Seed v Body Corporate for Renaissance Golden Beach
[2011] QCAT 246
•31 May 2011
| CITATION: | Seed and Anor v Body Corporate for Renaissance Golden Beach [2011] QCAT 246 |
| PARTIES: | Frank Seed & Jane Seed |
| v | |
| Body Corporate for Renaissance Golden Beach |
| APPLICATION NUMBER: | OCL145-10 |
| MATTER TYPE: | Other civil dispute matters |
| HEARING DATE: | 20 May 2011 |
| HEARD AT: | Brisbane |
| DECISION OF: | The Hon James Thomas AM QC, Member |
| DELIVERED ON: | 31 May 2011 |
| DELIVERED AT: | Brisbane |
ORDERS MADE: | It is declared that the code contravention notice issued by the Body Corporate on 12 November 2009 is invalid. |
| CATCHWORDS: | Body Corporate – Dispute with agent / Service Contractor under caretaking/letting agreement – Code Contravention Notice issued under s 139 of Body Corporate and Community ManagementAct 1997 – statutory requirements – whether notice valid – whether body corporate entitled to issue “Requirement for Transfer” under s 140 – whether “management rights” to be transferred include the caretaker’s unit – BCCM Act, sections 15, 16, 139, 140; definitions of “letting agent”, “letting agent business”, and “management rights” |
APPEARANCES and REPRESENTATION:
| APPLICANT: | Mr C Carrigan (counsel) |
| RESPONDENT: | Mr G I Thomson (counsel) |
REASONS FOR DECISION
Jurisdiction
This is a “complex dispute” within the meaning of the Body Corporate and Community Management Act 1997 (“the BCCM Act”). Under section 229 of that Act exclusive jurisdiction to determine such a dispute is conferred upon a specialist adjudicator or QCAT. The parties have elected to bring it before this Tribunal.
The present matter is a contest between an agent/manager and the Body Corporate. The Applicants are Mr and Mrs Seed (“the agent”) and the Respondent is the Body Corporate for the Renaissance Golden Beach (“the Body Corporate”).
Two items of relief are sought by the agent, one, a declaration that a certain Code Contravention Notice issued by the Body Corporate is invalid; and, two, a declaration, in effect, that unit 101 in which Mr and Mrs Seed reside, is not part of the “management rights” as defined in Division 8 of Chapter 3 of the BCCM Act (ie sections 138-149A and the schedule of definitions).
The consequence of the latter declaration would be that the Body Corporate would be unable to demand the transfer of lot 101 even if it were otherwise entitled to issue a Code Contravention Notice and to demand a transfer of the agent’s management rights.
As a Judicial Member of QCAT, I have jurisdiction to make a declaration if it is considered necessary or desirable to do so (see Queensland Civil and Administrative Tribunal 2009, sections 59 and 60).
Although it was initially agreed that this matter should be determined on the papers, both parties filed further material on the eve of the hearing thereby escalating the dispute. There are contested facts concerning the agent’s conduct and performance of the agent’s obligations under the service contract. However there are preliminary points of law that have been raised which potentially are capable of resolving the matter without a determination of the extent and quality of the services rendered by the agent. During the hearing I intimated that I would consider the matter on the basis of the documents and facts which are not in contest. I indicated that if it became necessary to enter into the merits of the parties’ conduct I would reconvene for that purpose.
It seems to me that on the uncontested facts it is possible to make a determination
a)Whether the code contravention notice is capable of taking legal effect, and
b)Whether lot 101 is included in the “management rights” of the agent within the meaning of that term in section 140 of the BCCM Act.
Facts
On 2 December 2003 the Body Corporate entered into a “Caretaking/Letting agreement” with Bradley John Wallis and Iris Gail Wallis. That agreement will be referred to as "the service contract".
The scheme comprises 19 units.
[10] By assignment dated 29 March 2006, the agent took over the rights under the service contract from 1 May 2006. In consequence they acquired Lot 101, a designated unit on the ground floor of the complex.
[11] Under the service contract they were obliged to perform various caretaking and managerial tasks and were granted “the sole right to carry on… the business of letting units” and other associated rights (see Cl 4.1.1). However it is common ground that the agent never in fact conducted a letting business at the complex.
