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  • Unreported Judgment

Zhou Lim Pty Ltd v Body Corporate for Miami Pacific

 

[2020] QCAT 261

QUEENSLAND CIVIL AND ADMINISTRATIVE TRIBUNAL

CITATION:

Zhou Lim Pty Ltd v Body Corporate for Miami Pacific [2020] QCAT 261

PARTIES:

Zhou Lim PTy LTd ACN 608 027 309 as trustee for the zhou lim family trust

(applicant)

v

body corporate for miami pacific cts 3029

(respondent)

APPLICATION NO/S:

OCL003-17

MATTER TYPE:

Other civil dispute matters

DELIVERED ON:

8 July 2020

HEARING DATEs:

27 March 2019; 28 March 2019; 29 March 2019

HEARD AT:

Southport

DECISION OF:

Member Holzberger

ORDERS:

The application to resolve a complex dispute filed 1 February 2017 is dismissed.

CATCHWORDS:

REAL PROPERTY – STRATA AND RELATED TITLES – MANAGEMENT AND CONTROL – BODY CORPORATE: POWERS, DUTIES AND LIABILITIES – DUTY TO REPAIR AND MAINTAIN COMMON PROPERTY – where applicant accepted an assignment of  existing managers and caretakers agreement and letting agreement – where allegations that the applicant failed to comply with its contractual obligations – where the respondent resolved to issue a Remedial Action Notice (‘RAN’) and terminate the agreement at an extraordinary general meeting – requirement that the respondent act reasonably

Body Corporate and Community Management (Accommodation Module) Regulation 2008 (Qld), s 129(1), s 129(3), s 129(4), sch

Body Corporate and Community Management Act 1997 (Qld), s 108(3)

Johjen Pty Ltd v Body Corporate for Aegean [2013] QCAT 387

TLL Investments Pty Ltd v The Body Corporate for the Grange CTS 30993 [2018] QCAT 318

The Sands Gold Coast Pty Ltd v Body Corporate for the Sands [No 2] 2016 QCAT 365

Websdale v S & JD Investments Pty Ltd (1991) 24 NSWLR 573

APPEARANCES &

REPRESENTATION:

Applicant:

C W Lim, director of Zhou Lim Pty Ltd

Respondent:

M de Waard, instructed by OMB Solicitors

REASONS FOR DECISION

  1. [1]
    The Body Corporate for Miami Pacific CTS 3029 (‘the Body Corporate’) is the Body Corporate of a residential community title scheme known as Miami Pacific.
  2. [2]
    The scheme comprises 24 individual lots and common property contained in a three storey building on 2,174 square metres of land at 3 Rodondo Avenue, Miami in the state of Queensland.
  3. [3]
    Zhou Lim Pty Ltd (‘Zhou Lim’) is the caretaking service contractor and letting agent for the scheme having accepted an assignment of the existing managers and care takers agreement[1] and letting agreement[2] with consent of the Body Corporate by Deed dated 1February 2016. Both agreements expire on 28 January 2020 but contain options exercisable by Zhou Lim for a further 10 years.
  4. [4]
    Hong Zhou and Cheng Wah Lim (‘Cheng’) are the directors of Zhou Lim.
  5. [5]
    On 7October 2016, the committee of the Body Corporate resolved among other things to engage OMB Solicitors to draft and serve a Remedial Action Notice (‘the RAN’) on Zhou Lim for failing to carry out its duties under the managers and caretaking agreement (‘the agreement’) and misconduct by Zhou Lim in carrying out those functions.
  6. [6]
    The notice was served on Zhou Lim on or about 14October 2016 and asserted that Zhou Lim:
    1. (a)
      had engaged in misconduct in carrying out its functions by distributing defamatory material and false correspondence to lot owners regarding the individual committee members;
    2. (b)
      had failed to carry out its duties under the agreement on 41 instances; and
    3. (c)
      requested Zhou Lim to carry out those duties and comply with the RAN within 30 days of receipt of the RAN.
  1. [7]
    On 19 December 2016 the Body Corporate resolved to terminate the agreement at an extraordinary general meeting.
  2. [8]
    Zhou Lim then filed an application to resolve a complex dispute in the tribunal on 1 February 2017 seeking declarations that:
    1. (a)
      The RAN was invalid and of no effect;
    2. (b)
      Alternatively Zhou Lim had complied with the RAN within the period required; and
    3. (c)
      The Body Corporate was not lawfully entitled to terminate the agreement in reliance on the RAN and the Notice to Terminate.
  3. [9]
    By consent, the parties agreed as an interim order that the Body Corporate be restrained from terminating the agreement[3] and directions to that effect were made on 2 February 2017 by the tribunal.
  4. [10]
    Since then, Zhou Lim has continued to provide caretaking and management services although the Body Corporate is dissatisfied with the quality of those services.
  5. [11]
    The matter was heard at Southport over three days commencing on 27March 2019. Cheng represented Zhou Lim at the hearing and the Body Corporate was represented by Mr M de Waard instructed by OMB Solicitors. Zhou Lim originally instructed Mahoneys and it is clear that they drafted the application. It is also apparent that Zhou Lim has had some assistance in drafting written submissions but otherwise Cheng has represented Zhou Lim throughout these proceedings.

