The “war” regarding pets within bodies corporate has been seething for a long period of time.
This “war” continues as a result of a recent case in NSW. I am not going to bore you with the details of Cooper’s case1 as they have been widely reported and commented on in other forums2. If you would like to, you can read the full 55-page decision: see footnote.
However, this NSW Court of Appeal decision is not just another “dog case”. What I particularly want to discuss in this article, is what guidance can we obtain from the judiciary regarding by-laws and how do we implement that guidance in the future?
Due to the Covid-19 pandemic, people have been spending a lot more time in their residential accommodation and consequently, everyone wants a pet!
In NSW and VIC, walking an animal became one of the few outdoor activities that was tolerated under the restrictions. For people’s mental health, the joy of keeping a pet in their residential accommodation has been a priority to many.
So how does this impact within our Strata world? Basically, more people are seeking to have a pet (or two) within their scheme.
As a consequence, all bodies corporate (through their committee) should look at the wording of their “pet/animals” by-law and ensure that it is suitable for their scheme.
How do you enforce a pet by-law?
The starting point is to make sure your by-laws are drafted properly. The Judges in the Cooper’s Case were critical of the language used in the pet by-law (ie, how the pet by-law was drafted), but their comments went even further. Specifically, stating “the language of S136(1) is awkward” – see below:
“1363 Matters by-laws can provide for
- By-laws may be made in relation to the management, administration, control, use or enjoyment of the lots or the common property and lots of a strata scheme.
- A by-law has no force or effect to the extent that it is inconsistent with this or any other Act or law.
The subject matter of the by-laws appears to be three functions (management, administration and control) operating in relation to specified subject-matter (lots, or common property and lots, within a strata scheme).”
The language is deemed “awkward” because it does not aid the drafter of by-laws. Can I really draft a by-law that impacts on the “enjoyment of a lot”? I think not.
Although the Judges were commenting on NSW strata title laws, these are very similar to the laws in our QLD legislation. As a result, the Cooper’s Case provides us with guidance regarding how to draft a valid and enforceable by-law.
The starting point being that a lot owner’s indefeasibility of title with respect to the right of what they can and cannot do within their Lot must not be constrained by the power to make a by-law.
In other words, a by-law cannot impact on the individual rights of lot owner. By-laws are a necessary and useful tool within a Body Corporate to assist the committee in regulating common property activities and the relationships between owners, residents and other stakeholders in a scheme. By-laws need to be carefully drafted and should not simply be copied from someone else’s scheme. Also, by-laws should not deal with (or be reactive to) a one-off situation.
By-laws cannot ban pets
Once you have a well drafted pet by-law, if a resident (owner or occupier) would like to keep a “pet”, then it will make a “pet” application to the committee. Due to Cooper’s case, the committee will actually need to properly consider the application on its merit.
When we are dealing with dogs, the committee will also need to consider other legislation. For example, if a person has a recognised disability under the Guide, Hearing and Assistance Dogs Act 2009 (QLD) and relies upon the animal for assistance, the person does not need to ask permission before bringing a guide, hearing and/or assistance dog into the Body Corporate.
Certified guide dogs (either in training or fully trained) with their approved handlers have the right to enter public places, public passenger vehicles and places of accommodation. This includes shops, cinemas, cafes, restaurants, clubs, holiday accommodation, rental accommodation, Body Corporate buildings, taxis, planes, public transport and entertainment and sports venues.
The Guide, Hearing and Assistance Dog Act 2009 protects these rights and imposes penalties for people (including bodies corporate) that breach this legislation.
For a committee to appropriately identify a certified dog, look for the round blue and white cloth badge and/or harness for guide, hearing and assistance dog’s (there may also be other dog badges or brandings).
An approved handler (including those who have an alternative handler helping them to physically control the dog), trainers, and puppy carers, accompanied by a certified dog or dog in training must always carry an approved guide, hearing and assistant dog’s identify card.
