Another victory for highrise resident manager

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In a resounding victory for our client a resident manager of a large Surfers Paradise highrise building, the Queensland Civil and Administrative Tribunal:

·            ruled that two breach notices, and part of a third, were invalid;

·            found that our client had complied with the two other breach notices and the parts of the third notice that was valid;

·            granted our client a permanent injunction restraining the body corporate from relying on the notices to terminate the management agreement; and

·            directed that the body corporate immediately withdraw the notices. 

The case demonstrates yet again the futility and waste of owners’ funds in bodies corporate pursuing dubious breach notices against resident managers rather than working cooperatively and sensibly to address any perceived concerns. The decision sets out some excellent guidelines for determining which breach notices will be considered reasonable and when a body corporate is acting unreasonably in issuing breach notices. We have seen many bodies corporate go down the path of issuing impossible to comply with breach notices or ones that make unreasonable demands. This decision reinforces that such notices are invalid.

In this case the breach notices were issued over three months in late 2010. They covered a range of matters including the following:

·            Failure to report rooftop waterproof membrane deterioration – this part of the notice was ruled to be invalid as it demanded, impossibly, the remedying of a breach that could no longer be remedied;

·            Failure to attend the complex to supervise body corporate staff – the manager was found to have complied with this part of the notice;

·            Body corporate staff, being supervised by the manager, doing work for the manager or residents – in the absence of any clear evidence of this happening after the notice was issued, the manager had complied with the notice;

·            Failure to follow directions from the committee to make recommendations and take consequential action in relation to certain common property areas and facilities – the body corporate’s failure to engage with the manager who sent emails about these things rendered the committee’s notice demanding compliance with the directions unreasonable;

·            Failure to ascertain or report on the deteriorating condition of balustrades – as these alleged breaches were in the past and were impossible to now remedy, the notice was unreasonable and invalid; and

·            Failure to provide as demanded a written report on the balustrade deterioration within 14 days – this notice was held to be invalid as the period given to comply was clearly unreasonable having regard there being nearly 130 units in the complex.

QCAT also rejected the body corporate’s claim that our client was guilty of gross negligence in the performance of the manager’s duties. In response to claims that the manager should have identified and reported on the deterioration of the rooftop membrane the QCAT member commented that whilst it is reasonably expected for a building manager to have a greater awareness of building issues than the average person a reasonably competent manager would not have seen a need to make a report about the roof deterioration in the absence of some acute problem such as a leak into an apartment. The member also commented that a manager could not reasonably be expected to suggest different materials or protective coating to be utilised.

The QCAT member also found that in the circumstances where no owner or occupant had ever complained about the deterioration of the balustrades, the manager was not negligent, and certainly not grossly negligent, in not earlier determining the relatively minor degree of deterioration in six or so apartments.

It is disappointing that a manager such as our client is this case should be put to the expense of a hearing in QCAT to deal with the actions of a seemingly ill-advised committee. Committees should realise that confrontation and litigation rarely if ever achieve a victory for any party.

Whilst we will make every possible effort resolve body corporate disputes in order to avoid the expense and trauma that litigation places on our clients, any body corporate that refuses to make a similar effort can expect an outcome similar to that which we achieved for our client in this case.