The agreement

  1. [12]
    Pursuant to a ‘Deed of Assignment and Consent’ dated 1 February 2016, Zhou Lim with consent of the Body Corporate accepted assignment of the agreement and the letting agreement from Miami Pacific Qld Pty Ltd on and from 2 February 2016.[4]
  2. [13]
    In that Deed, Miami Pacific Qld Pty Ltd purports to assign to Zhou Lim ‘all of its rights and obligations under and interest in the agreements as the caretaker/agent …’[5]
  3. [14]
    I find that this is the effect of the Deed. Neither party asserts otherwise.
  4. [15]
    The agreement relevant to these proceedings is a document entitled ‘Deed of Engagement’ dated 29 January 2010 between the Body Corporate and Merrimac Number Two Pty Ltd[6] which annexes earlier agreements between those parties dated 4 February 2004 (‘the earlier agreement’).[7]
  5. [16]
    The agreement varies the terms of the earlier agreement by:
    1. (a)
      Having the term of appointment commence on 29 January 2010 and expire on 28 January 2020;
    2. (b)
      Adding a further option for 10 years from the expiry of the term;
    3. (c)
      Increasing the remuneration,

but otherwise it adopts the terms of the earlier agreement.

  1. [17]
    The duties of the caretaker are contained in clause 2. That clause provides that the caretaker by ‘its appropriate employees or agents’ perform duties ‘consistent with position of Caretaker to a residential unit building and without limiting the generality of the provision’ and particularises 25 specific duties.[8]
  2. [18]
    Clause 10 of the agreement relevantly provides that the Body Corporate may terminate:

If the caretaker shall fail to carry out his duties pursuant to this agreement and such neglect shall continue for a further period of 14 days after notice in writing shall have been given to the caretaker specifying the duties which the caretaker has neglected to carry out.[9]

  1. [19]
    I do not understand the Body Corporate to assert that the RAN acts in the alternative or otherwise as a notice given pursuant to clause 10 of the agreement.
  2. [20]
    While the Body Corporate contests that the agreement contains an implied term to act reasonably I do not understand it to dispute that the Body Corporate must act reasonably both in relation to the RAN and its resolution to terminate pursuant to the terms of the Body Corporate and Community Management Act 1997 (Qld) (‘BCCMA’).

Accommodation Module

  1. [21]
    Section 129(1) of the Body Corporate and Community Management (Accommodation Module) Regulation 2008 (Qld) (‘Accommodation Module’) relevantly permits a Body Corporate to terminate a person’s engagement as service contractor if the person:
  1. engages in misconduct, or is grossly negligent, in carrying out functions required under the engagement; or
  2. fails to carry out duties under the engagement; or
  3. contravenes –

 

  1. … the code of conduct for … caretaking service contractors …
  1. [22]
    The RAN specifies all three of those points.
  2. [23]
    Section 129(3) of the Accommodation Module provides that the Body Corporate may act under section 129(1) only if:
    1. (a)
      The body corporate issues a RAN;
    2. (b)
      The person fails to comply within the stated time;
    3. (c)
      The termination is approved by ordinary resolution of the body corporate; and
    4. (d)
      The motion to approve the termination is by secret ballot.
  3. [24]
    It is the evidence of Kaylene Kramer, secretary of the Body Corporate that the termination was approved by ordinary resolution at the extraordinary general meeting on 19 December 2016,[10] and was decided by way of secret ballot.[11] In his evidence Cheng conceded this to be the case in cross-examination and I make a finding to that effect accordingly.
  4. [25]
    Section 129(4) provides that the RAN must state each of the following:
    1. (a)
      That the body corporate believes the service contractor has acted in a way specified in section 129(1);
    2. (b)
      Details of the actions sufficient to identify:
      1. The misconduct or gross negligence;
      2. The duties not carried out; or
      3. The provision of the code of conduct contravened;
    3. (c)
      That the service contractor has the period stated in the notice, being not less than 14 days, to:
      1. remedy the misconduct or gross negligence;
      2. carry out the duties; or
      3. remedy the contravention;
    4. (d)
      That if the service contractor does not comply within the stated period the body corporate may terminate the engagement.
  5. [26]
    As I understand, while the Body Corporate is not resile from allegations of misconduct and contravention of the code, the case presented at the hearing related almost exclusively to the Body Corporate’s neglect to carry out its duties.

Zhou Lim’s case

  1. [27]
    Zhou Lim argues:
    1. (a)
      That the Body Corporate has failed to act reasonably in breach of the BCCMA and the implied terms of the agreement;
    2. (b)
      That the RAN is defective and therefore invalid pursuant to the Accommodation Module; and
    3. (c)
      That the duties set out in the RAN have been remedied.
  2. [28]
    I agree with Mr de Waard’s submissions[12] that Zhou Lim’s application asserts that it is the issuing of the RAN that is unreasonable rather than the decision to terminate. In submissions filed on Zhou Lim’s behalf, it is submitted ‘that the process of terminating the agreement was a targeted and deliberate act to financially disable the applicant’[13] and to a degree that is raised in his witness statement.[14]
  3. [29]
    In those circumstances I will address the reasonableness of the committee’s conduct in issuing the RAN and the Body Corporate’s decision to terminate the agreement.