It is for the committee and lot owners to understand that certified guide dogs, hearing dogs and assistance dogs are governed and protected by the Guide, Hearing and Assistant Dogs Act 2009 (QLD) – please ensure these individuals and their animals are protected from discrimination.
Concerns abouts pets
Owners and occupiers often have a range of concerns about having animals (including dogs) in a Body Corporate. The main issue for a Body Corporate appears to be the likelihood of a negative impact upon the common property or maybe a person living at or visiting the Body Corporate.
In my view, the majority of these genuine concerns of Lot owners can be appropriately addressed and eased by setting reasonable conditions within the by-law.
What about a companion animal?
A “companion” animal is very different to a certified or approved assistant animal.
An emotional support animal (including a dog) provides support through companionship and it can help ease anxiety, depression and certain phobias. A guide dog (which is a service dog) is generally allowed anywhere the public is allowed.
However, Emotional Support Animals (ESAs) are not.
For example, ESAs generally cannot accompany their owners into restaurants or shopping malls.
ESAs refer to dogs and other pets that provide emotional support and comfort to their owners on a daily basis. ESAs legally must be prescribed by a licensed mental health professional like a therapist, psychologist or psychiatrist.
Service dogs (i.e. guide dogs) have been trained to perform specific tasks for individuals and as such are usually granted access to go anywhere their owner goes.
This is different to an emotional support animal because it does not require any specific training.
Where to from here
Dealing with a beloved family pet requires the Lot owners and a Body Corporate Committee to be fair, compassionate and objective. Obviously, the starting point is having an appropriately well worded, delicately drafted by-law. Pursuant to the by-law, an owner, occupier or a guest (in other words any invitee) to the Body Corporate will be entitled to have their guide, hearing and assistance dog on-site to assist the person with the services for which the dog has been trained.
This is very different to the position where the invitee to the common property of the Body Corporate has a companion pet.
The Lot owner or occupier who has the companion pet, will need to complete an appropriate pet application and such a pet will be subject to the same conditions as all other residents within the building.
For the purposes of our Queensland Body Corporate Legislation, there is no difference between a treasured family pet and an emotional support animal.
OMB Solicitors specialises in acting for bodies corporate and preparing well worded and delicately drafted by-laws. If you require any assistance with your by-laws, please do not hesitate to contact us at OMB Solicitors.
2 Cooper v The Owners – Strata Plan No 58068  NSWCA 250 (23 September 2020)
3 Strata Schemes Management Act NSW
In this video, OMB Partner & Accredited Family Law Specialist, Abbi Golightly discusses what you need to know if your child is not returned to your care!
The Powers of Attorney Act 1998 has recently been amended to make updates to the existing Enduring Power of Attorney (EPOA) and Advanced Health Directives (AHD) forms.
What do the changes mean?
If you have a current valid EPOA and/or AHD – no changes are required. They are valid and will remain valid going forward unless a change in circumstances or amendments is required.
The current (but very soon to be outdated) EPOA and AHD forms can only be signed up to midnight 29 November 2020.
The new EPOA and AHD forms come into effect from Monday 30 November 2020. The old forms must not be used and if they are signed after 30 November 2020 they will be invalid.
If you require amendments to your current EPOA’s or AHD’s, then they cannot be amended by hand or a written variation and the new format EPOA and AHD forms must be used from 30 November 2020 onwards.
Other relevant changes to the legislation include if you do not have a financial attorney nominated on your EPOA then your spouse, child, next of kin etc cannot act as your financial attorney. Effectively, you will be in a legal black hole in risk guards to financial matters.
Queensland has now recognised New Zealand EPOA’s and they can be registered with the Queensland land titles office. Unfortunately, the reciprocal arrangement does not apply for Queensland EPOA’s are still not recognised in New Zealand.
Finally, remember as from Monday, 30 November 2020 you must use the new format EPOA and AHD forms.
“It’s the most wonderful time of the year….” Or so the Christmas song goes.
But statistically, this is not always the case for families under stress. The period immediately preceding Christmas and post-Christmas often causes such stress that pre-existing problems are brought to the surface and relationships often end.
