
When it comes to situations of conflict in management rights situations, one of the major causes is the difference of interpretation over the nature of the caretaking duties.
They can arise for any number of reasons. Two of the most common issues are:
At the core of each dispute is normally a different set of expectations by each party as to what the agreement requires and a breakdown in communication.
For whatever reason, we are observing escalating levels of frustration from both body corporates and resident managers when it comes to disputes of this nature. Fortunately, there are some things that can be considered before a dispute degenerates into a battle of words, or worse.
To pro-actively manage the resolution of a dispute of this nature we strongly recommend that both parties consider the following:
These approaches should ensure a far more productive outcome than litigation. That being said, ultimately, the Commercial and Consumer Tribunal (CCT) has the power to declare what the proper interpretation of an agreement is with respect to duties. The proper interpretation of what an agreement requires is determined by what a reasonable person, with an understanding of its commercial purpose, would understand its terms to require.
Some committees (and their advisers) seem to take the mistaken view that if the performance of a duty is in doubt, issue a breach notice. This is not the correct way to solve problems of this nature. Conduct of this nature will often come back to haunt committees when the validity of the breach notice is ultimately decided by the CCT.