Irregularities in corporate procedure

  1. [30]
    Zhou Lim’s attack on the RAN both in his witness statement and in his cross-examination of Body Corporate’s witnesses seems directed primarily to procedural issues throughout the process leading to the resolution to terminate.
  2. [31]
    Firstly, he disputes that the resolution to terminate was in fact passed by a majority at the extraordinary general meeting.
  3. [32]
    Initially, in his statement of evidence he asserted that the motion should have been determined by special resolution but in cross-examination he conceded that the ordinary resolution was appropriate.[15]
  4. [33]
    The procedures followed by the committee are detailed in Ms Kramer’s affidavit filed on 13 September 2018.[16] There do not appear to be, nor does Zhou Lim allege any defects in that procedure.
  5. [34]
    Ms Kramer’s evidence is (number omitted):

At the EGM:

  1. (a)
    6 lot owners attended in person;
  2. (b)
    10 lot owners returned voting papers by way of proxy.

Relevant to these proceedings, motion 13 [the termination motion] was passed eight votes to six … [17]

  1. [35]
    The count itself is not disputed by Cheng in his evidence although he said (in support of his special resolution argument) that the motion was carried by two votes with one abstention and three invalid votes.
  2. [36]
    Section 108(3) of the BCCMA provides:

The motion is passed by ordinary resolution only if the votes counted for the motion are more than the votes counted against the motion.

  1. [37]
    I am satisfied that the motion has been passed by ordinary resolution.
  2. [38]
    Secondly, Cheng asserts:

The respondent violated all the rules and regulations by continues [sic] engaging the services of OMB.[18]

  1. [39]
    Attached to his statement of evidence and marked Exhibit “H” and Exhibit “I”, respectively, are copies of OMB Solicitors’ invoices to the Body Corporate for the period 22 November 2016 to 23 December 2016,[19] and for the period 19 January 2017 to 6 April 2017.[20]
  2. [40]
    The second of these invoices arises wholly after the issue of the RAN and the termination of the agreement and it cannot be relevant to the validity of the RAN or the termination of the agreement.
  3. [41]
    The complaint as I understand it, in respect of the first invoice, is that it exceeds the limit for committee spending. I am unable to see, if that was true that it would invalidate the RAN but in any event I am satisfied that the committee acted within the BCCMA and did not exceed the limit for committee spending.
  4. [42]
    That limit is determined by Schedule of the Accommodation Module. The ‘relevant limit for committee spending’ is calculated, if no other amount has been previously been determined by Body Corporate, by multiplying $200 by the number of units in the scheme (24).
  5. [43]
    OMB Solicitors’ fees leading up to the RAN and the termination are within the limit of committee spending.

Onus of proof

  1. [44]
    Mr de Waard submits that Zhou Lim is the applicant and accordingly it bears the onus of proof. I disagree, it is the Body Corporate that issued the RAN and terminated the agreement and the onus falls on it to justify the issue of the RAN and the failure of Zhou Lim to comply with it.[21]
  2. [45]
    The Body Corporate’s task in that regard is not an easy one given the terms of the agreement provide that the caretaker:[22]

by its appointee, appropriate employees or agents performs or procures the performance of the tasks and duties consistent with the position of caretaker to a residential unit building without limiting the generality of the provision the caretaker indicates that the following particular duties will be performed …

  1. [46]
    What follows is a list of 25 specific duties. While some of these specify a standard for carrying out that specific duty (for example clause 2(d) requires common areas to be maintained in a ‘clean and tidy condition’ and clause 2(g) requires equipment to be maintained in ‘good and useable condition’), the required standard generally is performance consistent with the position of a caretaker to a residential unit building.
  2. [47]
    Given that residential unit buildings range broadly in terms of age, size, location and use (for example residential versus holiday letting) I believe it reasonable to imply that the standard is performance consistent with the position of a caretaker of a residential unit building of a similar size, age, location and use as the building in question.
  3. [48]
    The specific standards specified in the particularised duties require an objective assessment.
  4. [49]
    An exception to this is clause 2(h) which requires rubbish and waste to be removed from the common areas daily. Otherwise the agreement does not provide any schedule or timetable or frequency for the performance of the particularised or general duties.
  5. [50]
    The evidence relied on by the Body Corporate to establish the validity of the RAN and Zhou Lim’s failure to comply with it was provided by Tyrin Batty of Seymour Consultants, Body Corporate specialists[23] and to a lesser extent by the evidence of Ms Kramer.[24]
  6. [51]
    I note at this point that Cheng’s statement of evidence did not address the validity of the RAN assessments (other than on the procedural basis addressed earlier in these reasons) nor did he lead evidence except in the most general sense to particularise the steps he had taken to remedy all or any of them. His cross-examination of Mr Batty and Ms Kramer also concentrated on deficiencies in the presentation of the reports in the former case and the legality and reasonableness of the Body Corporate and the Committee’s actions rather than the alleged breaches or his compliance or otherwise with them.
  7. [52]
    During the cross-examination of Ms Kramer I adjourned the proceedings to permit him to familiarise himself with those aspects of Ms Kramer’s testimony and formulate questions for his cross-examination of her but he did not avail himself of that opportunity. While his application and submissions attack the RAN assessments, Cheng’s evidence in cross-examination did not support that to any significant extent.