[12] The agreement also contemplated that the business would be carried on “from the caretaker’s unit and the foyer area”. It is common ground that the caretaker’s unit is lot 101 in which Mr and Mrs Seed reside.
[13] Virtually from the time of commencement of the agent’s duties, disputes arose as to the manner and the extent of the performance by the agent, resulting in much disputation and correspondence, a raft of Remedial Action Notices and two contested proceedings in the Commercial and Consumer Tribunal.
[14] The term of the service contract does not expire until 2 December 2013. However at the end of July 2010 the agent ceased providing further services to the body corporate and unit owners, having sent a letter 12 July 2010 advising the Body Corporate that they would cease to perform the agreement from 31 July. The Body Corporate ceased payments to the Applicants in September 2010, and from 1 August 2010 the Body Corporate has arranged for the duties of the service contract to be performed by outside contractors.
[15] In November 2009 the Body Corporate resolved at an Extraordinary General Meeting to issue a Code Contravention Notice against the agent, and did so on 12 November 2009. Subsequently, being of the view that the agent had not complied with the notice, it resolved to serve the agent with a “Requirement for Transfer Notice”, and did so on 22 December 2009. The effect of such a notice, if valid, is to require the agent to transfer their management rights.
Is the code contravention notice valid?
[16] The code contravention notice will be referred to as “the CCN”. The agent did not initially dispute the validity of the CCN, and the Body Corporate preceded to the next step of issuing a transfer notice. The present application to QCAT was not made by the agent until 11 months after receipt of the CCN. However there is nothing in the evidence sufficient to raise any estoppel or waiver of the agent’s rights to challenge its validity.
[17] Section 139 of the BCCM Act, where relevant, provides:
Code contravention notice
(1) …
(2) The code contravention notice must state –
(a)that the body corporate believes the person has been or is contravening a provision of the code of conduct for –
(i)letting agents; or
(ii)body corporate managers and caretaking service contractors; and
(b)the provision the body corporate believes has been or is being contravened; and
(c)details sufficient to identify the contravention; and
(d)the reasonable period within which the letting agent must remedy the contravention; and
(e)that the body corporate may, without further notice, give the letting agent a transfer notice if –
(i)the letting agent does not comply with the code contravention notice; or
(ii)the body corporate reasonably believes the letting agent, after being given the notice, has contravened a provision of a code mentioned in paragraph (a).
[18] Such a notice is the trigger which may lead to the forfeiture of substantial entitlements and property. Rights worth millions of dollars are commonly involved in such matters.
[19] The first thing to notice about paragraphs (a), (b), (c) and (d) of section 139(2) is that these provisions are mandatory, and failure to meet any of the mandated requirements will result in invalidity.
[20] Reference was made to a number of decided cases indicating the approach taken by courts to interpretation of various notices which result in forfeiture of property rights or contractual rights. These include Clarke v Japan Machines (Australia) Pty Ltd [1984] 1 Qd R 404, 410; Hometeam Construction Pty Ltd v McCauley VC200506600 (NSW Court of Appeal 7 September 2005) at paragraphs 135 to 162; and Mannai investment Co Ltd v Eagle Star Life insurance Co Ltd [1997] AC 741, 767-768, and 771.
[21] Whether the issue involves a building contract, forfeiture of a lease, loss of contractual rights, or (as here) the loss of both contractual and real property rights, the authorities consistently hold that the validity of a notice of default is to be determined objectively on the basis on what would be conveyed to a reasonable recipient with his or her background knowledge.
[22] In considering whether there has been compliance with a statutory requirement for such a notice it is necessary that it be capable of permitting the recipient to understand with reasonable certainty what he or she is required to do. It may also be relevant to consider whether the legislation has an objective such as affording an opportunity to the recipient to rectify a breach before the giver of the notice may proceed to exercise an extreme remedy (Clarke v Japan Machines (Australia) Pty Ltd above at 410 and 413). Both of these requirements seem to be necessary in the present statutory scheme.
[23] To be valid the CCN needs to clearly identify the contraventions that are relied on (section 139(2)(b) and (c)), and it also needs to fix a reasonable time to permit the contraventions to be remedied (section 139(2)d). It is then necessary for the Body Corporate to prove non-compliance by the agent with the demand before any entitlement will arise to issue a transfer notice (section 139(2)(e)).
