Lot Owner Claims Damages of $850 Million!

Generally we use these  bulletins for educational purposes,  but it’s getting toward that time of the year when everything goes a little crazy in the world of strata title, and so today the emphasis is on providing you with sheer relief that your strata scheme is not tied up with the sort of case in which a decision was recently made by the Supreme Court of New South Wales, where a lot owner commenced proceedings against the owners corporation claiming damages of $850 million!

The Strata Dispute Lot Owner Vs Owners Corporation

The dispute, between the occupant of an apartment located in Sydney and the owners corporation,  began life as a tenancy dispute, but the occupant (tenant), having failed to enlist the support of the NSW Civil & Administrative Tribunal (NCAT),  brought proceedings in the Supreme Court of NSW seeking among other things damages of $850 million against the owners corporation! You can imagine the insurer’s claims manager when that came through…

Needless to say, the proceedings in the Supreme Court of NSW were, to use the words of the Supreme Court Judge dealing with the final version of the proceedings, “frivolous and vexatious” and an abuse of the process of the Court.  Notwithstanding this, the plaintiff lot occupant filed applications of various kinds in the proceedings, made scandalous allegations against the owners corporation’s legal representatives, court officials and even a judge of the Court.

At the heart of the lot occupant’s claim was the suggestion that the owners corporation had somehow been involved in a criminal conspiracy which allegedly caused the plaintiff loss and damage.

Finally, on the sixth application before the Court (some of those applications being interlocutory applications for stays, injunctions and applications for recusal of various judges) the entire application was dismissed and the lot occupant was ordered to pay the owners corporation’s legal costs on an indemnity basis.  This means that the owners corporation was entitled to recover from the lot occupant not only the normal (“party/party”) costs but almost all the legal costs it had expended in having to deal with this application.

Conclusion

So as we head towards the end of the year, and if you are experiencing stress due to the matters which your owners corporation has to deal with, just remember – at least you haven’t been served with a law suit for $850 million!

If you do have issues in your strata scheme JS Mueller & Co Strata Lawyers have the experience and ability to assist you in dealing with these issues, whether they are disputes relating to the operation of the committee, questions about property and renovations, dealing with adjoining land owners and more please contact us on the details below for further assistance.

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Warwick van Ede I BEc LLM I Lawyer

Since 1990, Warwick has specialised in strata law, property law and litigation. Recognised for his expertise, he is also a NSW Law Society Accredited Specialist in Property Law. In 2021 he was selected to serve on the Property Law Committee of the Law Society  of NSW.  Profile I LinkedIn

Contact Us

For all strata law advice including by-laws, building defects and levy collections contact our specialist NSW and Sydney strata lawyers here or call 02 9562 1266, we’re happy to assist.

Will your by-laws need updating in line with the new Strata Laws?

Since last week’s article where we spoke about ‘phase 1’ of the strata law reforms, the proposed amendments to the Strata Schemes Management Act 2015 (NSW) have been released.

Below we explain the new proposed strata laws and share the timeline for their introduction here.

Original Owners Votes

•  If a scheme comprises of more than two lots the proposed amendments provide that the value of a vote cast by an original owner, usually a developer, of a strata scheme may be reduced.

Strata Committees

• Committee member removal now only requires an ordinary resolution and once removed they’re not eligible to be on the committee for 12 months.
• Where it is called for, an election for a committee can take place at any general meeting, not just the AGM.
• A call for nominations to the committee must be included in the general meeting notice.
• A member with a conflict of interest must be excused from voting and discussion on that matter.

Strata Managers

• Must provide notice to the owners corporation 6 months prior to expiration of their agency agreement.
• Fair Trading can recommend to NCAT that a compulsory agent be appointed to manage dysfunctional strata schemes.

Internal Funds Transfer

• Under the proposed amendment for internal funds transfers, the owners corporation must, within three months of the transfer, decide at a general meeting, if the funds should be repaid, and if yes, how it should be done – via a simple reverse transfer or by special levy.

Emergency Repair Levies

• The proposed amendments will reduce from 30 days to 14 days the time period for payment of a special levy for urgent repairs. This amendment is for necessary building repairs to mitigate any serious and imminent threats to the health and/or safety of building occupants.

Work Quotes

• Multiple quotations for works exceeding $30,000 will now be required for all schemes – small and large – Also, the comparative quotations will need to be for people or companies that are not connected with each other.

