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  • Unreported Judgment

Tang v Body Corporate for Greenly Gardens CTS 41566

 

[2019] QCAT 207

 

QUEENSLAND CIVIL AND ADMINISTRATIVE TRIBUNAL

 

CITATION:

Tang v Body Corporate for Greenly Gardens CTS 41566 [2019] QCAT 207

PARTIES:

jin tang

 

(applicant)

 

v

 

Body Corporate for Greenly Gardens CTS 41566

 

(respondent)

APPLICATION NO/S:

OCL017-18

MATTER TYPE:

Other civil dispute matters

DELIVERED ON:

30 July 2019

HEARING DATE:

10 December 2018, 17 May 2019

HEARD AT:

Brisbane

DECISION OF:

Member Howe

ORDERS:

  1. Application dismissed.
  2. The applicant file and serve any submissions as to costs by 4pm on 9 August 2019
  3. The respondent file and serve any submissions as to costs in reply by 4pm on 21 August 2019
  4. The costs of the proceeding will be determined on the papers without an oral hearing.

CATCHWORDS:

REAL PROPERTY – STRATA AND RELATED TITLES – BODY CORPORATE: POWERS, DUTIES AND LIABILITY – GENERALLY – where  the body corporate engaged a caretaker and letting agent – where the start date of the engagement was to start from when the caretaker and letting agent obtained a resident letting agent’s licence – whether the engagement and authorisation was void under the legislation – where the caretaker and letting agent failed to obtain the resident letting agent’s licence – where the caretaker and letting agent always held a full real estate agent’s licence - where the legislation required the term to commence within 12 months of the body corporate’s resolution to engage the caretaker and letting agent

CONTRACTS – GENERAL CONTRACTUAL PRINCIPLES – CONSTRUCTION AND INTERPREATION OF CONTRACTS – IMPLIED TERMS – GENERALLY – where parties entered into written agreements – where it was unclear what date the agreements commenced – whether there was an implied term that the agreements commenced on execution – whether there was an implied term that the agreements commence within a reasonable time – where a reasonable time was 12 months from the body corporate’s resolution to engage the caretaker and letting agent

Acts Interpretation Act 1954 (Qld), s 14B

Body Corporate and Community Management Act 1997 (Qld), s 112(2)

Queensland Civil and Administration Tribunal Act 2009 (Qld), s 60

Body Corporate and Community Management (Accommodation Module) Regulation 2008 (Qld), s 112, s 114, s 117, s 119

Celik Developments Pty Ltd v Mayes [2005] QSC 224

Codelfa Construction Pty Ltd v State Rail Authority of NSW (1982) 149 CLR 337

Hannah & Ors v TW Hedley [2010] QCA 256

Lake Laurel Pty Ltd v Nicholas Constructions Pty Ltd (No. 2) [2019] QSC 145

MNM Developments Pty Ltd v Gerrard [2005] QCA 230

Pazcuff Pty Ltd v Farmilo & Ors [2009] QSC 230

Perri v Coolangatta Investments Pty Ltd [1982] HCA 29

Randall v Body Corporate for Runaway Cove Bayside CTS 25498 [2011] QCATA 10

Telina Developments Pty Ltd v Stay Enterprises Pty Ltd [1984] 2 Qd R 585

APPEARANCES & REPRESENTATION:

 

Applicant:

B Kidston, instructed by Mahoneys

Respondent:

J Mitchenson, instructed by Bugden Legal

REASONS FOR DECISION

  1. [1]
    On 6 July 2010 the respondent entered into two agreements with Ms Yixen Li. One was a caretaker’s agreement and the other a letting agent’s authorisation (collectively ‘the agreements’).
  2. [2]
    The original owners of the scheme were Ms Li and Mr Zheng Wang (as Trustees).
  3. [3]
    Clause 9.1 of the caretaking agreement provided:

The term of this agreement shall be for 15 years commencing on the date of issue of a restricted letting agent’s licence to the agent in respect of the property in accordance with Section III of the Property and Motor Dealers Act.

