Conciliation agreements are not enforceable – so what’s the point?

April 7, 2022

Most body corporate disputes in Queensland can only be resolved by an adjudicator in the Office of the Commissioner for Body Corporate and Community Management.  However, before an adjudication application will be accepted by the Commissioner, the applicant must show that reasonable attempts at internal dispute resolution have been made and that conciliation has been attempted or is not appropriate.  The Commissioner’s Office boasts a high rate of resolving the disputes that come before it for conciliation – usually 70% or higher.

We often help committees after they have invested time and effort in a conciliation only to find that the other party breached a conciliation agreement or has decided to file an adjudication application anyway.  But how can there still be a dispute if an agreement to resolve it was reached in conciliation?

An agreement reached in conciliation is not binding unless both parties consent to it being referred to an adjudicator so it may be converted into an order.  This is a process that is not often taken up.  It could be because there is a lack of awareness of this process, or the “agreement” does not really resolve the dispute so there is no point in converting it into an adjudicator’s order.

A common example of a conciliation agreement that doesn’t resolve anything arises out of disputes about a decision the committee has made, such as an application for approval for a renovation or keeping a pet.  The conciliation might reach the point where the lot owner has presented new information or wants the decision reconsidered, but the committee’s representatives are not comfortable simply agreeing to the request.

So the “agreement” that comes out of the conciliation may be that the lot owner will resubmit the motion to the committee or to a general meeting, and hope for a different outcome.  For statistical purposes, a conciliation agreement has been reached, but the dispute will very likely continue if there is no different decision.

More frustrating are those conciliation agreements that at face value do finally resolve the dispute.  For example, in a dispute about a breach of a by-law by an occupier continually using a visitor car park, the occupier may sign a conciliation agreement confirming that they will no longer use the visitor car park.  Fast forward in time, if the occupier starts using the visitor space again, the committee will wave the conciliation agreement around and ask about the size of the stick they believe they may now brandish against this repeat offender.

There is no stick.  The agreement is not enforceable.

An Adjudicator recently confirmed that in The Village Centre at Kelvin Grove [2021] QBCCMCmr 464 at [57]: “Agreements reached between parties to a conciliation application under the Act are ‘good will’ agreements.  They are not legally binding or enforceable.

There is still utility in conciliations before the Commissioner’s Office.  They may present the first opportunity for the parties to speak directly about the disagreement.  We explained the importance of direct communication in resolving disputes here.  They can narrow issues in dispute and set a pathway to resolve them.  They are also mandatory unless the matter is inappropriate for conciliation.

This information is intended to provide a general summary only and should not be relied on as a substitute for legal advice.

This article was contributed by Jason Carlson, Grace Lawyers.

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