The evidence of Mr Batty

  1. [53]
    Mr Batty provided three reports to the Body Corporate dated 12 September 2016 (‘the September report’),[25] 4 October 2016 (‘the October report’)[26] and 18 November 2016 (‘the November report’).[27] The October report is identical to the September report save for the amendment of errors in the September report corrected by the October report, in particular the date of the report and the inspection from 12 September 2016 to 13 September 2016 and the address of the property which Mr Batty explained was the result of failing to alter a template he had used in the preparation of the September report.
  2. [54]
    The November report relates to his re-inspection of the property after the date for expiry for compliance with the RAN.
  3. [55]
    Cheng’s statement of evidence raises the following objections to the September and by implication October reports:
    1. (a)
      The inspections were conducted early Monday morning when he had no reasonable opportunity to carry out his duties after the weekend;
    2. (b)
      They were conducted with Committee members being present without his attendance and thus were not independent; and
    3. (c)
      They were not properly dated and accordingly were not admissible.
  4. [56]
    In his cross-examination he took issue with the nature of photographs which had been included in each report and specifically the lack of particularity and comparability.
  5. [57]
    His submissions raised the following:
    1. (a)
      No letter of instruction was disclosed and so the basis or purpose of the engagement cannot be ascertained;
    2. (b)
      Mr Batty’s qualifications do not qualify him as an expert;
    3. (c)
      Mr Batty despite his recommendation that inspections be carried out every two months did not re-inspect after November 2016 even though some improvements was noted;
    4. (d)
      The reports were not completed for the purpose of issuing the RAN; and
    5. (e)
      The objectivity of the reports is questionable where Cheng was not present at the time of the inspections but members of the Committee were.[28]
  6. [58]
    It was submitted that the facts of this case were analogous to those in TLL Investments Pty Ltd v The Body Corporate for the Grange CTS 30993 (‘TLL’)[29] in that:
    1. (a)
      The consultant’s report contained a list of items which the consultant believed required the caretaker’s attention rather that a list of breaches of the caretaking agreement and did not identify which of the matters were breaches and which were not; and
    2. (b)
      The location of the defects was not sufficiently particularised by the photographs contained therein.
  7. [59]
    It was conceded by Mr Batty that his original report dated 12 September 2016 contained typographical errors including the address of the property and the date of the inspection. These were corrected in the second report dated 4 October 2016.
  8. [60]
    While those errors may reflect on his attention to detail in preparing the report they do not invalidate it nor do they substantially disadvantage Cheng in his preparation of witness statements which were prepared and lodged much later in the proceedings well after the identification of the errors.[30]
  9. [61]
    I accept Mr Batty’s evidence that the inspection for the report took place on Tuesday 13 September 2016 between 2:55pm and 4:00pm rather than on early Monday morning on 12 September 2016 as Cheng asserts.
  10. [62]
    Even if I accept (and I do not) that the Body Corporate members influenced the contents of the report by being present for Mr Batty’s inspection and deliberately contributed to the assessments raised by Mr Batty specifically by leaving the barbeque dirty, that does not in my view disadvantage Zhou Lim given that it has had adequate opportunity to either object to the inclusion of any assessment in the RAN or the remedy of it or assert that the rectification was unreasonable. Mr Batty’s report was relied on to prepare the RAN but is not in any event the RAN itself.
  11. [63]
    It is debatable whether Mr Batty’s evidence or indeed evidence of the nature of Mr Batty’s can be considered expert evidence in that the technical expertise and qualifications are significantly less than in say building or professional misconduct cases. It is difficult to identify a qualification which qualifies anybody to comment on the cleanliness of a barbeque or the adequacy of measures taken to maintain lawns and gardens. The tribunal does not need to identify any appropriate qualification to determine whether evidence is expert evidence as it is entitled to rely on practical experience of the person giving that evidence.
  12. [64]
    Mr Batty has been employed by Seymour Consultants since October 2012 and his duties during that time included preparation of schedules for caretaking agreements and preparation of condition and defect reports. Prior to that he has had experience in asset management and development consulting.
  13. [65]
    The Practice Direction for expert evidence[31] has at best been complied with selectively in this case. The instructions given to Mr Batty by the Committee and indeed the object of Mr Batty’s reports are not completely clear.
  14. [66]
    While he has not attempted to identify breaches of the agreement he was provided with a copy of the agreement prior to his inspection and various documents relating to it. His conclusion that the property has not been kept ‘in a first class order/repair’[32] is different from the requirement of the agreement that it be maintained ‘consistent with the position of caretaker’.
  15. [67]
    I am satisfied that Mr Batty’s experience qualifies him to identify areas of concern and comment on them objectively to the Body Corporate and in my view that is what his report is purported to do.
  16. [68]
    It is not so much Mr Batty’s reports that cause the concerns but rather the use that the Body Corporate has made of them. Each and every one of Mr Batty’s 41 assessments has been identified in the RAN as requiring remedial action. In my view about half of them should not have been for the reasons set out below.
  17. [69]
    While unfortunate, the inclusion of the matters which were not in fact breaches or at least matters where the Body Corporate did not discharge its onus to establish the breach, does not invalidate the RAN if other defaults are properly identified.[33]
  18. [70]
    In TLL the Body Corporate not only attached a copy of the relevant expert report but relied on it entirely to identify the breaches and to particularise the remedial action required. The tribunal found that the report did not sufficiently identify the location of the alleged breaches nor identify which items were in fact breaches and which were matters which simply required attention without being breaches.
  19. [71]
    TLL involved two separate schemes (which was not identified in the report in that case) for a residential development consisting of 302 town houses spread over approximately 29 acres. The common property included four swimming pools, two tennis courts, 178 car parks, an internal road and a pathway system.
  20. [72]
    In this case there are 24 lots and common property contained in 2,174 square metres. Zhou Lim has not convinced me that the report does not sufficiently identify the location of each problem nor in my view general descriptions such as ‘remove palm fronds and weeds from lawns and gardens’ could reasonably create confusion.
  21. [73]
    The RAN in this case clearly identifies (albeit wrongly in many instances) that each of the 41 matters breaches the agreement. While it attaches a copy of the September report the body of the RAN in a section headed ‘Details of the duties the Body Corporate believes that the caretaker has not carried out’ specifies the assessment number contained in the reports and the particular duty in the agreement which it alleges has been breached.[34]
  22. [74]
    In a separate section of the RAN headed ‘Details of the Remedial Action to be taken by the Caretaker’[35] it sets out what must be done, in its view, to remedy each of the alleged breaches.
  23. [75]
    I find that the flaws that infected the RAN in TLL are not present here.

