Conciliation Agreements – Are they worth the paper they are written on?

Are agreements reached in a BCCM Departmental Conciliation process binding on the parties and able to be enforced by one party against another?

The simple answer is no! 

For whatever reason and even though participation in Conciliation is often forced on the parties, in the absence of any subsequent adjudication order (and we address this further below), any agreement reached in Conciliation is not binding on the parties and cannot be enforced by one party against another.

This article intends to explain why that is the case and how a party can make a conciliation agreement binding. 

An agreement reached at a Departmental Conciliation (ie a conciliation arranged and held by application to the Office of the Commissioner for Body Corporate and Community Management) – is not able to be enforced by one party against another, because of Section 252E (5) of the BCCM Act, which provides as follows:

Evidence of anything said or done about a dispute in a departmental conciliation session is inadmissible in a proceeding.”

The conciliation agreement is in effect a record of what was said and/or agreed at the conciliation and accordingly, may not be presented to any court or tribunal as evidence to demonstrate that any agreement was reached in the first place and/or what the terms of that agreement was.  

This has been recognised in a number of Adjudication Decisions, including as follows:

  1.   5 Silva Street [2010] QBCCMCmr 354, in which the Adjudicator said (our emphasis added):

“I note that comments are made by the parties about the conciliation proceedings and the contents of the conciliation agreement. Pursuant to section 252E(5) of the Act, evidence of anything said or done about a dispute in a departmental conciliation session is inadmissible in a proceeding. Moreover, an adjudicator has no legislative authority to enforce a conciliation agreement. Accordingly I have not had regard to those comments.”

  1.   River Walk [2008] QBCCMCmr 364, in which the Adjudicator said (our emphasis added):

“It is important to note that I have no jurisdiction to enforce the conciliation agreement. Moreover, I note that pursuant to section 252E(5) of the Act, evidence of anything said or done about a dispute in a departmental conciliation session is inadmissible in a proceeding.”;

Accordingly, as a conciliation agreement is unable to be presented to any court or tribunal (which is necessary to enforce it) the agreement is unenforceable.

What can be done to make a Departmental Conciliation enforceable?

If a party to a Departmental Conciliation wishes a conciliation agreement to be enforceable against the other party, then (providing the other party to the agreement consents) the Conciliator may refer the matter back to the Commissioner for the purposes of an Adjudicator being appointed to make a consent order in the matter.  Then the Adjudicator’s order will be binding.

Where the body corporate is a party to the Conciliation, before any such conciliation agreement can be referred back to the Commissioner to appoint the Adjudicator to make the consent order, in accordance with s 252J of the BCCM Act the Committee must within 30 days of the Departmental Conciliation:

  1.   Ratify the Agreement;
  2.   Provide notice of the Agreement to Lot Owners; and
  3.   Confirm to the Conciliator that the body corporate has not received any notice of opposition to the Agreement.

Upon the Adjudicator making a consent order, the consent order may be enforced in the same manner as any other Adjudicator’s order.

The options for enforcing an Adjudicator’s order will be the subject of a future Activated, so stay tuned…