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Breeze Mr Pty Ltd v Body Corporate for Bay Village Community Title Scheme 33127

Unreported Citation:

[2021] QSC 263


In this case, Daubney J considered two points of note. First, whether the matter before the Court was a “dispute” under ss 227 and 229 Body Corporate and Community Management Act 1997 and so fell within QCAT’s exclusive jurisdiction. Secondly, his Honour considered whether a body corporate committee could terminate a body corporate manager without a resolution of a general meeting of lot owners.

Daubney J

14 September 2021 (delivered ex tempore)

The respondent is a body corporate under the Body Corporate and Community Management Act 1997 (BCCMA) and as such is regulated by the Body Corporate and Community Management (Commercial Module) Regulation 2020 (Module). [1]. It entered into a Management Agreement which was ultimately assigned to the applicant, who acted as Manager of the body corporate. [2]. Under cl 6.1(b), the respondent is entitled to terminate the Management Agreement if the Manager “is guilty of gross negligence or gross misconduct in performing the Duties or providing the Letting Service”. [3]. On 8  April 2021, the respondent’s committee purported to resolve to terminate the Management Agreement but without seeking authority of the lot owners at a general meeting. [4]–[6].

The applicant disputed that its termination as Manager was valid and applied to the Court, seeking declarations that the purported termination was a nullity and of no effect. [7]. Against this, the respondent raised a preliminary jurisdictional argument – that, under Ch 6 of the BCCMA, the Queensland Civil and Administrative Tribunal (QCAT) has exclusive jurisdiction. [8]. In a judgment delivered ex tempore, Daubney J dealt with both the jurisdictional argument and the substantive question of whether a declaration should be made.

Under s 229(3) of the BCCMA, if a dispute is not a “complex dispute” – and there was no suggestion that the instant case was a “complex dispute” – then the “only remedy” to dispose of the dispute is resolution through a dispute resolution process set out in Ch 6, or an order from QCAT’s Appeal Tribunal from an adjudicator on a question of law. [10]. Section 227(1)(b) relevantly defines “dispute” as being a dispute between the body corporate and an owner or occupier of a lot. [12]–[13]. The respondent relied on [107] of Henderson v Body Corporate for Merrimac Heights [2011] QSC 336 in support of the proposition that if the parties are, respectively a body corporate and the owner of a lot, then any dispute between them will be caught by s 229. [14].

Daubney J disagreed, considering that on a proper construction of Henderson, the Court “observed that the Court undoubtedly has jurisdiction” in respect of a claim relating to a landscaping agreement. [19]–[20]. Accordingly, [107] of Henderson, which related to a claim in respect of a separate caretaking agreement, was merely meant to exemplify “the prima facie operation of the wording in s 227, and the various categories of dispute described in that section”. [21]. His Honour further distinguished Henderson as the instant dispute had nothing to do with the applicant’s status as a lot owner. [23]–[25].

Daubney J formed the view that the respondent’s position would have undesirable results. [26]. His Honour gave two examples of such results. First, if a lot owner suffered personal injuries in connection with common property controlled by the body corporate, then their only avenue for resolving the dispute would be to go through the dispute resolution processes set out in Ch 6 of the BCCMA. [26]. Secondly, a similar outcome would occur if a body corporate published a pamphlet which defamed a lot owner. [26]. His Honour considered that it would be “absurd” if the correct interpretation of the BCCMA were that in either scenario, the lot owner would have to resort to the dispute resolution processes in Ch 6. [27].

Accordingly, Daubney J concluded that s 227 should be understood as referring to “a dispute between a body corporate and an owner of a lot in their respective capacities in that regard”. [27]. As the instant case did not relate to the applicant in its capacity as a lot owner, this dispute was not caught by s 229, meaning that the Supreme Court retained jurisdiction to hear and determine the application. [27].

In respect of the substance of the application, Daubney J noted that the power under ss 99 and 100 of the Module for a body corporate to terminate a body corporate manager’s engagement was subject to s 100(2), which requires that any termination be “approved by ordinary resolution of the body corporate”. [29]–[30]. Against this, the respondent sought to argue that because s 100(1) of the BCCMA provides that a decision of a body corporate committee is a decision of the body corporate, the decision was deemed to be one of the body corporate. [30]. His Honour rejected this argument on the grounds that under s 100(2) of the BCCMA, s 100(1) does not apply to decisions which, under the Module, are on a “restricted issue” which, under s 17(1)(c) of the Module, includes decisions that may only be made by ordinary resolution of the body corporate. [31]–[32]. Section 100(2) of the Module makes clear that the termination of a body corporate manager is one such decision. [33]–[34]. Accordingly, his Honour found that the termination was of no force and effect. [35].

In the event, Daubney J made the declaration sought by the applicant.

M Paterson

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