[24] It also seems to me that the statutory scheme contemplates an existing situation of which the Body Corporate fears a continuation or which still has some ongoing effect. I do not find it necessary to base my judgment on this particular point, but it is difficult to think that this statutory scheme contemplates past completed breaches that are over and done with. The conduct to which the code applies is the agent’s conduct under the relevant service or agency agreement. It is theoretically possible that the agent could contravene the code without committing a breach of some duty under the relevant contract, but in the scheme of things this is highly unlikely. The statutory context is that a reasonable period must be specified for the remedying of the contravention, and this seems to contemplate that there be some ongoing situation or behaviour that needs to be remedied. Whether the agent is capable of remedying the contravention and whether he or she does so is of course something else, but any failure of the agent to remedy any specified contravention will entitle the Body Corporate to take the next step of insisting upon a transfer of the management rights to someone else. It seems unlikely that contraventions that do not have some current or ongoing effect, or contraventions based upon contractual conduct that has been waived, were intended to confer such a right on the Body Corporate.
[25] The CCN here is a seven page document. I am prepared to observe at the outset that despite its potentially severe consequences the document throughout is permeated with generalisation, resembles a diatribe more than clear allegations of contraventions, and displays an ongoing lack of specificity. It ends with a list of excessive demands for remedial action upon which the body corporate had no right to insist.
[26] The Code of Conduct which the agent is alleged to have breached is contained in schedule 2 of the BCCM Act. It consists of 11 requirements, most of which are very broad and aspirational. The present notice alleges contravention of seven of them.
[27] Each matter of complaint is framed in the words of the code, followed by numerous assertions which allegedly identify the contraventions.
[28] Eventually the CCN demands that in order to remedy the contraventions –
“The service contractor must comply with the following items within 14 days of the date of this notice.
1) Submit to the Body Corporate a written apology addressed to all unit owners for compelling the Body Corporate to incur unnecessary costs for responding to your applications to the CCT.
2) Submit to the Body Corporate a written apology addressed to the Committee for unprofessional behaviour at meetings and for offensive language and tenor used in written and verbal communications.
3) Submit to the Body Corporate a written apology addressed to the chairperson for claiming “she authorised the ‘savage berating of a customer service representative’ on her behalf” AND a written apology for swearing at the chairperson in a public forum.
4) Submit to the Body Corporate a written apology addressed to the Committee for stating in your 2009 CCT submission that members were “acting in their own self interest” in responses/ actions relating to your submissions.
5) Submit to the Body Corporate the details of the person who is to perform with reasonable skill, care and diligence the caretaking duties under the contract during the periods where either Mr Seed or Mrs Seed are absent from the complex.
6) Submit to the Body Corporate a written statement that you agree to:
a) Work cooperatively with the Committee and perform in your duties under the contract and insure that you are act at all times in the best interests of the Body Corporate
b) Refrain from intimidating behaviour and unprofessional language in your dealings with owners and the Committee
c)Use your best endeavours to ensure effective, accurate communication between trades people and the Committee and quality control of the work/repairs that have been done
d) Work with the Committee in choosing trades people that offer the Body Corporate cost effective value and quality services
e) Keep the committee informed of changes to your work situations and time away from the property in a timely manner and ensure that any required notification is given and consent is obtained pursuant to the terms of the contract.”
[29] The alleged contraventions and the details that purport to identify them will now be considered. Inter alia I shall advert to matters such as ambiguity, level of clarity, and particularity (including whether alleged incidents are sufficiently identified as to time or place). I am aware that a CCN is a commercial document and is not to be construed as a pleading, but the above matters are relevant considerations in determining whether the notice satisfies the statutory requirements. Obviously if they are too vague to be capable of meaningful response they will fail to comply. It is to be remembered that very often in such cases the allegations will be denied, and that there will have to be a legal determination of such issues by an adjudicator or this tribunal. Such determinations would be impossible unless the issues were reasonably defined from the outset.
[30] The first item is as follows:
“Knowledge of Act including Code
A body corporate manager or caretaking service contractor must have a good working knowledge and understanding of this Act, including this code of conduct, relevant to the person’s functions.