Pets

• A pet bond or fee can no longer be charged by the owners corporation.
• A by-law cannot impose unreasonable burdens on people with assistance animals.

By-laws

• Under proposed changes, owners corporations may consolidate the by-laws for the scheme only by special resolution – whether or not a by-law has been amended, repealed or added.
• Two lot strata schemes do not need to pass a resolution to issue a ‘Notice to Comply’ regarding a by-law breach.

Books and Records

• The strata roll and other mandatory records must now be kept electronically.

Rentals

• Rental agents will be required to give tenants and lessees a copy of a strata scheme’s by-laws and strata management statement on commencement of a lease and whenever documents are updated if they are not provided by the landlord or head tenant.
• Rental agents will have to provide the owners corporation notice that a lot has been leased or subleased if the notice hasn’t been provided by the landlord or head tenant.
• Tenants can give notice of the lease to the owners corporation if the landlord, head tenant or rental agent fails to do so. In giving notice of the lease or sublease the regulations may prescribe the documents or other evidence a tenant must provide.

Service of Documents

• The regulations may provide for the service of documents, including by prescribing additional methods of service.

Meetings

• General Meeting Notices – time period for notices increases from 7 days to 14 days.
• Company Nominees – number of votes to be limited in a similar way to the way proxy votes are limited.
• AGM – Delivery of development documents by the developer must be done 14 days before the first AGM.

Community Titles

• Most of the above proposals will also apply to Community Title regulations.

Strata Renewals

• Allowing a strata renewal committee to operate for 2 years instead of 1 year to reflect the length of time it can take for that committee to develop a strata renewal proposal.
• Permitting the Land and Environment Court to allow a collective sale of a strata building to proceed even though some of the preliminary steps associated with the sale have not been followed correctly (eg; inadequate meeting notice periods) if that has not resulted in a substantial injustice.

• Allowing dissenting owners who do not object in good faith to have costs awarded against them (eg; where an objecting owner is a developer who is trying to obstruct a collective sale to another developer)

More information

NSW Government – https://www.nsw.gov.au/media-releases/critical-reforms-to-strata-laws

Amendment Bill – https://www.parliament.nsw.gov.au/bills/Pages/bill-details.aspx?pk=18511

Timeline – https://www.parliament.nsw.gov.au/bill/files/18511/SPI%20-%20Strata%20Legislation%20Amendment%20Bill%202023.pdf

Adrian Mueller I BCOM LLB FACCAL I Partner

Since 2002 Adrian has specialised almost exclusively in the area of strata law. His knowledge of, and experience in strata law is second to none. He is the youngest person to have been admitted as a Fellow of the ACSL, the peak body for strata lawyers in Australia. Profile I Linked

Contact US

For all strata law advice including by-laws, building defects and levy collections contact our specialist NSW and Sydney strata lawyers here or call 02 9562 1266, we’re happy to assist.

Keeping a pet in some strata schemes can be costly when schemes charge an additional fee or bond for the joy of having a pet!

The good news is that the NSW Government as part of the reform has labelled these fees and bonds as being costly, unreasonable, and unnecessary as lot owners already pay levies.

Owners already pay for the upkeep of their strata schemes including the cost of insurance to cover damage to common areas as part of their levies.

The reform is part of phase one of the NSW Government’s review to ensure we have a more transparent and fairer strata system.

This week the NSW Government will move forward on critical reforms implementing changes to ensure the system is fairer and transparent… https://www.nsw.gov.au/media-releases/critical-reforms-to-strata-laws

So, will there be a blanket ban on pet fees and bonds under the reforms for strata laws governing community living arrangements?

ARE YOUR PET BYLAWS CURRENT? DO YOU NEED A REVIEW?

Adrian Mueller I BCOM LLB FACCAL I Partner

Since 2002 Adrian has specialised almost exclusively in the area of strata law. His knowledge of, and experience in strata law is second to none. He is the youngest person to have been admitted as a Fellow of the ACSL, the peak body for strata lawyers in Australia. Profile I Linkedin

Contact Us

For all strata law advice including by-laws, building defects and levy collections contact our specialist NSW and Sydney strata lawyers here or call 02 9562 1266, we’re happy to assist.

