War, what is it good for?

2 November 2018

With so much at stake, Mahoneys recommends community title scheme managers work towards an amicable solution before pursuing litigation.

In Mahoneys’ recent victory in TLL Investment Pty Ltd v The Body Corporate for the Grange CTS 30993, the member’s judgment opened with a quote from former US president Abraham Lincoln:

Discourage litigation. Persuade your neighbours to compromise whenever you can. Point out to them how the nominal winner is often a loser – in fees, expenses and a waste of time”.

This quote epitomised the proceedings brought before the tribunal: a 10-day hearing, truckloads of evidence and hundreds of thousands of dollars in legal fees. After all was said and done, everyone ended up in the exact same contractual position as they were in the first place.

We have observed a rise in the number of manager clients involved in disputes. Whether the issue is with the body corporate committee, a disgruntled owner or the strata manager, managers will inevitably face conflict at some point during their tenure.

What aggravates the situation is when the manager continues to respond defensively or aggressively to a confrontation without addressing the problem at hand. It’s important to remember that Management Rights is an industry where positive communication and relationship-building are core values.

If you are a manager and find yourself at the centre of a controversy, you should first consider how the problem can be resolved amicably. Perhaps you need to meet with the owner or the body corporate committee in person to discuss what seems to be the problem. We strongly suggest you take this opportunity if the owner or committee is open to it.

What not to do

Sending inflammatory emails back and forth is a futile exercise where no one gets a chance to voice their concerns in detail or look at potential solutions. Be open to a compromise where possible. At the heart of any dispute is an unwavering difference in opinion. Those involved should always look for ways to constructively resolve the dispute in a way that saves time, money and minimises damage to relationships. Long, drawn-out battles at great expense occur when the parties involved are unwilling to make concessions.

In cases where your situation is too difficult to navigate alone, help is available. If you are an ARAMA member, one of the many benefits is having access to a support network with whom you can discuss issues.

Alternatively, there are many specialist Management Rights consultants who can assist and intervene in the event of a dispute. Legal or contractual disputes will often benefit from the opinion of a lawyer.

One of the more common types of dispute we see at Mahoneys involves the interpretation of a particular duty, obligation or right provided in an agreement. There is a vital need for transparency in those situations.

The role of a Management Rights operator is not for the timid and faint-hearted. As with any community title scheme, it is impossible to please everyone. Rest assured there will be critics – no matter how professionally you perform your duties. You must learn how to work with your stakeholders and avoid adopting a hostile attitude. This will ensure a much more effective and productive operation of your scheme.