Details identifying the contravention;
The service contractor has demonstrated a lack of knowledge of the Act by making an application to the Commercial and Consumer Tribunal (“CCT”) (KC 008-09) seeking to compel the Body Corporate to review the remuneration and other terms under the contract without any entitlement for such review. The Body Corporate suffered significant financial determent in defending the proceedings that were erroneously commenced by the service contractor”.
[31] In my view the details that purport to identify the contravention fail to adequately underpin the principal allegation. It is a long bow to draw to suggest that the bringing of an unsuccessful application for relief proves that the unsuccessful party must necessarily lack “a good working knowledge and understanding of the Act”. Indeed, the available evidence shows that two decisions were given by Mr Dorney QC in litigation between the parties in the CCT namely KC004-07, decided on 26 August 2008, and KC008-09 decided on 2 September 2009. In the first of these the agent enjoyed considerable success, demonstrating that the Body Corporate’s interpretation of the agent’s duties and the demands that it had made were wrong in quite substantial respects, and consequently six declarations were made in the agent’s favour. It is true that a subsequent application by the agent (KC 008) was summarily dismissed. So the score after two contests was one-all. The failure of the Body Corporate in the many areas of dispute in the first proceeding could hardly be regarded as evidence that the Body Corporate and its committee lacked a good working knowledge and understanding of the Act, any more than the agent’s failure to obtain relief in the second proceeding could be so regarded. Indeed, differing views of the requirements of the contract rather than the Act seems to have been the primary source of these disputes. It is in any event difficult to consider that failure in one legal proceeding bespeaks an absence of good working knowledge and understanding of the Act.
[32] This alleged contravention is embarrassing and inadequately particularised; and the subsequent demand for remedial action through apology to the Body Corporate and all unit owners for his alleged lack of knowledge and understanding of the Act was one which the Body Corporate had no right to insist upon. In any event it is hard to see how providing such an apology would remedy his alleged lack of good working knowledge and understanding of the Act.
[33] Item 1 has no substance.
[34] Item 2 in the CCN is too long for useful quotation. It states the Code requirement of “Honesty, fairness, and professionalism”, and proceeds to assert the lack of those qualities on the part of the agent, more particularly on the part of Mr Seed. The code provision that is said to have been breached is that “a body corporate manager or caretaking service contractor must act honestly, fairly and professionally in performing the person’s functions under the person’s engagement.” The factual allegation to support this alleged contravention of the Code is that he assured the committee before receiving his assignment that Mr Seed would finish his employment in Brisbane and be permanently on site. At most, the above allegation is of a misrepresentation by Mr Seed before assignment. This allegation cannot sustain a failure to perform his functions honestly, fairly and professionally under the agreement. The supporting details on this issue do not allege any post-engagement breach of the agent’s obligations. Leaving aside any question of contested allegations of fact, the particulars fail to disclose any breach of the stated provision of the code.
[35] Within item 2 there is a further allegation under the “honesty” section, namely
“The service contractor was requested on two occasions by Mr and Mrs Wallis, the previous caretaking services contractors, by letter to retract untrue statements that were made to owners in regards to dealings with them”.
This allegation is short on particulars. It fails to identify the occasions by date or whether they were written or oral. It is an embarrassing allegation as the notice would not enable its recipient to understand with reasonable certainty what statements are alleged. Moreover it relies on events that may have occurred between the agent and a third party a long time ago and which do not appear to have any ongoing relevance.
[36] The same item (number two) of the CCN than proceeds to deal with lack of “fairness” on the part of the agent, particularising this as “repeated statements in CCT submissions and communications with the committee and owners that a contract was ‘minimalist’ and a ‘clean and tidy only contract’ even after the CCT has made rulings in consistent with those statements”. Once again there is insufficient particularity either of the “repeated statements” or of the rulings that are said to be inconsistent with those statements. I cannot tell which parts of Mr Dorney’s “rulings” are relied on, and do not think that the reasonable recipient could either.
