Recent victories for managers

17 January 2018

Towards the end of 2017 we secured a number of victories for our clients in various situations and in various forums. We have maintained and will continue to maintain our policy of never acting for a body corporate in a dispute with a resident manager.

The most recent of these victories involved managers in a very large complex who have for some months been embroiled in a termination dispute with their body corporate.

We had previously procured an injunction restraining the body corporate from terminating our clients’ management rights agreements until the QCAT trial, still some 8 months or so away. The body corporate, in adopting what is becoming a common tactic, stopped paying the caretaking remuneration.

Our clients could not afford to pay their employees or their repayments to the bank. The committee knew that without the remuneration our clients’ business would be quickly ruined.

We successfully applied to QCAT for orders requiring the body corporate to pay the overdue remuneration (many tens of thousands of dollars) and to continue to pay the future remuneration without deduction.

This QCAT decision will be of much benefit to the industry as it will discourage other bodies corporate from pursuing a similar tactic of stopping payment of remuneration in the hope of drying up the manager’s source of income.

We have also secured other victories for our clients in QCAT in various circumstances including an attempt by a body corporate to terminate management agreements on the basis that an option was not properly exercised.

There have been multiple disputes in which we have become involved where we and our clients, through careful and considered tactics, have successfully brought about the removal of all of the committee or where appropriate just the hostile and belligerent ones at a requisitioned EGM. In one such case we also succeeded in having the same EGM approve the entry into new 25 year agreements with our clients at a substantially higher (but much fairer) remuneration.

We have also witnessed badly advised managers becoming involved in litigation they had no hope of winning. In one case the manager’s lawyers issued proceedings in the Body Corporate Commissioner’s Office when they should have been issued in QCAT.

Surprisingly the body corporate’s lawyers,a well-known firm who like the manager’s lawyers specialize in body corporate law and management rights, did not pick up on the error. The body corporate and the manager spent tens of thousands of dollars on legal fees before we were approached by the manager to take over the litigation. At which time we advised the proceedings had been wrongly issued in the Commissioner’s Office and of the obvious flaws in the manager’s case which meant that it was doomed to fail (advice subsequently borne out by the decision of the OCBCCM in that matter).

Disputes are best avoided wherever possible. Mahoneys, unlike some of the lawyers we see acting for bodies corporate, will always do what we can to avoid litigation and the uncertainty and expense that comes with that. However if litigation is the only or best way to deal with a dispute then Mahoneys have the most experienced and successful team of lawyers to do so. It is essential in order to achieve a successful outcome that we be consulted as early as possible.