The desire for a fresh start in the New Year or just getting through “one more Christmas” often prompts parties to consult with Family Lawyers regarding separating before or after the holiday period.
If you have separated, it is very important that as parents, we shield our children from as much of the adult issues as we can. Children observe and take in much more than we give them credit for. They pick up on stress and conflict through observations of actions, moods, and direct conflict.
When it comes to children’s arrangements, the Court’s will always make an Order which it considers to be in the child’s best interests.
Whether this is sharing Christmas Day or alternating it between parents is entirely subject to the individual aspects of each case.
OMB Family Law’s gift to you is our “helpful holiday hints” – namely some things to consider in the lead up to the festive season and when you are discussing and hopefully agreeing on the arrangements for your child or children and other family law matters this holiday period:
- Christmas is for and about children, let them enjoy it, free from the worry of their parent’s conflict.
- Christmas can cause conflict and anxiety in even the happiest of households, so if there are conflicts in your relationship with the other parent then it is your responsibility to do all that you can to ensure that the children are not exposed to conflict or adult disputes;
- The arrangements for Christmas Day must be child focused, not parent focused. Your “need” as a parent to see your child or children on Christmas Day is secondary to the best interests of your children and in all reality, of little concern or interest to the Court. Christmas is only one day of the year and whilst it may be nice to be spending it as a family, life does not always work that way. Be the adult and be child focused.
- Try to communicate with each other about present(s) for the children to ensure that there is a consistent approach on type of present and there is no double up.
- If you can, make sure arrangements for the special days are resolved well before the holiday period, as your advisors and the Courts will close in the days leading up to Christmas. This enables the stress levels for all concerned to be managed as well as enabling plans with immediate and extended family to be made.
- The capacity to bring a matter before the Court prior to Christmas is quite difficult as there is, notoriously, a lot of families which need court intervention prior to the Christmas period. Bear that in mind when trying to resolve matters.
- If you cannot achieve a Court order prior to Christmas, then a Parenting Plan is the best option available to you. A parenting plan, whilst not a Court Order which carries differing levels of enforceability and consequences for breach, is still a written agreement which the Court will consider if needs be. As the old adage says, “anything is better than nothing”.
- Do not sweat the small stuff, pick your battles, rise above it – all of those colloquialisms apply best at Christmas. It is not the time to worry about someone being five minutes late to changeover or if the kids go on (and on and on) about a present from their other parent.
- Be generous and kind if you can. If you are in a better financial position then your spouse, do not put the squeeze on them financially (ever but definitely not at Christmas). They are the person you chose to have a family with and being difficult financially will only affect your children, in the long run.
- Plan for things going wrong. A dream Christmas would be perfect, but we don’t live in a perfect world and there are no perfect parents (sorry to say!). Small issues should be noted down and raised with your advisor in the new year. Big issues – significant breaches, family violence or risk factors from alcohol consumption – need to be addressed more urgently and if needs be, contact the Police to ensure your and the children’s safety is protected.
- Get advice early. Your family lawyer is a human too – they likely have family of their own and need time to rest and relax so that they are refreshed and available to you in the New Year. If a matter is urgent then, like us at OMB Family Law, they ought to be available to you via email, but otherwise decide to have your meetings well prior to their Christmas closure. Again, if personal safety is at risk, then call 000 without delay.
- Finally, remember what Christmas is truly about – love, family, friendship, and gratitude for being in the best country around. 2020 has posed many challenges for our day to day Aussie life. Take time this year (and every year) to truly remember the meaning of the holidays. It is not a time to focus on winning against your ex, who is getting the kids the best presents or having the best holiday. Kids just want their parents and deep down the competition is likely to just make them sad.
From the OMB Solicitors to yours, may your holiday season bring you happiness (or at least as little conflict as possible), rest, and relaxation?
Our office is open until 23 December 2020 for any family law issues that may arise prior to Christmas and is available for urgent issues over the holidays.