[37] As a further particular of the lack of “fairness” allegation, the notice refers to a period of negotiation which was terminated by the “service contractor” (which is the term used in the CCN to describe the agent). It proceeds – “In all contract negotiations to date the service contractor has acted unfairly and unreasonably by, for example, demanding ‘a fair commercial price for an agreed list of tasks’ and arguing that ‘until this is done there is no way we will be prepared to discuses alternative scenarios’”.I find it hard to regard these statements as an example of unfair and unreasonable conduct, or that they in any way support the allegation of lack of fairness.
[38] Item two then proceeds to the subject of “professionalism” the lack of which is particularised as –
“Both representatives of the service contractor have been guilty of repeated verbal abuse towards several unit owners” and
“The service contractor has ignored a number of requests for the retraction of the defamatory statements”.
There is a further allegation critical of “the tone and language” of the agent, describing it as “unprofessional, irrational, threatening and offensive”, over a period of three years. No particulars are given of this, or of the further allegation that the agent “has on numerous occasions been uncontactable”.
[39] It is not necessary to discuss the allegations in this portion of the document any further. They are plainly too wide and fail to give a clear picture of what has to be rectified. It must also be said that they descend to the level of childish bickering.
[40] The third item alleges breach of the Code’s requirement that reasonable skill care and diligence must be exercised in performing the relevant functions. Seven paragraphs follow. Each of these is either too broad and unparticularised, or is an allegation of something that happened in the past and has no current effect or relevance, followed by a statement of what the Body Corporate did in consequence. This item also fails to give the recipient a clear enough indication of relevant conduct that establishes a contravention.
[41] The fourth item raises an alleged failure to act in the Body Corporate’s best interests. The closest approach to any level of specificity is that the service contractor “has repeatedly refused to perform duties under the contract when directed..”, “has instigated a number of proceedings which have resulted in substantial legal and administrative costs for the Body Corporate..” and “has refused to communicate sensibly with the committee”.The same comments as have been made with respect to the preceding item are also applicable here.
[42] The fifth item alleges “fraudulent or misleading conduct”, although counsel for the Body Corporate indicated during the hearing that the Body Corporate does not assert that anyone has been guilty of fraudulent conduct. The Code provision relied on is
“A body corporate manager or caretaking service contractor must not engage in fraudulent or misleading conduct in performing the person's functions under the person’s engagement” .
The details to identify the alleged contravention are, once again, that the service contractor “falsely represented to the committee that, shortly after its engagement, both Mr Seed and Mrs Seed would be available to perform the duties under the contract”. As earlier observed, this allegation relates to conduct preceding the commencement of the agent’s duties under the service contract, and no breach is disclosed of the relevant Code provision.
[43] The sixth item is “Unconscionable Conduct”. The allegations here are that the service contractor “instigated baseless actions against the Body Corporate as a means to negotiating amendments to the contract to the detriment of the Body Corporate” and that Mr Seed “has sworn at the chairperson and has engaged in tactics designed to intimidate committee members and owners...”. Once again the lack of specificity would make it impossible for the recipient of the notice to clearly identify the contravention or the conduct that is to be remedied, or for there to be any manageable litigation in the event that the agent disputed the allegations (as they do).
[44] The seventh and final item of alleged contravention is of the code rule that obliges a service contractor to “take reasonable steps to ensure goods and services the person obtains for or supplies to the Body Corporate are obtained or supplied at competitive prices”.
The supporting detail is “the service contractor failed to appoint the committee’s recommended lawn contractor who would have provided a superior service for the same price being paid to the current contractors”.
[45] This seems to rely upon something the agent did at some unspecified time in the past. In the engagement of contractors it would be a difficult task to prove that one would have been better than another, and in any event, that would not amount to a contravention of the Code rule, which is based on a failure to take reasonable steps in the obtaining of goods and services, to ensure that they are obtained at competitive prices. Once again the supporting allegations are too broad and do not constitute a breach of the relevant rule.
[46] In summary, I consider that the CCN fails throughout to satisfy the requirements of section 139(2)(c) of the BCCM Act because it does not provide details sufficient to identify the contraventions.