  1. [4]
    There was a similar provision[1] in the letting agent authorisation.
  2. [5]
    On 23 July 2014 Ms Li assigned her interest in the agreements to the applicant,
    Ms Tang. Ms Li and then Ms Tang performed the work required by the agreements. There were no significant complaints made against either of them in respect of the work.
  3. [6]
    On 2 February 2017 the body corporate’s solicitors wrote to Ms Tang however, saying the agreements did not comply with s 112(2)(c) of the Body Corporate and Community Management (Accommodation Module) Regulation 2008 (Qld) (‘the AM’) because they failed to specify when the respective terms began or ended. As such, the body corporate had concerns about the validity of the agreements. On
    31 August 2017 they informed Ms Tang that they considered the agreements were void.
  4. [7]
    Ms Tang brings the within proceedings seeking a declaration that the caretaking agreement and the letting authorisation are not invalid by operation of the legislation and seeking specific performance of a deed of acknowledgement of the validity of the arrangements. Additional relief initially sought of damages for breach of contract was not pursued at hearing, nor a claim against Ms Li who had previously been joined to the action as a respondent.
  5. [8]
    As relevant the body corporate in turn seek a declaration that the agreements are void by operation of s 114(1) and s 115(1) of the AM.
  6. [9]
    Both parties ask for costs.

The legislation

  1. [10]
    The AM provides:

114 Form of engagement

(1) The engagement of a person as a body corporate manager or service contractor is void if the engagement does not comply with the requirements stated in subsection (2).

(2) The engagement must—

(a) be in writing; and

(b) state the term of the engagement, including—

(i) when the term begins and when it ends; and

(ii) the term of any right or option of extension or renewal of the engagement …

117 Term of engagement of service contractor

(1) The term provided for in the engagement of a person as a service contractor (after allowing for any rights or options of extension or renewal) must not be longer than 25 years.

Example—

The engagement of a service contractor begins on 1 January 2009 and is for a term of 15 years with a right of renewal of 10 years. The engagement cannot end later than 31 December 2033.

  1. [11]
    The legislation makes almost identical provision for an authorisation of a person to act as a letting agent pursuant to ss 115 and 118 respectively. Regardless, whether it be an engagement of a service contractor or an authorisation of a letting agent, the legislation requires the engagement or authorisation to be in writing and that it state its term including when the term begins and when it ends.

The claims by the parties

  1. [12]
    Ms Tang says a calendar start date of the term is not required. All that is necessary to comply with the AM requirements is a mechanism whereby a commencement date may be fixed or ascertained.
  2. [13]
    She submits the clause in the agreements is not so nebulous, vague or uncertain that one cannot work out whether or not it has been complied with. The term commences when the requisite licence is obtained. It ends 15 years later.[2]
  3. [14]
    The requirement about a licence, she says, was satisfied immediately on execution of the agreements because Ms Li held at the time a full real estate agent’s licence. That vitiated the need to obtain a resident letting agent’s licence.[3] Her real estate agent’s licence let her do all things a resident letting agent’s licence did. She submits it was an implied term of the agreements that if she already held a sufficient licence, such as a real estate agent’s licence, at the time of executing the agreements, the term of the agreements would commence as from the date of execution.[4]
  4. [15]
    For its part, the body corporate maintains the agreements were invalid because the commencement date was subject to a contingency that might not occur or occur at an indeterminate time without the knowledge of the body corporate and outside the control of the body corporate.
  5. [16]
    Alternatively, says the body corporate, if the agreements were not void under the AM then it was in any case an implied term of the agreements that Ms Li would obtain a restricted letting agent’s licence within a reasonable time of entering into the agreements. A reasonable time was not 7 years, which was when Ms Tang finally obtained a restricted letting agent’s licence. The body corporate was therefore entitled to terminate the agreements on 31 August 2017 when its solicitors informed Ms Tang that the agreements were void.