Involvement in a motor vehicle accident is something we all drive to avoid. Motor vehicle accidents can not only cause serious injury to yourself or your passengers but from the moment of impact may also create unplanned and unwanted stress and costs. If you are involved in a motor vehicle accident, there are 3 important things to remember.
Motor vehicle accidents can be unnerving and unpleasant experiences for most people involved. We understand that following an accident, it is likely that you will suffer from shock amongst a number of other possible injuries. However, there are 3 simple tips you should try to follow if you find yourself involved in a motor vehicle accident.
Record the details of the incident
One of the most important things you should do following a motor vehicle accident is to take notes, pictures or videos of what has occurred. This should include taking the contact details (name, number and address) of the other driver or drivers involved, as well as the number plate, make and model of the other vehicle or vehicles involved in the accident. It is important to record the location of the accident which can include noting any close by roads or buildings if you are not sure of the specific address. It may also be helpful to record the time of day and weather conditions. Another thing to consider is to take the name and number of any witnesses to the accident who could be contacted at a later time to give an account of what happened.
See your doctor
Unfortunately, some motor vehicle accidents do require emergency transport to a hospital. If you suffer serious injury and require immediate transport for treatment, it can help if you are able to take note of the emergency services which attended and the hospital to which you are taken. If you do not need to attend the hospital immediately after a motor vehicle accident, it is still important that you to attend your GP or medical practitioner shortly after the accident or as soon as you begin to suffer pain or discomfort. When you attend a doctor, they will record the fact that you were involved in a motor vehicle accident and can begin to assess the injuries you may have suffered.
Make a police report
We understand that following a motor vehicle accident, it is common for the drivers involved to exchange details and handle the incident without the involvement of the police. However, it is important that after the accident you go to your local police station and report what has occurred. Police reports are very useful and are required should you decide to make a claim for compensation. The Police will provide you with what is known as a ‘QP’ number and this number will be necessary when making a claim.
These 3 tips can provide you with some initial guidance as to what you should do if you are involved in a motor vehicle accident. If your doctor advises that your injuries require ongoing treatment – whether significant treatment such as such as surgery, or more regular treatment such as physiotherapy – you may wish to consider making a claim for compensation to assist you with these costs. A claim for compensation can also help you recover lost wages, costs associated with care & assistance and also the costs associated with out of pocket expenses such as medications, travel and medical expenses .
A unanimous decision of the NSW Court of Appeal last month has sparked discussion regarding the enforceability of By-Laws within Bodies Corporate.
The Appeals Court invalidated the ‘no-pet bylaw’, identifying that such a by-law is “oppressive”.
How does this decision impact Bodies Corporate in Queensland?
Motor vehicle accidents can often lead to confusing and stressful times. They are occurrences people often do not consider until they themselves are involved in an accident. If you are involved in a motor vehicle accident, you should be aware of the initial processes which will be involved should you make a claim for compensation.
If you are involved in a motor vehicle accident – in Queensland – and decide to make a claim for compensation, the initial process is governed by the Motor Accident Insurance Act 1994 (QLD). This ensures that any claim made by any injured person follows the same process and involves the same steps.
The first step you have to take if you wish to make a claim for compensation following a motor vehicle accident is to serve the CTP Insurer of the other driver, commonly known as the Insured, with a Notice of Accident Claim Form. This form provides formal notice to the CTP Insurer of their Insured that you are seeking compensation for the accident which occurred, and contains all relevant information about the people and vehicles involved, the details of the accident and the injuries you have suffered.
It is important to remember that if you wish to make a claim for compensation, the Notice of Accident Claim Form must be served on the CTP Insurer within 6 months from the date of the motor vehicle accident. However, if you decide to consult a solicitor about the possibility of making a claim for compensation following a motor vehicle accident, you are then required to serve the Notice of Accident Claim Form within 1 month from the date you met with your lawyer.
After you have served the Notice of Accident Claim Form on the CTP Insurer, they will have 14 days to assess the Notice of Accident Claim Form and provide a compliance response. This is a formal response confirming that your claim for compensation is compliant with the requirements of the Motor Accident Insurance Act 1994 (QLD). Once you have compliance, the CTP Insurer should then offer to meet your reasonable rehabilitation costs.
