Management rights disputes

In December 2012 the Queensland government announced that it would undertake a review of the Queensland Civil and Administrative Tribunal Act 2009 and is taking submissions from interested parties.

This is important to the management rights industry because QCAT has sole jurisdiction for the resolution of a large number of management rights disputes. While the QCAT Act review is broad ranging because it deals with the many areas it was set up to oversee, specifically relevant to management rights and bodies corporate is the way in which the effectiveness and the jurisdiction that QCAT has to resolve complex body corporate disputes.

With the establishment of QCAT in 2009, the Body Corporate and Community Management Act 1997 was amended to dispense with compulsory specialist adjudication for contract disputes, (like disputes about caretaking and letting agreements) and direct that those disputes be handled by the new tribunal.

In the subsequent years various cases have demonstrated there are difficulties faced by parties in various areas of the conduct of tribunal proceedings.  

It is still unclear the extent to which QCAT has jurisdiction to decide disputes between litigants. Whilst the QCAT Act provides that the tribunal has the power to grant injunctions and interlocutory injunctions, to prevent termination or attempted termination of caretaking and letting agreements for example, it remains unclear whether QCAT would have the power to make other equitable orders such as specific performance, rescission or relief against forfeiture of agreements.

Similarly, while it is clear that the QCAT Act legislates that the tribunal has power to refer a case to another jurisdiction, the interaction with the BCCM Act makes it unclear whether such a receiving court or tribunal would have jurisdiction to resolve the referred complex dispute.

A good example of the confusion about jurisdiction is whether or not the tribunal would have the power to resolve allegations made pursuant to federal legislation such as the Competition and Consumer Act 2010 (formerly the Trade Practices Act). There is no suggestion in the QCAT Act that it has any cross vested jurisdictional capacity.

On a more philosophical note, and particularly relevant to bodies corporate, management rights operators and other stakeholders in the process, is whether, from a policy point of view QCAT should be the determining entity concerning disputes that may involve assets of such substantial worth. Some management rights disputes involve assets involving millions of dollars. One has only to have regard to the litigation proceeding in New South Wales between Meriton Apartments and the bodies corporate for World Tower that involves a multimillion dollar business. If that litigation were in Queensland, in a compulsory way, QCAT would be the starting point for resolution of that dispute.

Some might think with some justification that disputes involving complex legal arguments and assets of significant worth ought to be resolved by a court of competent jurisdiction. I am of that view.

At the lesser end of complication, other policy issues such as, in these types of complex disputes should it not be the right of a party to be legally represented as distinct from the current status quo which requires that a party might only be legally represented by order of the tribunal.

Further, given the complexity of these disputes and the assets in dispute, should it not also follow that a successful party should be entitled to a costs order, as distinct from the status quo that starts from the basis that each party pays its own costs.

Another aspect worth consideration for the legislation review is a necessity to clear up procedures for body corporate levy recoveries. We have seen examples for clients where some owners have steadfastly refused to pay body corporate levies for no good legal reasons, with the legislation not providing any mechanism to permit the tribunal to cut through some of the rubbish served up as a means of defence for a non-payment.

In addition to making our own submissions, SPG will be assisting ARAMA and other stakeholders in relation to submissions which they will be delivering to the Queensland government. Submissions are required by 22 February 2013.

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