Never Ever Give Up

Published: 18 May 2010.

Contributed by Frank Higginson of Hynes Lawyers

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The position a committee takes on a matter can hold a fair degree of sway with owners. This comes by virtue of the nature of the title of their office. The reality (and danger) is that the appointment to that office can quite often come about without actual mandates from owners, election competition or any real qualifications.
When a committee and a resident manager begin a dispute, it is quite common for a fair proportion of owners to side with the committee based on the assumption that the committee simply must be right. If a committee alleges that a caretaker is in breach of their contract, then lot owners can sometimes take the committee’s side without giving a second, or any independent thought, to the matter.

Owners sometimes believe that as committee members are elected representatives that voluntarily give up their time to help administer the body corporate, why wouldn’t they be doing the right and proper thing? The unfortunate reality is that good decisions are not always made by those that hold positions motivated by non-financial gains (such as voluntary service on a committee).

We frequently see cases where a committee’s dispute with a resident manager is fuelled by a misunderstanding of the scope of the duties and the standard of maintenance expected of the resident manager under their management rights agreement. While these misunderstandings can usually be resolved by open dialogue and negotiations, some committees and their advisors think that the best option in these disputes is to simply go as hard as possible as early as possible and issue breach notices. In the management rights legal sector, the issue of a formal breach notice is about as serious a step as can be taken, as it can lead to the termination of the management rights agreement.

This matter was recently brought to our attention when we acted for a resident manager that was in dispute with a committee for just over a year and a half.  During this period our client was:

  • issued with eight breach notices in the space of six months;
  • the subject of numerous ‘information nights’ during which the committee would lecture lot owners on our client’s failings; and
  • victimised by the committee and lot owners over most problems that arose with the scheme’s administration, irrespective of whether or not they fell within the scope of our client’s duties.

With your back to the wall and faced with such intense opposition, it would be easy to simply give up, which would lead to the termination of the management rights agreement. It could also lead to being pressured into unfair or uncommercial variations to the caretaking duties or the caretaking remuneration to resolve the issues.

The alternative is to fight back. Together with our client, we created a comprehensive litigation strategy to counter the committee’s aggressive position and to improve our client’s standing in the eyes of the lot owners.
At the recent conclusion of the matter, the end results were:

  • all breach notices issued against our client were withdrawn;
  • the attempt to terminate our client’s management rights agreements have been abandoned;
  • an extension to the our client’s management rights agreement was passed by a huge majority of owners; and
  • the committee and caretaker now enjoy a healthy working relationship. Incredibly, most of the same committee members still retain their positions on the committee, but have completely changed their views.

The moral of the story? Never ever give up! …and of course, make sure you get the right advice.


Reply from: Joe Slattery

11:19am Tuesday, 18 May 2010

Just click here to upload your profile portrait now - its easy!Hi Frank, I'm glad I read this article as I am going through massive problems with some committee members here, very similar to the case you mentioned. I tabled a managers report at a meeting on 7th March outlining the behaviour of 3 committee members, this was done so that it would be distributed to all the owners in the minutes, but these minutes have not been sent out to the owners as it is very critical of some committee members, I am going to write to the commissioners office to see if they can do something. This bad blood appeared after I tabled a remuneration review on 29th May 2009 to which I am still awaiting a response.


Reply from: kerrie-ann kallis

8:30am Thursday, 20 May 2010

Just click here to upload your profile portrait now - its easy!Hi Frank

Oh am so glad for your insiteful article. We are going through hell with our Committee who issued us with a non signed non dated notice to Remedy on 10 May 10. On Friday the 14 May 10 we received in the mail a dated and signed notice. HOWEVER the dated document was back dated to the 6th May 10.

The Body Corporate Manager with the Chairperson said they wanted myself out becaue I had signed an affidavit for Court proceedings against the committee for 8 serious breachs of the Fire act. The breachs date back 5.5 years prior to us purchasing the MR's, The QFRS notice to remedy was issued on us 4.5 weeks after we took possession of the complex.

Not one of our Management reports have been tabled, the minuted information suits the committee only as you can see that the due dilligence did not uncover this gross misconduct by a committee elected to add value to all lot Owners,



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