We will start this update with a quote. Donald Rumsfeld (the then US Secretary of Defence) once said:
‘There are known knowns. These are things we know that we know. There are known unknowns. That is to say, there are things that we know we don’t know. But there are also unknown unknowns. There are things we don’t know we don’t know.’
What has this got to do with bodies corporate you ask? The context is bodies corporate not getting legal advice on issues that are actually important to them.
A recent decision by the Queensland Civil and Administrative Tribunal (QCAT) has highlighted the risks involved with self-representation in strata disputes.
Aside from debt recovery, QCAT has two roles in strata law:
Most strata disputes begin in the Commissioner’s Office. This is a jurisdiction designed to encourage self-representation and to that end:
The more limited role of lawyers is notionally balanced by requiring adjudicators to take a proactive approach by making their own investigations into the dispute. What normally happens with legal proceedings is that the judge will rule on the arguments advanced by each side, but not proactively investigate them. An adjudicator under the BCCM Act is obliged to investigate a case, as opposed to simply rule on the arguments before it. This should give some assurance that the adjudicator will get to the bottom of things. However, a recent decision from QCAT shows the risks with this approach.
The decision concerned an appeal against an adjudicator’s order that a by-law prohibiting pets in a building was unreasonable. Shortly before the hearing of the appeal, the body corporate’ s barrister wanted to raise a new and important legal argument about whether the adjudicator was even entitled to rule the by-law was unreasonable.
The body corporate was not allowed to raise this new argument, even though it may have shown an error of law. QCAT made some significant findings:
What does this mean? Our view is:
We are seeing an increasing trend in committees preparing their own submissions on matters before the Commissioner’s Office or even engaging their body corporate manager to do it for them.
In an ideal world, this should be encouraged as a cost-efficient way to deal with disputes. However, it seems to us that the ideals behind the dispute resolution process set out in the legislation have been read down.
The lessons you can learn from this are to be very careful about those Rumsfeldian ‘unknown unknowns’.
Legal advice on a commissioner’s application should not be treated as an unnecessary luxury. If you are going to make or respond to an application, make sure you do it properly.