Start date

  1. [17]
    The AM provisions require that the term of engagement or authorisation be in writing and the term stated. Further, it must state when the term begins and when it ends. The provisions do not say the requirement to state when the term begins and when it ends can only be met by fixing a calendar date for either.
  2. [18]
    I accept the legislation is not clear on the point. It is a significant issue. The body corporate suggests the explanatory notes accompanying the passing of the AM are available[5] to provide guidance about the correct interpretation to be given the provisions. As relevant the explanatory notes say:[6]

Form of engagement or authorisation

The new Accommodation Module prescribes that an engagement or authorisation is void unless it is in the form required by the module. This restriction is a consumer protection measure that seeks to ensure full disclosure to the body corporate about, for example, the term of the contract, the basis of payment for services and the role to be performed. This information is necessary so the body corporate can make an informed decision about whether to engage or authorise a person.[7]

  1. [19]
    What the explanatory notes make clear is that ss 114 and 115, both provisions headed respectively Form of engagement and Form of authorisation, are intended to be consumer protection provisions with the aim of ensuring full disclosure is made of the term of an engagement or authorisation to the body corporate.
  2. [20]
    Consumer protection is one of the secondary objects of the Body Corporate and Community Management Act 1997 (Qld) (‘BCCM Act’).
  3. [21]
    Certainly there may be circumstances where a calendar start and end date of a proposed engagement or authorisation may not be known but it is appropriate not to delay. Management rights are commonly put in place during the original owner period of control of the body corporate and the scheme. Where all the lots in a scheme have not yet been sold purchasers may find established management and service contracts attractive. The original owner may not know exactly when the caretaker’s responsibilities will be required to start or all the units occupied.
  4. [22]
    By s 35 of the Property Agents and Motor Dealers Act 2000 (Qld) (repealed) (‘PAMDA’), which applied at the date of execution of the agreements, a person who applied for a restricted (resident) letting agent’s licence was required to satisfy the chief executive administering the licencing scheme that the person applying already had body corporate approval to carry on the business of letting lots in the building complex. That timeline would require body corporate approval before being licensed (at least where the person applying had no existing agent qualification). If so, the start of a term of engagement or authorisation contingent on obtaining a restricted letting agent’s licence is understandable.
  5. [23]
    There is also s 119 to be considered. That provision provides that a resolution of a body corporate approving the engagement or authorisation of a person as caretaker or letting agent is of no effect if the term does not start within 12 months of the passing of the resolution. This provision in particular suggests to me that the legislative scheme with such matters contemplates and accepts that an actual calendar start date may not be known when a resolution is passed. That is acceptable, but the legislation provides a sunset clause, the engagement or authorisation must start within 12 months.
  6. [24]
    I conclude that the agreements did not offend the AM provisions about form simply because they did not specify a calendar date of commencement or end. They are not void on that basis. The agreements contain a mechanism whereby a commencement date may be fixed or ascertained on the face of the documents. I conclude that is sufficient compliance with ss 114 and 115.
  7. [25]
    Here, under the agreements the term was to commence on the day Ms Li obtained a resident letting agent’s licence.

Implied term as to date of commencement

  1. [26]
    Ms Tang says the requirement about licensing was satisfied immediately on execution of the agreements because Ms Li held at that time a full real estate agent’s licence. There was no need for her to obtain a resident letting agent’s licence as well. Ms Li could do all things a licensed resident letting agent could do. Ms Tang says it was an implied term of the agreements that if Ms Li already held a licence, such as a real estate agent’s licence, at the time of executing the agreements, the term of the agreements would start then.
  2. [27]
    Ms Tang suggests there was no disadvantage to the body corporate in either Ms Li or herself not obtaining resident letting agent licences[8] given both Ms Li and Ms Tang always held a full real estate agent’s licence.
  3. [28]
    I agree a full real estate agent’s licence allowed Ms Li to do all the things a resident letting agent’s licence permitted the licensee. However by former s 35 PAMDA it was provided:

35 Eligibility for resident letting agent’s licence

(1) An individual is eligible to obtain a resident letting agent’s licence for a building complex only if the individual—

(c) satisfies the chief executive that the individual—

(i) has body corporate approval for the individual or the person by whom the individual is to be employed to carry on a business of letting lots in the building complex under the authority of a licence; and

(ii) resides, or will reside if issued with a licence, in the building complex or, if the individual proposes to perform the activities of a resident letting agent for more than 1 building complex, in 1 of the building complexes; and

(iii) has a place, or will have a place if issued with a licence, in the building complex or, if the individual proposes to perform the activities of a resident letting agent for more than 1 building complex, in 1 of the building complexes, that will be the individual’s registered office….