From the date of compliance, the CTP Insurer then has 6 months to undertake investigations into the accident. These investigations allow the CTP Insurer to fully understand the circumstances of the accident and to determine whether they admit or deny liability for the accident. During this time, you should consider getting further and formal medical assessments of your injuries, and gathering information about the damage you may claim, such as lost wages and medical or pharmaceutical expenses.
After the 6-month investigation period has passed, the CTP Insurer has to provide notice as to whether they accept liability for the accident. It is at this time that they will likely also attempt to make an assessment of your damages and attempt to resolve your claim through making you a written offer of settlement. With any offer made by the CTP Insurer, it is important that you understand the process and the offer being made.
The offer needs to include any amount you are entitled to claim for:
- General damages
- Economic loss
- Medical expenses (past & future)
- Care and assistance
- General out of pocket expenses
When any offer is made, it is important to make sure that the offer includes everything you may be entitled to claim as any settlement is a once and for all settlement. For this reason, an injured person may choose to seek assistance and advice when negotiating a settlement
It is common that the parties involved in a motor vehicle accident will attend a compulsory conference to discuss the accident and their offers of settlement. Claims for compensation are commonly settled at this stage, however if you do not accept the offer of settlement, you will then have to make a formal Claim for damages in Court.
The process involved in making a claim for compensation following a motor vehicle accident has been streamlined by the Motor Accident Insurance Act 1994 (QLD) however we understand can still be an overwhelming and confusing. If you have been involved in a motor vehicle accident and are considering making a claim for compensation or have any questions about what is involved in making a claim for compensation, contact our Gold Coast Lawyers team for an obligation free consultation.
The global COVID-19 pandemic has plunged Australia into what some commentators have described as the worst recession since the Great Depression of 1929.
The disease’s disruption to our economy has been severe and is expected to be prolonged. The impact has already been obvious on the revenues of Australian businesses and the employment of workers. It is also the fact that many businesses and individuals who have loans from financial institutions, or receive goods from suppliers on credit, have been put in a position where they have – or will soon – default on their repayments and face bankruptcy.
This situation is, of course, stressful and challenging for lenders, faced with losing most of their assets, but also for creditors who need to make decisions about enforcing their rights to repayment, helping the lender via a repayment plan or debt agreement, or working out some other solution to recover the amount owing.
As a response to the COVID-19 pandemic, in March 2020 the Australian Financial Security Authority made changes to Australia’s Commonwealth bankruptcy laws to provide relief to those businesses and individuals experiencing financial difficulty.
These special measures were originally scheduled to end in late September but have now been extended to 31 December 2020.
Details of the relief measures
In order to help those whose ability to meet loan repayments or payment for goods supplied on credit, for example, has been affected by COVID-19, the key debt relief measures announced in March and now extended comprise:
- The minimum amount of debt required to activate a bankruptcy notice by a creditor against a debtor is increased from $5,000 to $20,000;
- the amount of time an individual has to respond to a bankruptcy notice is increased from 21 days to six months;
- people can apply for six months debt relief from creditors, an increase from the original 21-day period.
While major financial institutions are able to manage this extended period of debt relief for its lenders due to their size, smaller operators and business owners suppling goods on credit to consumers will be adversely affected. In many cases, they will not be able to pay their own bills and other liabilities as a result of the extension of debt relief for their consumers.
Accordingly, creditors will need to weigh up their options in initiating the enforcement process during this time.
Importantly, a Court Judgment is enforceable for up to six years (or twelve years with leave of the Court). In some instances, a court judgment can attract interest on the debt owed by the debtor at the post-judgment rate, with creditors able to take further steps such as a wage garnishee order to enforce repayment of the amount owing or seizure and sale of an asset. Accordingly, Bankruptcy may not be the only enforcement option available.
If a creditor decides to proceed to Bankruptcy then the customer/debtor can file for Temporary Debt Protection (TDP) with the Australia Financial Security Authority (AFSA), which stops the creditor from being able to take further enforcement action for a period of six months.