[47] The Body Corporate also fails in my view to satisfy the requirements of section 139(2)(d) to provide a reasonable period within which the agent must remedy the contraventions. The fixing of a reasonable time for remedying a default is not always an easy task. If a specified contravention is the failure to perform a task such as cleaning a particular area, the reasonable time could be very short, defined by the time in which it could be reasonably be expected to be done. In other cases where major works would need to be undertaken it may be necessary to allow a substantial period to rectify a default, and a reasonably substantial time would have to be given. But in a situation like the present where the agent is accused of inadequate understanding, lack of honesty, fairness and professionalism lack of skill care and diligence and other deficits of character or capacity, an element of difficulty arises. What time is a reasonable time for a person to change his or her character? Or to become an honest man or woman? Or a skilful one? Or to arrange for goods and services to be supplied at competitive prices? An agent facing such allegations can only remedy such matters by showing that he or she is complying with the Code in all the specified respects. I should have thought that it would reasonably take longer than a fortnight to demonstrate the complete turn around that the Body Corporate was demanding. I am reluctant to say what a reasonable period would be for compliance with such far reaching general demands, but find it difficult to think that it should be less than a month.
[48] The Body Corporate’s stance on remedying the contraventions is not helped by its demand that the agent “must comply” with its demands for written apologies on all manner of issues, and other demands that it was not entitled to make including the submission by the agent of details of the person who is to perform caretaking duties when either Mr Seed or Mrs Seed are absent from the complex, which is a matter neither required by the contract nor specified as a contravention of the Code.
[49] The CCN concludes with the statement
“The Body Corporate may without further notice, give the Service Contractor a transfer notice pursuant to section 140 of the Act if the Service Contractor does not comply with this Code Contravention Notice within the time stated in this notice OR if the Body Corporate reasonably believes the Service Contractor, after being given the notice, has contravened a provision of the code.”
It is to be noted that the Body Corporate’s alleged entitlement to issue a transfer notice is based on anticipated non-compliance by the agent with demands the Body Corporate was not entitled to make.
[50] However the making of unjustified demands for compliance will not of itself invalidate a notice if it is in other respects compliant with the Act. In the present matter the unjustified demands are merely a confusing and aggravating circumstance in an otherwise defective notice.
[51] For the above reasons I hold that the CCN fails to satisfy the requirements of section 139 of the BCCM Act. It will be appropriate to make a declaration of that effect.
Do the management rights include lot 101?
[52] The question at issue is whether lot 101 is part of the management rights that are subject to transfer in the event that a valid CCN and transfer notice are given.
[53] There is nothing hypothetical about such a question, because the body corporate, as it seems to me, despite having failed with the present CCN, is in a position to issue a valid one based on the agent's abandonment of their duties under the contract after 31 July 2010, if it chooses to do so. The answer to the present question will determine whether or not the body corporate could in such event require a transfer of the caretaker’s unit.
[54] Mr Carrigan, on behalf of the agent, contended that the “management rights” under section 140 of the BCCM Act do not in the circumstances include lot 101 in which the agent resides, and that accordingly if a valid CCN is given the Body Corporate is only entitled to require a transfer of the managing, caretaking and letting rights, and that his clients, Mr and Mrs Seed, could not be required to transfer the unit.
[55] The term “management rights” is defined in schedule 6 of the BCCM Act as follows
Management rights, of a letting agent for a community titles scheme, means—
(a) the letting agent business for the scheme, including the letting agent authorisation; and
(b) the business conducted by the letting agent under a service contract for the scheme, including the service contract; and
(c) the letting agent’s interest in a lot used for conducting a business mentioned in paragraph (a) or (b); and
(d) any right of the letting agent to use and occupy a part of the common property for a business mentioned in paragraph (a) or (b).
[56] There are references in that definition to “letting agent” and “letting agent business” both of which terms are separately defined in section 16 of the Act, which provides
16 Meaning of letting agent and letting agent business
(1) A person is a letting agent for a community titles scheme if the person is authorised by the body corporate to conduct a letting agent business for the scheme.
(2) A person conducts a letting agent business for a community titles scheme if the person conducts, subject to the Property Agents and Motor Dealers Act 2000, the business of acting as the agent of owners of lots included in the scheme who choose to use the person’s services for securing, negotiating or enforcing (including collecting rents or tariffs for) leases or other occupancies of lots included in the scheme.
(3) For subsection (2), a reference to a lot does not include a reference to a community titles scheme.