Evidence of the condition of the property – Kaylene Kramer

  1. [76]
    Ms Kramer swore two affidavits in these proceedings. In the first of these filed on 13 September 2018 it is clear that the Committee accepted and adopted the assessments of Mr Batty’s report and particularised the Committee’s concern in relation to them[36] and identified ‘many’ of these as issues previously raised with Zhou Lim. She also gave evidence as to her observations of the state of the common areas at the time of swearing the affidavit saying ‘no particular maintenance, work or upkeep [was] being performed’.[37]
  2. [77]
    In a second affidavit filed on 11 March 2019 she again assessed the condition of the common property as still ‘poor’ and particularised her observations which lead to that assessment.[38]
  3. [78]
    The difficulty with this is that neither assessment relates specifically to the date specified in the RAN for the remedial action to be carried out. It is at best circumstantial evidence which of itself is insufficient to establish a breach. That is not however to say that it is irrelevant. In a general sense it corroborates Mr Batty’s findings in his second report.

The validity of the RAN Assessments

  1. [79]
    Assessments 1, 2 and 3 allege the presence of extensive weeds in lawns, gardens, pathways and curbing. The RAN requires the removal of the weeds and consultation with a horticulturalist. The November report says that there has been no improvement. The weeds continued to infest the gardens and lawns. Cheng gave no evidence of any steps taken by him to attempt to eradicate the weeds. I find that assessments 1, 2 and 3 are valid remedial action notices.
  2. [80]
    Assessment 4 relates to the mowing and edging of lawns. Mr Batty’s November report notes ‘minor improvement’ but says that the edging had not been undertaken to a sufficiently high standard. Ms Kramer gives evidence that the lawns generally throughout the period were in poor condition. Cheng gave no evidence as to when the lawns were mowed or the pattern adopted by him in mowing them however I am not satisfied in the circumstances that the Body Corporate has discharged its onus of establishing that the condition of the lawns constitutes a breach of the agreement.
  3. [81]
    Assessments 5 and 6 relate to overgrown plants in gardens and the removal and replacement of dead plants. In his September report Mr Batty notes that the gardens ‘had been neglected for a period of time’. In his November report he notes very little improvement. Ms Kramer’s evidence is that the gardens are untidy and unkempt. Cheng did not lead any evidence as to the steps taken by him to tend the gardens. I find that assessments 5 and 6 are valid remedial action notices.
  4. [82]
    Assessments 7 and 8 relate to the removal of trees and stumps identified by the Body Corporate. Mr Batty’s evidence in his November report is that the trees and stumps had not been removed. Cheng said in evidence that it was ‘not his job’ but gave no evidence of any steps taken by him to arrange for appropriately qualified people to attend to it. I am satisfied in those circumstances that assessments 7 and 8 are valid remedial action notices.
  5. [83]
    Assessment 9 relates to the removal of dead palm fronds and fruit from the common property. Mr Batty’s evidence is that the dead fronds and fruit had ‘accumulated’. Cheng’s evidence is that removal of these is not his job although he subsequently conceded that it was. There is no evidence that he did anything at all to remove the palm fronds or that the fronds and fruit had simply not accumulated over a period of time. In those circumstances I find that assessment 9 is a valid remedial action notice.
  6. [84]
    Assessment 10 requires the caretaker to replant ‘bare areas’ of gardens and restore them generally to good condition. It notes a general lack of care. This appears to embody the complaints about neglect of garden areas in earlier assessments. In any event it is not referred to in the November report. I find that the Body Corporate has failed to discharge its onus to establish this as a valid remedial action notice.
  7. [85]
    Assessment 11 relates to an accumulation of leaves which need to be removed. There is no evidence that Zhou Lim has failed to comply with this as the November report does not deal with it. In those circumstances the Body Corporate has not discharged its onus.
  8. [86]
    Assessment 12 requires the removal of plants blocking a storm water drain. Mr Batty’s November report provides that this has been done but others needed attention. While a valid RAN, the evidence is that Zhou Lim has complied with it. Assessments 13, 14 and 15 relate to oil stains in parking bays, carports not being properly swept and a build-up of leaves in the carport roofs and shed. Mr Batty’s November report notes no improvement. In evidence Cheng said that this was not his job and that a contractor would need to do it but provided no evidence that he had attempted to arrange for that to be undertaken. The carports and parking areas are clearly part of the common property and a failure to clean and maintain them is a breach of the caretaker’s obligations. I am satisfied that assessments 13, 14 and 15 are valid remedial action notices.
  9. [87]
    Assessment 16 relates to the care of the barbeque facilities and refers to a thick layer of grease on the barbeque plate and stains on the side and floor. Regardless of whether members of the Body Corporate committee had failed to clean the barbeque on Sunday evening, it is still the obligation of the caretaker to clean the barbeque, and while the November report notes some slight improvement the facilities are still unsatisfactory. No evidence is given on the part of Zhou Lim as to the frequency with which the barbeque was cleaned nor the steps it had taken to otherwise clean the area.  I am satisfied that this is a valid remedial action notice and Zhou Lim has not complied with it.
  10. [88]
    Assessment 17 relates to the removal of cigarette butts from the barbeque area. I am not satisfied on the evidence that the Body Corporate has shown this to be an unreasonable accumulation of cigarette butts rather than the result of an isolated event.