The TDP process requires the customer to file a brief statement of their financial affairs with information about income, assets and debts. This information is then supplied to the creditor in order to give them the full picture of the debtor’s position.
The creditor and debtor may then contact each other – with or without legal representation or intervention by the AFSA – during the six-month debt relief period to attempt to work out a debt repayment arrangement.
Personal Property Securities Register
For those supplying goods on credit terms to customers, the AFSA suggests registration on the Personal Property Securities Register (PPSR). An agreement with the customer combined with valid registration on the PPSR can assist creditors in having their invoices paid or the goods returned in the event that the customer is unable to pay or files for bankruptcy.
What if the debtor was already in bankruptcy?
Where a bankruptcy notice was issued before 25 March 2020, It remains the case that the debtor has 21 days to comply with the bankruptcy notice.
Additionally, for those in bankruptcy before the introduction of the Federal government’s Coronavirus Economic Response Package, any support payments are not claimable by the bankruptcy trustee as income or as an asset, regardless of whether you receive the payments before or after the date of bankruptcy.
COVID-19 supplement payments are claimable by the trustee if received before the date of bankruptcy and still in the debtor’s bank account when they become bankrupt.
How we can help you
If you are a creditor with customers facing bankruptcy or require assistance enforcing a Judgment, we at OMB solicitors can help you.
Whether it’s understanding the detail of the COVID-19 debt and bankruptcy relief measures (now extended until the end of 2020), helping you formulate a legally binding debt agreement with a debtor, or initiating court proceedings to enforce a debt, we will help you find a way to recover the debts owing to you so that you return to a strong financial position once the pandemic is over. Call our Gold Coast Lawyers today on (07) 5555 0000 or email us at [email protected] for an initial consultation.
“I have a simple agreement, I just need it witnessed”.
If I had a dollar for every time I had heard that in the years since Binding Financial Agreements became part of the Family Law landscape in Australia.
One of the major protective measures for family law litigants proposing to sign a Binding Financial Agreement is the requirement for them both to have received independent legal advice prior to signing the agreement. This advice must truly be independent.
This requirement is provided for in the Family Law Act (the ‘Act”). The advice that is required to be given by a party’s lawyer is specifically about:
- The effect of the agreement upon the rights of the party; and
- The advantages and disadvantages to the party, at the time the advice is being given, in signing the agreement.
If this advice is not given, then a BFA can be declared not binding upon the parties.
A very clear example of the effect of failing to receive such independent advice is the case of Purdey & Millington  FCCA 213 – see full decision here
In this matter:
- The parties married in 2003 and separated in or around 2014.
- There were two minor children of the relationship who were living with the Wife.
- The parties signed a BFA on 16 September 2014.
- In August 2017 the Wife applied to have the BFA declared not binding upon the parties – thus giving rise to an ability to claim property settlement.
The Wife asserted that she did not receive appropriate independent legal advice despite the document certifying that the requisite legal advice was provided.
The Wife’s case was that, after having some informal discussions, she went with the Husband to his Solicitor on 16 September 2014, to draw up what she believed to a separation agreement but that it was only to deal with some aspects of their property settlement not all of them. She believed that in Australia, you had to sign papers with a Solicitor to be considered formally separated.
After the meeting with the Husband’s Solicitor, the Husband then took the Wife to a meeting with a Solicitor who had been arranged for her.
The Husband asserted he took the Wife to the Solicitor as she “didn’t know how to get there”.
The Wife asserted that the Husband was present during the meeting with her Solicitor, which the Husband denied (saying he only came in at the start and at the end).
The Husband agreed that he paid for the Wife’s legal advice.
During her evidence, the Solicitor for the Wife stated as follows:
- The Wife was referred to her by the Solicitor for the Husband.
- She could not recall if the Husband was present during the meeting.
- She had received a copy of the BFA two or three days before the meeting.
