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Improvements and Acquiescence

THE DEFENCE OF ACQUIESCENCE:
ACT NOW OR (POSSIBLY) FOREVER HOLD YOUR PEACE

Disputes about improvements to a lot or common property can be defended by an owner on the basis that the body corporate did nothing, over an extended period of time, to enforce the scheme’s by-laws or its rights to common property.

If this defence is successful, the body corporate cannot enforce against the owner, the relevant by laws or common property rights that the owner contravened.

This is the defence of acquiescence.

Acquiescence

The High Court defines acquiescence as the contemporaneous and informed (or knowing) acceptance, or standing by, which is treated as assent (or consent) to what would otherwise be an infringement of rights.

The defence of acquiescence is arguably consistent with an adjudicator’s broad discretion to make orders that are just and equitable in the circumstances to resolve a dispute.

Adjudication

Adjudicators recognise that in some circumstances, acquiescence is relevant if a body corporate allows an unapproved improvement to remain for an extended period of time without acting.

To establish the defence of acquiescence, it is necessary to show –
1. that the body corporate did something beyond mere delay to encourage the owner in the belief that the body corporate did not intend to assert its rights;

2. the owner must have acted to his or her detriment on that belief;

3. the belief of the owner must have a reasonable basis.

Examples

Case examples where the defence of acquiescence was successful include:

1. An owner built several decks encroaching on common property between 1991 and 1993. The body corporate appeared to make no complaint about the positioning of the decks and only applied to the Commissioner’s Office in 2005. The body corporate was found to have acquiesced to the decks by failing to take appropriate action earlier to have those decks removed;

2. An owner inherited an unapproved shed constructed on the owner’s exclusive use car park. The relevant bylaw was not enforced by the body corporate for over 20 years. No objection to the presence of the shed was raised after a fire service inspection in 2014. There were many other unapproved sheds constructed on common property. The body corporate was found to have acquiesced to the shed;

3. An owner constructed a carport in about 2004 or 2005. Ownership of the lot changed in 2009. The construction of the carport was raised in a general meeting in 2009 but no specific decision was made. The body corporate were found to have been aware of the existence of the carport for some time. There was no evidence of a body corporate complaint about the carport for 10 years. The only time the body corporate became concerned about the carport was because of action being taken by local council. The body corporate was found to have acquiesced to the carport.

If a body corporate is found to have acquiesced to an owner’s improvement, it is likely that a body corporate will not be acting reasonably if it seeks to have that improvement removed.

There are of course case examples where the defence of acquiescence has been unsuccessful, and the body corporate were allowed to seek the removal of an owner’s improvement.

What to do?

The question of whether the defence of acquiescence applies will turn on the facts of the individual case.

Delay is not the only factor relevant to the defence, but it is very important. Acting early will assist a body corporate to overcome the defence.

Article Written by Brendan Pitman (17 January 2023)

Liability limited by a scheme approved under Professional Standards Legislation
Disclaimer – This article is provided for information purposes only and should not be regarded as legal advice.

Can a Body Corporate deduct money from a Caretakers remuneration

CAN A BODY CORPORATE DEDUCT MONEY FROM A CARETAKER’S REMUNERATION?

It depends on the terms of the caretaking agreement.

Caretaking Agreement

Some caretaking agreements allow the body corporate to recover the costs of rectifying a default of the caretaker by deducting the costs incurred from the caretaker’s remuneration.

If this type of clause is in a caretaking agreement, the body corporate must usually do 3 things before it can deduct money from a caretaker’s remuneration:
1. Prove that there is a default (eg that the caretaker did not clean the pool or common foyer area);
2. Do something to fix that default (eg hire a cleaner to clean the pool or common foyer area); and
3. Incur costs to rectify the default (eg the cleaner charges $330.00 to perform the cleaning duties usually performed by the caretaker).

In this scenario, the amount that may be deducted would be limited to the costs incurred and not an amount to represent general compensation or damages to the body corporate.

Repudiation

If there is no such clause in the caretaking agreement, the body corporate may breach the caretaking agreement if it decides to deduct the caretaker’s remuneration.

That is because the body corporate has a contractual obligation to pay the caretaker remuneration, and a failure to pay the full remuneration can show an intention to not be bound by the terms of the caretaking agreement.

At law, this is called repudiatory conduct.

This repudiatory conduct, if accepted by the caretaker, entitles the caretaker to sue the body corporate for damages for breach of contract.

Depending on the nature of the caretaking agreement and the repudiatory conduct, the amount of damages that can be recovered from the body corporate can amount to hundreds of thousands of dollars.

What to do?

If your bodies corporate are having issues with their caretaker, there may be other ways to address the problem. Those other avenues should be explored. If deducting the caretaker’s remuneration is desired, the body corporate must only do so within the bounds of the caretaking agreement to avoid the risk of a potentially expensive damages claim.

Liability limited by a scheme approved under Professional Standards Legislation
Disclaimer – This article is provided for information purposes only and should not be regarded as legal advice.