  11. [89]
    Assessment 18 relates to chairs being placed near the pool fence. It is not clear on the evidence the length of time the chairs had remained there or who had placed them there. In any event it is obvious that this was complied with at the time of the second inspection by Mr Batty. This is not a valid remedial action notice or alternatively has been complied with.
  12. [90]
    Assessments 19 and 20 relate to the cleaning of the pool surface and skimmer box.  The agreement does not require that this be undertaken daily. There is no evidence of whether the leaves in either the skimmer box or the pool surface are an unreasonable accumulation. The Body Corporate has not satisfied its onus to establish this as a valid remedial action notice.
  13. [91]
    Assessment 21 relates to the storage of pool chemicals on the ground. This has been complied with, if indeed it can be said to be a breach of the agreement.
  14. [92]
    Assessment 22 relates to the maintenance of water in the swimming pool. Mr Batty had the water tested by a private swimming pool supply shop and found the water to be outside ‘certain parameters’ specified by them. I am simply not satisfied that the evidence establishes a breach of the caretaker’s obligation to care for the swimming pool. In my assessment this is not a valid remedial action notice on the basis of the evidence which supports it.
  15. [93]
    Similarly, the requirement of assessment 23 that records be maintained daily rather than weekly is hardly a breach of the agreement where the agreement does not specify the frequency or any procedure for so doing.
  16. [94]
    Assessment 24 relates to the levelling of pavers. Mr Batty’s November report records very little improvement. Cheng gave evidence that he had attended to part of this himself but that generally it was beyond his competence and would require qualified assistance. He did not give any evidence that he in fact had taken any steps to organise the repair. I accept that the pavers have not been remedied on the evidence of Mr Batty and find this to be a valid remedial action notice.
  17. [95]
    Assessments 25, 26 and 27 relate to the care of external surfaces, pipework and so on.  The notice purports to require Zhou Lim to clean and where appropriate repaint certain areas of those surfaces. Zhou Lim does not appear in its evidence to dispute these particular remedial action notices nor does it give any evidence of attempts on its part to comply. I find that this is a valid remedial action notice and has not been remedied.
  18. [96]
    Assessment 28 requires balustrades and handrails to be wiped down. This has been attended to and accordingly the RAN, so far as it relates to this item, has been complied with.
  19. [97]
    Assessment 29 relates to cobwebs on ceilings and in corners. It is not clear from Mr Batty’s reports whether the build-up is a result of long term neglect or unsatisfactory performance and I am not satisfied on the balance that the remedial action notice is valid.
  20. [98]
    Assessment 30 requires windows and external surfaces to be cleaned. It is clear from the second report that this has not been done. Cheng said in evidence that this was not a one day job and it had not been done but could not give evidence of the steps he had taken to remedy it. I am satisfied that this is a valid remedial action notice and has not been remedied.
  21. [99]
    Assessment 31 relates to an accumulation of dead insects and cobwebs in light fittings. Cheng gave no evidence as to what steps he had taken to remedy this assessment. There is no reference to this assessment in Mr Batty’s November report. I am also not satisfied how the accumulation could be said to be an unreasonable accumulation.
  22. [100]
    Assessment 32 relates to the cleanliness and condition of stairwells. Cheng did not give evidence that he had attended to this. Mr Batty’s November report, while incorrectly referring to this as assessment 33 notes no improvement. I am satisfied that this is a valid remedial action notice which has not been complied with.
  23. [101]
    Assessment 33 relates to the condition of and cleanliness of the laundry. Cheng says that laundry is not his responsibility because of the Body Corporate’s arrangement for hire of equipment from another party. This is denied by the Body Corporate. In the absence of any evidence of that arrangement I am satisfied that the cleanliness and condition of the laundry is the responsibility of the caretaker. Cheng gave no evidence of having cleaned the laundry. Mr Batty’s November report notes no improvement. I am satisfied that this is a valid remedial action notice which has not been complied with.
  24. [102]
    Assessments 34 and 35 relate to bird droppings in common areas. I am not satisfied that this is an unreasonable accumulation and accordingly this is a valid remedial action notice.
  25. [103]
    Assessments 36 and 37 relate to stored items in carports, stairwells and corridors and required their removal. Mr Batty’s November report says that there was very little improvement in this regard. No evidence was given of the steps taken by Zhou Lim to remedy the problem. I am satisfied that this is a valid remedial action notice which has not been complied with.
  26. [104]
    It appears that assessments 38, 40 and 41 have been complied with. Assessment 39 relates to a rusted out electrical box. Mr Batty’s evidence is that this has not been done. This does not appear to be contested by Zhou Lim nor does it lead any evidence of the steps it has taken to remedy. I am satisfied that this is a valid remedial action notice and has not been remedied.
  27. [105]
    In summary, I find that assessments 1, 2, 3, 5, 6, 7, 8, 9, 13, 14, 15, 16, 24, 25, 26, 27, 30, 32, 33 and 39 are valid remedial action notices which have not been remedied by Zhou Lim. The Body Corporate has not satisfied its onus to establish that assessments 4, 10, 11, 17, 18, 19, 20, 21, 22, 23, 29, 31, 34, 35, 36 and 37 are valid remedial action notices. I am satisfied that regardless of whether they are valid remedial action notices, assessments 12, 28, 38, 40 and 41 have been complied with.