  1. [29]
    Section 35 placed an additional and rather significant obligation on a person holding a resident letting agent’s licence of residence and maintaining business premises at the building complex.
  2. [30]
    It was not until the Property Occupations Act 2014 (Qld) came into effect on
    1 December 2014 that the attendant obligation on someone holding a resident letting agent’s licence to reside and have business premises at a building complex was relaxed. Perhaps Ms Li would not have been able to obtain a resident letting agent’s licence if she had applied. The request to the Queensland Land Registry to record the first community management statement for Greenly Gardens was made on 24 June 2010.[9] According to the body corporate roll of registered owners of a lot in the complex as at July 2010, Ms Li was not one of the 23 owners.[10] It is unclear whether she ever resided at the building complex during the term of the agreements either as owner of a lot or lessee, or had business premises there.
  3. [31]
    Ms Tang suggests it was not important to the body corporate to have a letting agent living on-site with an office in the building complex. She says if those things were required they could have been added to the agreements. I agree. The problem is of course that they were not. What was expressly included was the requirement to obtain a resident letting agent’s licence.
  4. [32]
    When the agreements were signed the original owners held control. Perhaps it was considered in the best interests of the body corporate and lot owners to have a resident letting agent. There was of course an obligation on the original owners to exercise reasonable skill, care and diligence and to act in the best interests of the body corporate in ensuring the terms of engagement or authorisation achieved a fair and reasonable balance between the interests of the caretaker/agent and the body corporate remaining in place after the original control period ended.[11]
  5. [33]
    Had the real estate agent’s licence been intended to be sufficient or the resident letting agent’s licence unnecessary, why add that as an express requirement? The fact that Ms Li was an original owner (developer) of the scheme[12] cannot be ignored. The original owners usually control the scheme until the lots are sold and they generally are responsible for drawing up the caretaking and letting rights documents.
  6. [34]
    IN MNM Developments Pty Ltd v Gerrard[13] the Court of Appeal considered a matter involving a sale of a unit where a PAMDA provision obliged the respondent vendor to attach to the contract of sale as its first or top sheet a warning statement advising the purchaser of certain rights. If that was not done the purchaser gained a right to terminate the contract by notice prior to settlement. The purchaser proceeded to terminate the contract claiming the warning statement was included but not attached as its first or top sheet when the various documents were faxed to him. Chief Justice de Jersey said this about interpreting legislation intended to provide consumer protection:

[16] The context of the requirement set up by s 366 tells against a liberal interpretation of that requirement. Chapter 11 of the Act, in which s 366 occurs, contains a detailed set of technical requirements plainly directed to ensuring a form of consumer protection for purchasers of residential property. One of the objects of the Act, stated in its preamble, is “to protect consumers against particular undesirable practices”. That protection extends, in cases like these, to giving a purchaser a right to terminate even for quite technical contraventions, and whether or not the purchaser has suffered any material disadvantage…[14]

  1. [35]
    In Celik Developments Pty Ltd v Mayes[15] White J also had before her a vendor matter but this time involving the sale of a unit and the issue was again whether the obligatory information sheet was appropriately attached to the contract. She said this about the BCCM and that Act having a consumer protection bias:

[24] The BCCM Act has as its primary object the provision of flexible and contemporary communally based arrangements for the use of freehold land having regard to the secondary objects. Those secondary objects are, inter alia, to provide an appropriate level of consumer protection for owners and intending buyers of lots included in a community titles scheme, s 4(f). See discussion by Helman J in Devine Limited v Timbs [2004] QSC 24. So far as the arguments advanced on this application are concerned, the objects of the BCCM Act and the PAMD Act are the same – consumer protection – and call for an approach requiring strict compliance with the BCCM Act.[16]