(4) It is not relevant to the identification of a person as a letting agent under this section that the person also conducts an ancillary business or other activity.
…
[57] The first thing to notice is that the agent is a “letting agent” for the purposes of the Act because Mr and Mrs Seed are authorised by the relevant contract to conduct such a business (See s 16(1)). It is immaterial that they did not in fact conduct such a business and were not expected to do so. The second thing to notice is that although they are “a letting agent” under s 16(1) they did not at any stage conduct a letting agent’s business under section 16(2) because that definition requires the actual conduct of such a business.
[58] Thus if one looks at the definition of “management rights” on the uncontested facts in this case:
1) There is no “letting agent business” that exists under paragraph (a) of the definition;
2) There was a business conducted by the letting agent under a service contract (as defined in schedule six). It follows that that business is comprehended within the term “management rights” under paragraph (b) of the definition;
3) The key to the matter lies in paragraph (c) of the definition. Mr Carrigan submitted that lot 101 was not covered because it was not “used for conducting a business mentioned in paragraph (a) or (b)”. I accept his submission that the agent was and is not licensed and does not conduct the type of business contemplated by chapter 4 of the Property Agents and Motor Dealers Act 2000 which is used in the definition of “letting agent business”, and therefore does not satisfy paragraph (a). But in my view 101 was clearly used for conducting a business mentioned in paragraph (b), namely the caretaking business, and that it therefore is in turn comprehended by paragraph (c). Mr and Mrs Seed conducted the caretaking business under a “service contract” as defined (see Schedule 6 and ss 15 and 16), and did so from lot 101.
[59] Mr Carrigan’s submission continued that clause (b) of the management rights definition can only apply to the letting agency business that his clients were entitled to carry on by clause 4.1.1 of the contract, ie, the business of letting units. He pointed out that none of the duties mentioned in clause 3.1 (dealing with duties of the caretaker) requires the caretaker to use lot 101 whereas clause 4.1.1 confers a right to “carry on from the caretaker’s unit and the foyer area… The business of letting units”.That however does not preclude its use for the service or caretaker contract. I note that subsequent provisions in the same clause 4 of the contract give protection to “any business or service (including that of letting units) of the same or similar nature to the business or service conducted or rendered by the caretaker within the building” (my emphasis). That is plainly a reference to the caretaker’s business referred to in clause 3. Clause 4.1.7 similarly refers to the “business which the caretaker is entitled to conduct or provide pursuant to this agreement”. Furthermore, clause 5, which deals with assignment, demonstrates an intended linkage between lot 101 and performance of the caretaker’s duties (see 5.1 (f) and 5.1 (g)).
[60] In order to obtain a declaration the agent would need to prove as a fact that lot 101 was never used for conducting the service contract. On the evidence before me this has not been proved, and, to the contrary, the contract refers to the unit as “the caretaker’s unit” and the evidence shows that the agent was the resident caretaker which conducted its business from that unit.
[61] Even more directly and importantly, clause (b) of the definition of management rights expressly includes a service contract, and I have no doubt that the relevant contract is such a contract.
[62] Plainly lot 101 was “used for conducting a business mentioned in paragraph ...(b)” within the meaning of paragraph (c) of the definition of management rights. The agent’s interests in it are therefore comprehended by the definition.
[63] It follows that the agent is not entitled to the declaration sought.
[64] Accordingly, if the Body Corporate were to issue a seemingly valid code contravention notice (for example based upon code contravention is demonstrated by the total failure of the agent to perform their duties under the agreement after July 2010), and subsequently to become entitled to issue a notice requiring transfer under section 140, the management rights that would need to be transferred would include unit 101.
Orders
[65] A declaration will be made that a code contravention notice issued by the Body Corporate on 12 November 2009 is invalid.
Costs
[66] Both parties applied for costs orders against the other in the event of success. Section 100 of the QCAT Act prohibits the awarding of costs unless provided otherwise under the QCAT Act or an enabling Act. Counsel did not refer to any such provisions. In any event I would have been disinclined to order costs as the Applicant succeeded on one major issue and failed on another, and was somewhat tardy in seeking relief or contending for invalidity, during which time the Body Corporate took further steps and incurred further costs. There will be therefore be no order as to costs.
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