- That during the meeting she went through the relevant provisions of the Act in relation to the effect of the document and went through each page so that the Wife would understand what was “going on”.
- She spoke with the Wife in English during the meeting.
- She did not ask the Wife if she required an interpreter.
- She had kept file notes of the meeting with the Wife.
The Court found that the Wife’s Solicitor who was by then not practicing, was not a witness of truth for the following reasons:
- The firm at which the Solicitor was practising at the time had no file opened in the name of the Wife; and
- She did not produce the file notes which she asserted in oral evidence were in existence.
Ultimately the Court found that the Wife had displaced the inference which could be drawn by the certificate annexed to the Financial Agreement and held:
- The arrangement for the Wife to receive legal advice was not made independently with the Wife, rather it was arranged by the Husband.
- The meeting, which endured for a maximum of 20 minutes, was insufficient for appropriate advice to be given to the Wife in any circumstances, even more so when she had limited English skills.
- The Husband was responsible for and paid for the legal fees of the Wife.
- The Husband was present for the duration of the meeting between the Wife and the Wife’s Solicitor.
- In the absence of file notes to support an inference of proper engagement in the wife, it could not be found that the Wife received competent legal service or the provision of any advice at all.
The Court referred the matter back for resolution through the usual litigation process.
This case highlights the utmost importance of obtaining proper and independent advice prior to signing a Binding Financial Agreement.
Best case practice requires that there be a number of discussions between a party and their lawyer prior to signing a Binding Financial Agreement and further that the independent legal advice be given in writing and acknowledged by the client as having been received. This is particularly important when the circumstances of the agreement are such that the client is being advised not to sign the document. This practice is adopted irrespective of the manner in which the matter was referred to the family law team at OMB Solicitors.
Whilst this practice may seem unnecessary when parties are in agreement as to their property settlement, it is done to ensure that the Binding Financial Agreement is considered as binding as possible.
To ensure that your Binding Financial Agreement complies with all relevant legislative requirements and that you receive proper and independent legal advice, contact our Gold Coast Family Lawyers team for advice.
COVID-19 has had a significant financial impact on individuals, businesses and Bodies Corporate alike. As a result, the Queensland Government passed the Justice and Other Legislation (COVID-19 Emergency Response) Amendment Act (“Amendment Act”) which amended the Body Corporate and Community Management Act 1997 (“BCCMA”) to assist individuals that have been financially affected and in turn support the wider Strata Community.
The Amendment Act came into force as of 25 May 2020 and will remain in place until 31 December 2020.
The existing position was that Bodies Corporate have a statutory obligation to recover unpaid levies together with the approved interest and the reasonably incurred recovery costs of seeking recovery of the unpaid levy. The changes represented in the Amendment Act overcome the need for Committee’s to consider waiving a proportion of the debt, for example the interest component as considered previously, given the current social and economic impacts of COVID-19.
The Amendment Act and what it means for Owners, Committee’s, Managers and Others, is as follows:
Sinking Fund Budgets
A key change is that a Body Corporate, may, by ordinary resolution, adjust the sinking fund budget for the current or future financial year by removing some or all of the anticipate major expenditure.
Where a Body Corporate does utilise the benefit of the Amendment Act to adjust the sinking fund budget, and amounts have been paid by owners towards the budgeted expenditure then the Body Corporate “must” refund the owners the amount paid on account of that component.
Should be noted that lot owners are not required to request the refund and Bodies Corporate and Committee’s should be weary of their obligations to avoid contravention of the Amendment Act.
For example, a scheme maybe in need of rectification works and $200,000.00 has been allocated to be collected from the owners, with a proportion to be collected within the current period and the remaining to be collected at a later date. The resultant effect is that this may be removed from the budget of the Body Corporate, if agreed by ordinary resolution. This further reduces contributions payable by lot owners.
While this seems to be a worthwhile short-term relief for owners, come 1 January 2021, the budget expenses that have been removed will be required to go into the following budget and will be collected from all owners.
This is a short-term fix. This should not be a course to be adopted where sophisticated sinking fund forecasts are not in place to determine what may be deducted and refunded to owners within the Body Corporate.