Two Common Misconceptions about Withholding Access to Records

TWO COMMON MISCONCEPTIONS ABOUT
WITHHOLDING ACCESS TO RECORDS

Take the following real-life example (and assume that the person satisfies all eligibility requirements):
• An ‘interested person’ or committee member starts, or threatens to start, a legal proceeding against the body corporate.
• Shortly after, the person then requests access to the financial records of the body corporate, including profit and loss statements, bank statements, tax invoices, voting papers approving expenditures, and balance sheets.
• The body corporate believes the person is fishing for information to help them in the legal proceedings.

Can the body corporate withhold access to these records?

Grounds

There are only two recognised grounds on which a body corporate may withhold access to its records.

These are:
• a legal proceeding between the body corporate and the record requester has started or is threatened, and the records are privileged from disclosure;
• the body corporate reasonably believes a record contains defamatory material.

Legal proceedings and privilege

If a legal proceeding (which would include an application to the Commissioner’s Office) between a person and the body corporate has started or is threatened, that alone is not sufficient to allow a body corporate to withhold access to its records.

The records must also be privileged from disclosure.

Unless those financial records in the above example are also privileged from disclosure (which we would think unlikely, although privilege does need to be assessed on the circumstances of each case), the body corporate would not be entitled to withhold access to those financial records.

Defamatory material

The ability of a body corporate to withhold access to its records based on there being defamatory material applies regardless of whether the requester is a committee member or an ‘interested’ person.

If a record, or part of a record, is reasonably believed to contain defamatory material, it does not mean that other non-defamatory records cannot be accessed.

The body corporate must have a ‘reasonable belief’ that a record contains defamatory material. A ‘reasonable belief’ is more than a guess, and would usually be a belief based on:
• legal advice;
• other expert advice.

It could arguably also be a belief based on, at a minimum, the committee members viewing the records and, acting reasonably, resolving to withhold access to certain records on the ground of the records containing defamatory material.

What does this mean?

A body corporate may not withhold access to its records solely because the records are confidential, or legal proceedings have been started or threatened.

The records must be privileged from disclosure, or there must be a reasonable belief that the records contain defamatory material, to entitle a body corporate to withhold access to its records.

Getting this wrong could lead to a dispute resolution application in the Commissioner’s Office, so it is important to obtain early, tailored advice about the obligations of a body corporate to allow access to its records.

Article Written by Brendan Pitman (19 July 2022)

Liability limited by a scheme approved under Professional Standards Legislation
Disclaimer – This article is provided for information purposes only and should not be regarded as legal advice.

Three Things To Do in Response to a Vague Record Copy Request

THREE THINGS TO DO IN RESPONSE TO
A VAGUE RECORD COPY REQUEST

Here are two-real life examples:

“I request copies of all correspondence from any unit owner to the body corporate requesting for the program of works relating to the water penetration into unit [XYZ] be undertaken and responses.”

“I request a printout of all payments made to any third party in relation to the program of works”

How can the body corporate comply with those requests within seven days (assuming eligibility, form of request, and payment of fee is satisfied).

Must a body corporate comply with every record request?

The answer is, no.

The trick is knowing which requests fall outside a body corporate’s obligation to avoid adverse action being taken by the requester.

Here are some guiding principles to determine whether a body corporate must comply with a copy request:

  • the requester must provide a reasonable degree of specification of the records being requested;
  • a request for a particular class or type of document is usually sufficient;
  • the requested records must be able to be readily identified by the body corporate based on the request;
  • a body corporate is required to perform some search of its records to fulfil a request;
  • a body corporate is not required to read through every document to determine whether it has information being requested;
  • the records must actually exist in order to have an obligation to provide a copy on request.

 

Approach

In the first example above, it is unlikely that an adjudicator would order the body corporate to provide the requested documents because:

  • the document range is limitless;
  • the body corporate would be required to read all correspondence from unit owners to determine whether each correspondence was about the topic of water penetration.

In the second example above:

  • if a document existed that compiled payments made to third parties, then it is likely an adjudicator would order a body corporate to provide a copy of that document; however
  • if the document did not exist, the body corporate would not be required to read the documents and create a summary of payment information contained in those documents.

 

Three Things

  1. Communicate

Ensure that communication is made to the requester (ie that the request has been received or asking for clarification of the records requested), rather than simply not responding, as we find that tends to escalate matters unnecessarily;

  1. Eligibility

Check that the pre-conditions of a copy record request are satisfied (i.e. Is the requester an ‘interested person’? Is the request in writing? Has the prescribed fee been paid?);

  1. Inspect

If you or your legal representative considers the record request to be non-compliant, contact the requester and direct them to the option of inspecting the records of the body corporate, whether it be themselves or their agent.

Article Written by Brendan Pitman (27 May 2022)

Liability limited by a scheme approved under Professional Standards Legislation

Disclaimer – This article is provided for information purposes only and should not be regarded as legal advice.

Internal Emails Between Committee Members – Public or Private?

INTERNAL EMAILS BETWEEN COMMITTEE MEMBERS
– PUBLIC OR PRIVATE?

We are often asked, do emails between committee members form part of the records of a body corporate?

The answer is…it depends (so you need to read on).

