This article and Q&A about strata dispute resolution and NSW Civil & Administrative Tribunal (NCAT) has been supplied and written by Leanne Habib, Premium Strata and Allison Benson, Kerin Benson Lawyers.
Question: During the strata dispute resolution process, if an Owners Corporation breaches court orders, what recourse does the owner have?
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During the strata dispute resolution process, if an Owners Corporation breaches court orders, what recourse does the owner have? As a lot owner, if I go back to NCAT it will cost me approximately $5k in legal fees.
NCAT will fine the Strata Plan approx. $5k and they get to keep the money but that does not solve my problem if the Owners Corporation still does not comply with the orders.
How can I get the orders fulfilled?
Answer: The failure by the owners corporation to comply with the NCAT Orders could be the basis upon which to seek the compulsory appointment of a strata manager.
The failure by the owners corporation to comply with the NCAT Orders could be the basis upon which to seek the compulsory appointment of a strata manager.
If successful, then there would be no strata meetings or voting for a period of usually 12 months and the compulsory agent makes all the decisions on behalf of the owners corporation and strata committee. It would then be the compulsory agent’s role to implement the Orders of NCAT.
Leanne Habib
Premium Strata
P: 02 9281 6440
E: [email protected]
You can connect with Leanne & Premium Strata on Facebook, Twitter & LinkedIn.
This post appears in Strata News #228.
Strata Dispute Resolution and NSW Civil & Administrative Tribunal (NCAT)
The Strata Schemes Management Act 2015 (NSW) which commenced on 31 October 2016 made some significant changes to the existing statutory dispute resolution procedures that strata managers, owners corporations and lot owners should be aware of. These are detailed below but first, we looked at the previous strata dispute resolution process.
The Current Dispute Resolution Process
The current Act, the Strata Schemes Management Act 1996 (NSW), requires most strata disputes to be mediated prior to an application being accepted by the NSW Civil & Administrative Tribunal (NCAT) registry.
There are a few exceptions including applications for interim orders and applications for the compulsory appointment of a strata manager. Mediations are usually conducted by mediators from the Office of Fair Trading.
Mediations can take between one to three weeks to arrange.
Adjudicator’s Orders
If an agreement was not reached at mediation, or, if the mediation agreement has been breached, in most instances the next step is to file an application for Strata Scheme’s Adjudicator’s orders. These applications are “heard on the papers”. This means that the applicant, respondent and any interested parties must file written submissions and evidence in accordance with the timetable provided by the NCAT registry.
The evidence is usually by way of a statutory declaration. To view submissions made by interested parties you must contact the NCAT registry and make arrangements to view the file.
NCAT copying fees will apply if you wish to make copies. After the closing date for submissions, an Adjudicator is assigned and they review the filed documents and make a written decision which is then posted out to the parties.
If you wish to appeal the decision of an Adjudicator then you must file an application for NCAT orders. Strict time limits apply and legal advice should be sought on the date the order takes effect and the time limit for filing an appeal.
Leave to appeal outside of time can be applied for however it can be difficult to obtain. Costs orders are not available in this type of application.
Interim Orders
These are Adjudicator’s orders that are made on an urgent and usually ex parte (meaning without the other party being present) basis. They are generally reserved for matters where an order is required to preserve the status quo prior to an Adjudicator making final orders. Interim order applications must be filed together with applications for Adjudicator’s orders.
Tribunal Orders
Applications for Tribunal orders are filed with the NCAT Registry. The Registry serves the application and a notice of directions hearing. Unlike Adjudicator’s orders, the parties must attend NCAT for hearings. Applications can be made for telephone hearings in some circumstances.
There is no right of appearance in NCAT and leave to appear must be sought at either the first directions hearing or in writing beforehand. At the first direction hearing, orders setting out a timetable for the progression of the matter are made. These will include dates when submissions and evidence are due.
The Registry will also re-list the matter, for a further directions hearing or for final hearing.
Although the rules of evidence do not apply (except in civil penalty matters such as for a breach of a notice to comply) the proceedings are similar to court proceedings in that both parties are to appear and argue their case before an NCAT member.
The Member may restrict each parties’ time to provide arguments and adduce its evidence. At the end of arguments, the Member may reserve their decision or give an oral decision when the arguments have closed. You have the right to request written reasons for the decision.
Appeals are strictly limited both in time and the types of appeals that can be made. We recommend you seek legal advice before instituting any appeal.
The new NCAT Process
The Strata Schemes Management Act 2015 provides for a new strata dispute resolution process. Owners Corporations can establish their own independent strata dispute resolution process and the NCAT is given wider powers. Mediation is still required however prior to applying for orders for most types of matters.
Arguably the largest change is that there will be no more applications for Adjudicator’s orders and all applications must be made for Tribunal orders.
This means that all applications will now be heard in person (or if leave is granted over the telephone) and parties will need to attend the NCAT to present their arguments and evidence. Leave to appear is still required and the same provisions of the Civil & Administrative Tribunal Act 2013 (NSW) apply to applications for leave.
The process for Tribunal orders detailed above will remain the same although it is expected that there will be an increase in the number of matters listed at each directions hearing (meaning more time should be set aside to attend directions hearings) due to all matters now being heard by the Tribunal.
The ability to appeal from a Tribunal decision is unchanged.
Any further questions about strata dispute resolution and NCAT?
For further information about these matters, please contact:
Allison Benson
Kerin Benson Lawyers
P: 02 4032 7990
E: [email protected]
This article is not intended to be personal advice and you should not rely on it as a substitute for any form of advice.
Read next:
Are you interested in more information about strata dispute resolution or information particular to strata legislation in NSW? Visit Strata By-Laws and Legislation, Strata Law Reform OR Strata Legislation NSW pages.
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We have received the following question/comment from one of our readers:
In reading your article in Strata Life I got the distinct impression that your solution was to punish the strata managing agent, but as an agent, the strata managing agent has no power to comply with an NCAT order when the owners corporation strata committee directs him not to comply. I would like to have seen your article canvas that scenario as it is more the norm than a strata managing agent failing to comply with an NCAT order.
Leanne Habib, Premium Strata replied:
In our view the strata manager would be duty bound to attempt to implement Orders made, but, of course, the strata manager could not act against the express wishes of its principal. It should, however, take reasonable steps to advise the Owners Corporation of its obligations to comply with such orders or take steps to appeal an order where there are grounds for appeal. But not taking any action in relation to orders in our view does not address the issues.
We have received the following question from one of our readers:
Could you please include in your article if the Owners Corporation is allowed to decide to use the Owners Corporation’s funds to employ a lawyer for the Tribunal? Or is the default presumption parties can’t have a lawyer and they have to seek leave from the Tribunal if they want one and have a good reason.
Allison Benson, Kerin Benson Lawyers replies:
The provisions of section 103 of the Strata Schemes Management Act 2015 apply as does regulation 26 of the Strata Schemes Management Regulation 2016. Even after these are complied with anyone representing another entity must seek leave in NCAT.