The QCAT decision of Peterson Management Services Pty Ltd v Body Corporate for The Rocks Resort [2015] QCAT 255 shows the importance of correct contract drafting. Most people involved in drafting and administering contracts are aware of the importance in making sure formalities are complied with. However, mistakes happen and even the smallest mistakes can have significant consequences.

BACKGROUND

In this case, Peterson Management Services Pty Ltd (PMS) was appointed the caretaking services contractor for the Rocks Resort pursuant to two contracts, the “Caretaking Agreement” and the “Maintenance Agreement”. Both contracts were entered into on 12 September 2003.

The relationship between the parties deteriorated dramatically over the years. In 2010 the Body Corporate served PMS with a number of Remedial Action Notices (RANs) (8 in total) under s 129 of the Body Corporate and Community Management (Accommodation Module) Regulation 2008 (Qld) (Regulation) requiring PMS to remedy alleged breaches or carry out the duties, which were alleged to have not been carried out. Such RANs were required by s 129 of the Regulation before the Body Corporate could take action to terminate PMS’s services under the agreements.

Subsection 129(4) of the Regulation contained the form requirements for a RAN. These including:

  • the person given the RAN must carry out the duties or remedy the contraventions identified in the notice within the period stated (Deadline); and
  • the Deadline must be “not less than” 14 days after the RAN is given to the person.

The RANs given to PMS stated that PMS must comply “within 14 days” of being served with a copy of the RAN – rather than “not less than 14 days” as required by s 129 of the Regulation.

The Body Corporate argued that the expression “within 14 days” was the same as “not less than 14 days”. The Tribunal rejected this argument as it ignored the words “after the notice is given” in s 129 of the Regulation. The issue was whether the RANs required rectification before the requisite 14 day period had expired.

DECISION

The Tribunal found that:

  • the RANs given to PMS required compliance in a period less than 14 days after the RANS were give;
  • that was contrary to the requirements of section 129(4)(c) of Regulation;
  • none of the RANs were remedial action notices within the meaning of section 129 of the Regulation; and
  • each of the RANs were invalid and of no effect.

TAKEAWAY LESSONS

The very important lesson that can be taken from this case is when issuing RANs, make sure that they comply with all formal requirements. In any situation, make sure anything done under a contract complies with any statutory requirements.