Time to remedy

  1. [106]
    In Johjen Pty Ltd v Body Corporate for Aegean,[39] the tribunal held that a notice which did not give a reasonable time to remedy was invalid.
  2. [107]
    If a breach could not reasonably be remedied within the specified time it would be unreasonable to require it (or at the very least to terminate).
  3. [108]
    Carrying out the remedial work is within the control of Zhou Lim and the onus to establish that no reasonable time has been given is on Zhou Lim. It made no submissions directly related to the adequacy or otherwise of the 30 day period for remedy at the hearing save in the most general sense.
  4. [109]
    Zhou Lim asserts that reasonable time was not given, although it does not specify which of the assessments individually or collectively could not be remedied, the reason for that or the attempts that it had made to remedy which lead it to that conclusion.
  5. [110]
    Cheng asserted in oral evidence that the levelling of the pavers (assessment 24) was beyond his capabilities even though he had partially remedied the problem himself.  If despite his reasonable attempts he was unable to arrange that in what was a notoriously busy time in the building industry, the Body Corporate could not, in my view, terminate for failure to comply with that assessment of the RAN because it would be unreasonable to do so. Cheng did not however give any evidence of his attempts to remedy the RAN or request any extension of time from the Body Corporate.

Cheng’s Evidence

  1. [111]
    Zhou Lim’s response to service of the RAN is bluntly bewildering. Cheng’s evidence does not attack except in the most general sense the individual assessments contained in the RAN or any attempts on his part to remedy assessments which were valid.
  2. [112]
    Apart from the procedural matters dealt with earlier in these reasons, he relies on various documents attached to his statement of evidence and in particular a condition report prepared by two owners, Jacqui Prince and Susanne Temperley,[40] a witness statement by Wendy Proctor,[41] a survey dated October 2016,[42] a witness statement by Kerrie Lush[43] and a witness statement by Sidney Garcia.[44]
  3. [113]
    Ms Lush was the only witness made available for cross-examination. She is a real estate agent charged by Zhou Lim with the sale of its unit and caretaking and letting rights. Her evidence in chief was that Ms Kramer in a telephone conversation on or about 1 November 2017 offered to purchase the caretaking business (exclusive of Zhou Lim’s unit) for $400,000.[45]
  4. [114]
    Ms Kramer’s evidence in response is that she merely enquired as to the worth of the caretaking business and was advised by Ms Lush that it may be worth $400,000. She denies making any offer.
  5. [115]
    The purpose of this evidence I gather is to establish ‘bad blood’ on the part of Ms Kramer. Even if I accept that, it does not establish a lack of reasonableness on the part of the committee or the Body Corporate.
  6. [116]
    The survey carries no weight. The question the survey poses is ‘are you satisfy [sic] with Cheng as the caretaker of the building, pool and garden’ which is a different enquiry altogether from whether the RAN has been remedied. It was conceded in cross-examination that only three of the 24 respondents were owners. None of the respondents were made available for cross-examination.
  7. [117]
    Mr Garcia does not address the issue of whether or not the RAN was remedied. He was not available for cross-examination.
  8. [118]
    Ms Proctor’s evidence relates to committee members’ use of the barbeque. It did not address whether the RAN was remedied. Annexed to Ms Kramer’s second affidavit is a further statement from Ms Proctor dated 31 January 2019 retracting her earlier statement saying that the earlier statement was made as a result of harassment by Cheng.[46] She was not available for cross-examination.
  9. [119]
    The report prepared by Ms Prince and Ms Temperley attracts little weight. It indirectly addresses the issue of whether the RAN has been remedied but does not deal with all of the assessments and provides in most cases that the assessment has been remedied. Neither of the authors was made available for cross-examination despite Cheng being advised at the hearing that they were required for that purpose and would be interposed at their convenience.
  10. [120]
    The evidence of Mr Batty in relation to his second inspection shortly after the expiry date specified in the RAN is unchallenged by the evidence presented by Zhou Lim. It is supported to an extent by the evidence of Ms Kramer of long term neglect by Zhou Lim of its basic maintenance duties. I find in those circumstances that Zhou Lim has failed to comply to remedy the various assessments specified in the RAN and in particular those assessments specified in paragraph 105 of these reasons.[47] I find that the Body Corporate has validly terminated the agreement.
  11. [121]
    I order that the application be dismissed.