Amending the due date for Contributions Levied
Another takeaway from the Amendment Act is that Committees can alter the due dates for payment of levy contributions to the last date of the Body Corporate’s financial year. This is to provide lot owners who are suffering financially as a result of COVID-19 a further period in time to pay their contributions.
This is not a restrictive issue and can be applied on a discretionary and selective basis, or alternatively may be applied to every lot owner.
Again, cash flow forecasts are an important consideration should the Body Corporate wish to invoke the use of this Amendment.
Penalties for Late Payment
We are well aware that Bodies Corporate can charge interest at a rate of 2.5% per cent per month on outstanding contributions.
A significant amendment is the prevention of Bodies Corporate from charging penalty interest on outstanding lot owner contributions until 31 December 2020. This is further inclusive of interest on outstanding levies that had been accumulating prior to the COVID-19 pandemic.
An account requiring payment of a contribution instalment given to an owner of a lot 2 months before the commencement is not paid until 1 February 2021. The owner is not liable for a penalty for the contribution instalment being in arrears during the relevant period. However, the owner may be liable for a penalty for the contribution instalment being in arrears before and after the relevant period.
This however does not prohibit a Body Corporate from taking action to recover outstanding Body Corporate debts all together.
This amendment should not be used as an excuse for not attending to payment of your contributions as and when they fall due. Come 1 January 2020 interest will be reinstated and will accumulate at a rate of 2.5% per month on outstanding levies.
OMB strongly suggests that all outstanding arrears be satisfied prior to 1 January 2020 to avoid interest accumulating and prevent the institution of legal proceedings for the recovery of the outstanding levies.
Recommendations and takeaways:
- The Body Corporate should act reasonably in dealing with financial management and when presented with payment plans;
- Payment plans should be settled and satisfied prior to 1 January 2020;
- Bodies Corporate should be aware that the Amendment Act is a short-term fix and should be mindful of the forecasted future and financial stability of the Body Corporate; and
- Employ sensible and practical solutions to assist with the financial hardship of owners.
You can review the COVID-19 emergency financial management legislation here.
In response to concerns about delays in the Family Court system, particularly for matters with a small asset pool, the Federal Circuit Court has developed the Family Law Priority Property Pool 500 List (PPP500).
It is a specialist list designed for matters where the net assets of the parties including superannuation is or is likely to be less than $500,000. Additionally, there must not be any Trusts or Corporate Structures which would require expert investigation and the matter cannot involve any other aspect of Family Law, such as parenting or child support issues.
The PPP500 has specialized case management processes comprising:
- Registrar led resolution where couples are assisted in reaching agreement in the shortest possible time; and
- Short form Judge managed lists which apply a procedurally simpler process to the determination phase of a matter.
Close monitoring and scrutiny will be had of compliance with orders for disclosure and valuation with a focus on reducing delays and provide the parties with expanded opportunities to take ownership of their dispute resolution.
The two phases of the PPP500 proceed, in a general sense as follows:
In the PPP500, the usual requirement for filing of an Affidavit and Financial Statement is dispensed with, resulting in the costs to commence proceedings being greatly reduced. There is a specific PPP500 Financial Summary document which is to be filed at the time of filing the Application or Response.
Stages 1 – 4 set out above are expected to be completed within 90 days of filing where possible and the trial process is expected to be conducted promptly and if possible without the need for traditional trial (which results in delays).
The process is expected to and has to date, produced expeditious and effective results in matters which are simple and have asset pools which are not conducive to lengthy delays in the Court system which would result in the asset pool being eroded by significant legal fees.
Of course the process requires practitioners and parties who are focused on resolution and focusing on the big picture rather than the small minute details.
How can OMB Family Law help?
At OMB Solicitors our focus is on prompt and efficient resolution of matters which result in parties exiting the Family Law system without lengthy delays. With strategic and pragmatic advice we will guide you through your property settlement matter and recommend the use of the PPP500 where appropriate and necessary.