  1. [36]
    That requirement, that legislative provisions having a consumer protection purpose are to be strictly complied with, was confirmed by the Court of Appeal in Hannah & Ors v TW Hedley.[17]
  2. [37]
    The AM provisions under consideration have a consumer protection purpose.
  3. [38]
    Once it is accepted that consumer protection is the rationale for the existence of the provisions then that fact determines the approach to its proper interpretation.[18] A consequence may be to allow remedies for quite technical breaches.[19]
  4. [39]
    Sections 114 and 115 are headed ‘Form’ of engagement and ‘Form’ of authorisation respectively. The provisions themselves go on to stipulate that the form of engagement or authorisation ‘must’ be in ‘writing’. The provisions call for the engagement or authorisation to ‘state’ when the term begins and when it ends.
  5. [40]
    There are no prescribed forms involved. The reference to Form of engagement and Form of authorisation in the headings clearly refer to the subsequent requirement in the body of the provisions that the engagement or authorisation be in writing and state the term of engagement or authorisation.
  6. [41]
    I conclude the provisions are highly prescriptive consumer protection provisions and strict compliance is necessary. Strict compliance required either a calendar date for the beginning or end of the term of the agreements be stated or the mechanism for calculating the beginning and end be clearly set out in the actual body of the documents. If a term has to be implied to achieve that, the agreement is void under ss 114 or 115.
  7. [42]
    Though the sanction for breach of the provisions is severe I conclude that is the intention of the legislation.
  8. [43]
    But here, I also conclude, there is no warrant to imply such a term as suggested.
  9. [44]
    The express terms of the agreements governed the parties’ obligations and entitlements. To imply a term into a contract which is in writing, certain conditions must be satisfied. According to Mason J in Codelfa Construction Pty Ltd v State Rail Authority of NSW:[20]

The conditions necessary to ground the implication of a term were summarized by the majority in B.P. Refinery (Westernport) Pty. Ltd. v. Hastings Shire Council [1977] HCA 40; (1977) 52 ALJR 20, at p 26 : "(1) it must be reasonable and equitable; (2) it must be necessary to give business efficacy to the contract, so that no term will be implied if the contract is effective without it; (3) it must be so obvious that 'it goes without saying'; (4) it must be capable of clear expression; (5) it must not contradict any express term of the contract." (at p 347)[21]

  1. [45]
    The agreements are effective without the suggested implied term suggested by Ms Tang. She suggests they are necessary to give them business efficacy. The start date for the term was clearly identified in the agreements. It was the date Ms Li obtained a resident letting agent’s licence.
  2. [46]
    The implied term is not so obvious as to go without saying. Indeed after seven years the body corporate was unsure whether or not the agreements were validly on foot or not because the implied term was not obvious to the body corporate. They thought it was necessary for Ms Li to obtain a restricted letting agent’s licence because that’s what the agreements said.
  3. [47]
    Finally the suggested implied term clearly contradicts an express term of the agreements.
  4. [48]
    The proposed implied term that, given Ms Li already had a real estate agent’s licence the term of the agreements commenced on execution of the agreements, is not an implied term of the agreements.

Body Corporate resolution

  1. [49]
    By s 119 if the term of the engagement or authorisation does not start within 12 months after the passing of the resolution by the body corporate approving the engagement or authorisation then the resolution is of no effect:

119 Commencement of term of engagement or authorisation

(1) This section applies if the body corporate passes a resolution approving the engagement of a person as a body corporate manager or service contractor, or the authorisation of a person as a letting agent.

(2) The resolution is of no effect if the term of the engagement or authorisation does not start within 12 months after the passing of the resolution.

  1. [50]
    It was incumbent on Ms Li to obtain a restricted letting agent’s licence. When she did that the term of the engagement and authority would commence.  She did not do that within 12 months of the passing of the resolution to enter into the agreements. By virtue of s 119, after 6 July 2011 the resolution passed on 6 July 2010 that the body corporate enter into the agreements with Ms Li ceased to have effect and with it Ms Li’s engagement and authorisation was similarly of no effect.
  2. [51]
    Given that finding it is unnecessary to consider the body corporate’s additional contention that it was an implied term of the agreements that the resident letting agent’s licence had to be obtained within a reasonable time after execution of the agreements.
  3. [52]
    I note the body corporate’s proposition that general principle dictates that such a term might be implied.[22] If so the question would become, what is a reasonable time? As stated in Lake Laurel Pty Ltd v Nicholas Constructions Pty Ltd (No. 2):[23]

What is a reasonable time is a question of fact, to be determined having regard to all the circumstances, including those which are known or foreseeable at the time of the contract as well as subsequent circumstances and events.[24]

  1. [53]
    One such circumstance might be the legislation that governed the parties’ affairs at the time, in particular s 119. It might be argued that 12 months after passing the resolution would have been a reasonable time to obtain the resident letting agent’s licence.[25] But as stated, it is not necessary to determine that, nor therefore how ss 114 and 115 might potentially impact on application of the said general principle.

