Termination of a Caretaking Agreement - A Goal for the Bodies Corporate

After years of what has been, quite obviously a one-sided match favouring caretakers, a body corporate has finally managed to put one past the keeper.

In the recent QCAT decision of Zhou Lim Pty Ltd v Body Corporate for Miami Pacific [2020] QCAT 261, Member Holzberger accepted the Body Corporate had validly terminated the caretaking agreement after having served a Remedial Action Notice (RAN) as a consequence of the Caretaker having failed to properly discharge its caretaking obligations.

In a hearing over three days, Member Holzberger concluded that:

1. The RAN was validly issued;
2. The Caretaker’s assertion that a reasonable time to carry out the remedial work was not given by the Body Corporate was not supported by evidence; and
3. The Caretaker had failed to comply with the RAN.

However, before bodies corporate start punching corner flags “Tim Cahill style”, it should be noted this case is a little unique on its facts.  

First and foremost, the Caretaker was not legally represented at the hearing of the application.

Whilst Member Holzberger noted the Caretaker had been assisted by a law firm in the lead up to the hearing, Mr Cheng Lim appeared personally in his capacity as Director of the Caretaker, without the assistance of a legal representative.  This might explain the state of (or really, the lack of) the Caretaker’s evidence given at trial.

We interpret some of the comments made by Member Holzberger (particularly regarding the validity of some of the complaint in the RAN and the time to remedy) to imply that had proper evidence been produced in support of the Caretaker’s position (assuming such evidence existed), then the findings might have been quite different.

Curiously, the RAN issued in this matter set out what must be done, in the view of the Body Corporate, to remedy each of the alleged breaches.  Despite this approach being criticised in another caretaker dispute[1] (in which the presiding QCAT Member stated that this practice may be sufficient to invalidate a RAN), Member Holzberger appeared to raise no objection in this case about that approach being adopted.

Our obvious, but perhaps well-founded pessimism aside, the evidence produced by the Caretaker at the hearing simply did not support the position of the caretaker or adequately address the legal issues at hand, such that Member Holzberger was really left with no alternative other than to find that the caretaking agreement had been validly terminated.

So, adopting the football analogy further:

• Whilst this might be a goal scored for bodies corporate around Queensland; and
• It was not necessarily an “own goal” by the Caretaker,

the Caretaker clearly hadn’t taken the field by the time the goal was scored.

So while punching corner flags “Tim Cahill style” is not warranted, perhaps bodies corporate can at least give a small fist pump and a polite wave to the crowd, to celebrate this small victory.

All that said, the case is a reminder that a properly prepared RAN can justify termination of a Caretaking Agreement - if the Body Corporate acts reasonably and follows proper process.

If you would like further advice on the process of enforcing Caretaking Agreements against recalcitrant caretakers – please do not hesitate to contact us.

[1] Ultimate Property One Management Pty Ltd v Body Corporate for the Pivotal Point Residential Community Title Scheme 33550 [2018] QCAT 157.

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