractor. An employee can be directed as to how things are to be done and what records are to be kept. A contractor is not subject to the same level of direction as an employee. The contractor is left to do the job using its own resources and in the way it sees fit, provided the terms of the contract are observed.
    10. The Garden Maintenance Policy will always be a problem for a caretaking contractor, and the Body Corporate. It is unsatisfactory for the Agreement to incorporate by reference a Policy that then further incorporates other documents by reference, such as the Gold Coast City Council Landscape Strategy. Added to that is the risk of change to those documents. Furthermore, the Policy is in conflict with the Agreement and its contents are such that there will always be room for argument, particularly where a majority of the common property is effectively bushland intended to serve as a flood plain. The parties should seriously look at refining the requirements of the Policy (having regard to the level of the Caretaker’s remuneration) and incorporating them into the Agreement.
    25. The committee may well have done its best to deliver the best maintenance outcome for the lot owners in the Scheme. It has also relied on legal advice in the way in which it has dealt with the Caretaker. Despite this the outcomes have not been good for the Body Corporate. A new approach is needed by both parties if the outcomes are to be different in the future.
    26. The history of this matter suggests that the Body Corporate’s objectives in serving the various notices the subject of this application were more designed to get rid of the Caretaker than to genuinely seek rectification of defaults on the part of the Caretaker. Had it taken a less extreme approach and focused on specific defaults, properly particularised, the results may have been totally different. Either the Caretaker would have rectified the defaults or the Body Corporate would have been well positioned to terminate the Agreement.

Costs

61. The Applicant’s solicitor has submitted that costs should follow the event. He has also submitted that because of the Body Corporate’s failure to particularise the breaches in its notices and its subsequent refusal to provide such particulars, it should effectively be penalised by being required to pay the Applicant’s costs.
62. My power to award costs comes from section 280(2) of the Act. That sub-section provides that the applicant is responsible for “the costs of the adjudication” unless the adjudicator otherwise orders. The costs of the adjudication are my fees and expenses and do not extend to the costs incurred by the parties.
63. A specialist adjudicator usually takes a number of things into account when deciding whether or not to award costs. The result is clearly one of those things. The conduct of the parties is another important matter that needs to be considered. In this case I think it is appropriate for the Body Corporate to pay the costs of the adjudication given the result of the application and the failure of the Body Corporate to provide particulars and genuinely seek remedy of breaches that may have existed.
64. It may be arguable that I can order other types of costs, but I am not inclined to do that even if I had the power to. My order relating to costs will therefore be confined to the costs of the adjudication.
    

G F Bugden OAM
Specialist Adjudicator