Relief

  1. [54]
    Ms Tang’s application must be dismissed. The only relief sought by the body corporate is a declaration. The Tribunal has no power to do that.
  2. [55]
    The Tribunal is empowered to make declarations under s 60 of the QCAT Act which provides:

(1) The tribunal may make a declaration about a matter in a proceeding—

(a) instead of making an order it could make about the matter; or

(b) in addition to an order it could make about the matter.

(4) The tribunal’s power under subsection (1) is in addition to, and does not limit, any power of the tribunal under an enabling Act to make a declaration.

  1. [56]
    As explained in Randall v Body Corporate for Runaway Cove Bayside CTS 25498:[26]

The tribunal does not have power simply to make a declaration, not ancillary to, or in lieu of, another order which it could make. That is, it does not have a power similar to that of the Supreme Court that is confirmed by s.128 of the Supreme Court Act 1995. In the absence of an express power to entertain a proceeding simply for the purposes of giving a declaration, it does not have the power to grant and make a declaration unless such power is expressly given to it by an enabling act. As I have said, no such power is relied upon here.

33. The fact that the applicant also seeks “interim orders” is irrelevant to this issue. Those orders are of an interlocutory nature. If a properly constituted proceeding were on foot, the tribunal would have power to consider whether or not to make such orders for the purposes of the proceeding. But the fact that the applicant wishes to seek such orders cannot affect the question whether the proceeding is properly constituted having regard to the final relief that the applicant seeks.[27]

  1. [57]
    The parties must be satisfied with the reasons for decision given above.
  2. [58]
    The parties are entitled to file submissions on costs.

Footnotes

[1]  Clause 8.1.

[2]  T1-19, L46 to T1-20, L5. 

[3]  Prior to the relevant date of 6 July 2010 entitled a restricted letting agent’s licence.

[4]  Statement of Claim [12(a)] and [19(a)]; Exhibit 1, page 106.

[5]  Section 14B Acts Interpretation Act 1954 (Qld).

[6]  Explanatory Notes for SL 2008 No. 270.

[7]  Ibid page 5.

[8]  Ms Tang did finally obtain a resident letting agent’s licence on 16 March 2017.

[9]  Exhibit 4 exhibited YB-1, page 1.

[10]  Ibid [6].

[11]  Section 112(2), BCCM Act.

[12]  Exhibit 4 YB-1, page 2.

[13]  [2005] QCA 230.

[14]  Ibid [16].

[15]  [2005] QSC 224.

[16]  Ibid [24].

[17]  [2010] QCA 256 [24].

[18] Pazcuff Pty Ltd v Farmilo & Ors [2009] QSC 230 [19].

[19] MNM Developments Pty Ltd v Gerrard [2005] QCA 230, [16].

[20]  [1982] HCA 24; (1982) 149 CLR 337.

[21]  Ibid [9].

[22] Perri v Coolangatta Investments Pty Ltd [1982] HCA 29 [5] (Gibbs CJ), [10] (Mason J), [23] (Brennan J), [12].

[23]  [2019] QSC 145.

[24]  Ibid [50], Bowskill J citing Telina Developments Pty Ltd v Stay Enterprises Pty Ltd [1984] 2 Qd R 585, 591-592.

[25] Telina Developments Pty Ltd v Stay Enterprises Pty Ltd [1984] 2 Qd R 585, 587.

[26]  [2011] QCATA 10.

[27]  Ibid [32]-[33].

Close

Editorial Notes

  • Published Case Name:

    Tang v Body Corporate for Greenly Gardens CTS 41566

  • Shortened Case Name:

    Tang v Body Corporate for Greenly Gardens CTS 41566

  • MNC:

    [2019] QCAT 207

  • Court:

    QCAT

  • Judge(s):

    Member Howe

  • Date:

    30 Jul 2019

Appeal Status

Please note, appeal data is presently unavailable for this judgment. This judgment may have been the subject of an appeal.
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