Footnotes

[1] Managers and Caretakers Agreement dated 4 February 2004.

[2] Letting Agreement dated 4 February 2004.

[3] Application for decision/order by consent filed 2 February 2017.

[4] Affidavit of Kaylene Kramer filed 13 September 2018, Exhibit “KK – 8” – Deed of Assignment and Consent dated 1 February 2016, 77 – 78.

[5] Ibid 80, cl 2.1.

[6] Affidavit of Kaylene Kramer filed 13 September 2018, Exhibit “KK – 5” - Deed of Engagement dated 29 January 2010, 41 – 57.

[7] Ibid Annexure “A” – Mangers and Caretakers Agreement dated 4 February 2004, 48-57.

[8] Affidavit of Kaylene Kramer filed 13 September 2018, Exhibit “KK – 5”, Annexure “A” – Managers and Caretakers Agreement dated 4 February 2004 cl 2, 49 – 51.

[9] Ibid cl 10, 54.

[10] Affidavit of Kaylene Kramer filed 13 September 2018 [152]–[153].

[11] Ibid [156].

[12] Respondent’s submissions [10].

[13] Applicant’s submissions filed 12 April 2019 [38].

[14] Statement of evidence filed 22 January 2019 [7.2.2] –[7.2.4].

[15] Ibid [7.2.1].

[16] Affidavit of Kaylene Kramer filed 13 September 2018 [146]–[156].

[17] Ibid [153]-[154].

[18] Statement of evidence filed 22 January 2019 [8.1].

[19] Statement of evidence filed 22 January 2019, Exhibit “H” - Tax Invoice dated 23 January 2017.

[20] Ibid Exhibit “I” – Tax Invoice dated 13 April 2017.

[21] The Sands Gold Coast Pty Ltd v Body Corporate for the Sands [No 2] 2016 QCAT 365 (‘The Sands’) [154]-[155]. While this decision was ultimately set aside the issue of onus of proof was not a ground for appeal.

[22] Affidavit of Kaylene Kramer filed 13 September 2018, Exhibit “KK – 5”, Annexure “A” – Managers and Caretakers Agreement dated 4 February 2004 cl 2, 49-51.

[23] Affidavit of Tyrin Batty filed 14 September 2018.

[24] Affidavit of Kaylene Kramer filed 13 September 2018; Affidavit of Kaylene Kramer filed 11 March 2019.

[25] Affidavit of Tyrin Batty filed 14 September 2018 [9], Exhibit “TMB – 6” – Common Property and Condition Report dated 12 September 2016.

[26] Ibid [10], Exhibit “TMB – 7” – Common Property and Condition Report dated 4 October 2016.

[27] Ibid [15], Exhibit “TMB – 8” – Common Property and Condition Report dated 18 November 2016.

[28] Applicant’s submissions filed 12 April 2019 [28]-[34] and particularly [32].

[29] [2018] QCAT 318.

[30] Statement of evidence filed 22 January 2019.

[31] QCAT Practice Direction No 4 of 2009Expert Evidence, 11 November 2019.

[32] Affidavit of Tyrin Batty filed 14 September 2018, Exhibit “TMB – 6” - Common Property and Condition Report dated 12 September 2016 64, [11].

[33] The Sands [102]. This decision referred to a Court of Appeal decision in Websdale v S & JD Investments Pty Ltd (1991) 24 NSWLR 573, 597C.

[34] Affidavit of Kaylene Kramer filed 13 September 2018, Exhibit “KK – 28” – Remedial Action Notice dated 14 October 2016, 229-239.

[35] Ibid 241-243, [18]-[20].

[36] Affidavit of Kaylene Kramer filed 13 September 2018 [121]-[124].

[37] Ibid [167]-[169].

[38] Affidavit of Kaylene Kramer filed 11 March 2019, 6-7.

[39] [2013] QCAT 387 [9]-[10].

[40] Statement of evidence filed 22 January 2019, Exhibit “F” – Owners Report dated 2 December 2016.

[41] Ibid Exhibit “B” – Witness Statement of Wendy Proctor dated 15 January 2019.

[42] Ibid Exhibit “C” – Miami Pacific Apartments – survey dated October 2016.

[43] Ibid Exhibit “K” – Witness Statement of Kerrie Lush dated 15 January 2019.

[44] Ibid Exhibit “N” – Witness Statement of Sidney Garcia dated 15 January 2019.

[45] Statement of evidence filed 22 January 2019, Exhibit “K” – Witness Statement of Kerrie Lush dated 15 January 2019.

[46] Affidavit of Kaylene Kramer filed 11 March 2019, Exhibit “KK – 1” – Letter from Wendy Proctor dated 31 January 2019.

[47] Affidavit of Kaylene Kramer filed 13 September 2018, Exhibit “KK – 28” – Remedial Action Notice dated 14 October 2016, [105].

Close

Editorial Notes

  • Published Case Name:

    Zhou Lim Pty Ltd v Body Corporate for Miami Pacific

  • Shortened Case Name:

    Zhou Lim Pty Ltd v Body Corporate for Miami Pacific

  • MNC:

    [2020] QCAT 261

  • Court:

    QCAT

  • Judge(s):

    Member Holzberger

  • Date:

    08 Jul 2020

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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