Internal communications

This is a critical question because, if they do, those emails may be accessed by an owner or prospective purchaser and there is no restriction on the purpose for which the records may be used.

A committee acts on behalf of a body corporate, and the requirement to keep correspondence is usually understood to refer to correspondence with parties external to the committee.

However, emails between committee members (which includes caretaking service contractors and letting agents as non-voting committee members) may form part of the records of a body corporate depending on:
• the role of the person sending the email at the time in which the email was sent; and
• the subject matter of the email.

Role

Understanding the role of the sender and receiver of an email is part of the process to determining whether that correspondence forms part of the records of a body corporate.

That is because there is no requirement to keep correspondence received or sent between owners, only that correspondence to and from the body corporate (or committee acting on behalf of the body corporate).

Committee members usually have two hats on. One is as a member of the committee representing all owners, and the other is as an owner. It is only those emails sent by or received by a person in the role as a committee member that may caught by the provisions about body corporate records.

Subject matter

Often the role being played by a person (as committee member or as an owner) is not clear but may be inferred by the subject matter of the email.

If the subject matter of the email is about body corporate or committee business, being carrying out the functions under the body corporate legislation, the email is likely to be a record of the body corporate.

Examples

Practical examples of internal written communications that would likely form part of body corporate records:
• a committee member advising of their resignation;
• a committee member proposing a vote outside a committee meeting;
• email exchanges between committee members about a maintenance issue at the scheme.

Practical examples of internal written communications that would likely not form part of body corporate records:
• select committee members discussing their personal opinions on a matter to be voted on at an upcoming meeting;
• a committee member seeking personal advice (not on behalf of the body corporate) on a body corporate or other matter.

This is a touchy topic, particularly where committee members wrote an email with sensitive information thinking it was not available to the public. To allay any concerns, a body corporate should seek advice either before or during the seven day turnaround time for a record request.

Article written by Brendan Pitman (5 April 2022)

 

Liability limited by a scheme approved under Professional Standards Legislation
Disclaimer – This article is provided for information purposes only and should not be regarded as legal advice.

Do Statutory Easements Allow Owners to Disregard the By-laws

DO STATUTORY EASEMENTS ALLOW OWNERS TO DISREGARD THE BY-LAWS?

A 29-month dispute about the location of an owner’s air conditioning unit has been decided by the Queensland Civil and Administrative Tribunal, with the body corporate coming out on top.

The case

 The case went like this:

  • The owner lived in an apartment with a balcony on level 8 in a high-rise building.
  • The owner wanted to install a split system air conditioning unit with the compressor above a planter box on a common property wall.
  • The scheme had the usual by-law that requires owners to obtain the consent of the Committee before installing an improvement on common property or a lot.
  • The owner sent an email to the Committee and, about a week later, arranged for the installation of the split system unit on the common property wall (without having received consent from the Committee).
  • The owner assumed it would have the benefit of a statutory easement to install the air conditioning unit on a common property wall.
  • After the owner had installed the air conditioning unit, the Committee resolved to consent to the unit being installed on the owner’s balcony only, not the common property wall.

Fast forward 14 months and an adjudicator ordered the owner to remove the air conditioning unit.

Fast forward another 15 months and the Queensland Civil and Administrative Tribunal agreed with the adjudicator.

So where did the owner go wrong?

There were two places:

  1. installing the air conditioning unit on a common property wall without the prior consent of the committee; and
  2. misunderstanding the operation of statutory easements (the focus of this article).

Statutory easements

A statutory easement is a right of way created by the law that allows a person or thing to use another person’s property.

The Land Title Act recognises the existence of an easement in favour of an owner against common property for air conditioning units supplying air conditioning to a lot (amongst other things).

This easement however only exists to the extent an easement is “reasonably necessary”.

An air conditioning unit installed in a particular location will only be “reasonably necessary” if the supply of air conditioning cannot be performed or achieved any other way, or if there is another way, that other way is not feasible or reasonably available.

Even if an easement does exist, that easement is still subject to the community management statement, which usually contains a by-law requiring an owner to obtain the prior approval of the body corporate.

So, in this owner’s case:

  1. it was decided that installing the air conditioning unit on the owner’s balcony could achieve the same result and was feasible and reasonably available, such that an easement did not exist; and
  2. if, however, an easement did exist, the owner was still required to obtain the committee’s consent, which it did not obtain.

What does all this mean?

 The key takeaways for owners are:

  1. read your by-laws, and if there are by-laws that require you to obtain prior consent, wait until the committee has made their decision;
  2. do not assume that you will have the benefit of a statutory easement;
  3. if you cannot resolve any issues with your committee, as a last resort, the matter can be resolved through the adjudication process.

The key takeaways for committees are:

  1. a statutory easement does not override the scheme by-laws;
  2. whether a statutory easement exists should inform how a committee makes their decision whether to approve an improvement to a lot or common property.

 There are many other examples and ways that easements operate in a body corporate, so it is always important to ensure that you obtain advice specific to your circumstances.

Liability limited by a scheme approved under Professional Standards Legislation

Disclaimer – This article is provided for information purposes only and should not be regarded as legal advice.