Mahoneys has successfully acted for the manager of the Sands Holiday Apartments (Gold Coast) over the wrongful termination of the grounds maintenance contract – with the Body Corporate ordered to pay our client approximately $220,000 in compensation with our client’s claim for legal costs yet to be determined.
This was a complex dispute, taking 6 years and substantial legal fees to resolve. In the end, the Queensland Civil and Administrative Tribunal (QCAT) found that:
- despite some concerns with the quality of our client’s work, there were insufficient grounds to terminate the contract; and
- in those circumstances, and where the body corporate terminated the contract (prior to the appeal being determined), the body corporate’s actions amounted to the wrongful termination of the contract.
QCAT also concluded that it did not agree that our client was unable to perform the obligations under the contract. Despite the actions of the body corporate, QCAT found there would have been little support from the apartment owners to terminate the contract had it remained on foot.
The decision serves as a timely reminder to bodies corporate that there can be significant cost consequences for wrongly terminating a management rights contract.
The outcome reinforces Mahoneys’ position as the leading law firm for management rights in Australia.