Strata Lot Owner and Owners Corporation in Dispute

Is it legitimate for a lot owner to pressure an owners corporation not to sue her or defend legal action she takes against the owners corporation?  And what happens when the lot owner oversteps the mark?  Can the owner be held in contempt of court?  A recent NCAT case considered that very issue.

Background

There is an apartment building on Sydney’s lower North Shore which contains 6 lots.  For several years, the owners corporation and a lot owner have been in dispute about various matters.  The dispute culminated in proceedings being commenced by both the owners corporation and the owner in NCAT against each other.  The owners corporation alleged that the owner engaged in conduct which was intended to intimidate, harass and deter the owners corporation from defending the proceedings she had commenced in NCAT against the owners corporation or to improperly induce a settlement of those proceedings.  The owners corporation applied to NCAT to have the owner referred to the Supreme Court for contempt or a finding that the owner was in contempt of NCAT and that she be punished and restrained from communicating with representatives of the owners corporation in certain ways.

Owner’s Conduct

The conduct of the owner which the owners corporation considered constituted contempt included threats of disciplinary action against the owners corporation’s solicitor made by the owner, communications by the owner which impugned the professional and mental capacities and motives of the owners corporation’s solicitor, contact by the owner with partners of the firm at which that solicitor worked concerning the conduct of the solicitor, contact by the owner with employers of strata committee members and references to family members of the strata committee members made by the owner in various communications.  The case of the owners corporation was that those communications by the owner impermissibly sought to pressure the owners corporation into deciding not to defend, or to settle, the proceedings in NCAT that the owner had commenced against the owners corporation.

The Law

A person can commit a contempt of court if he or she seeks to dissuade a litigant from prosecuting or defending proceedings by making unlawful threats, by abuse or by misrepresenting the nature of the litigation.  The law distinguishes between proper and improper pressure in punishing interference with litigants.  The question is whether the pressure sought to be applied in a particular case can be described as improper which, in turn, depends on all the circumstances of the case.  Improper pressure can interfere with the administration of justice and that is why it can constitute a contempt of court.

The Outcome

NCAT concluded that whilst some of the owner’s communications were inappropriate and included abusive emails that were puerile in their tone and content, the owners corporation did not prove that those communications caused the representatives of the owners corporation to be intimidated or caused the owners corporation to capitulate or settle the proceedings the owner had commenced against it.  In other words, even though the owner may have engaged in conduct which was intended to intimidate the owners corporation or its solicitor to discourage them from defending the proceedings, the evidence did not establish that the owner had been successful in doing so or had deterred, or was reasonably likely to deter, the owners corporation from defending the proceedings the owner had commenced against it or from prosecuting the proceedings it had commenced against the owner.  Consequently, NCAT concluded that it had not been established that the owner committed a contempt and therefore refused to refer the owner to the Supreme Court.

Anything Else?

The NCAT case contains an interesting, albeit brief, discussion of the consequences for an owner who sends threatening, rude or offensive communications to representatives of an owners corporation.  NCAT concluded that the owner’s communications may expose her to the risk of defamation proceedings and observed that communications which attempt to threaten, intimidate or influence witnesses are unlawful under the Crimes Act 1900 and that use of telecommunications devices, such as emails, that threaten or harass any person also constitutes criminal conduct under the Crimes Legislation Amendment (Telecommunications Offences and other Measures) Act (No. 2) 2004.  That indicates that representatives of the owners corporation who receive abusive, rude and offensive communications from an owner are not without remedy.

Case: The Owners – Strata Plan No. 38308 v Gelder (No. 2) [2023] NSWCATEN 7.

Adrian Mueller I BCOM LLB FACCAL I Partner

Since 2002 Adrian has specialised almost exclusively in the area of strata law. His knowledge of, and experience in strata law is second to none. He is the youngest person to have been admitted as a Fellow of the ACSL, the peak body for strata lawyers in Australia. Profile I Linked

Contact Us

For all strata law advice including by-laws, building defects and levy collections contact our specialist NSW and Sydney strata lawyers here or call 02 9562 1266, we’re happy to assist.

 

Do your strata by-laws keep pace with strata law changes?

In Nov 2016, every owners corporation was required to review its by-laws within 12 months.

Most owners corporations completed their by-law review by 2018.

Since then, there have been numerous changes to the laws affecting strata buildings.

Strata law changes affecting strata buildings

They include substantial changes to the laws regulating:

• Short term rental accommodation arrangements – a by-law can now ban short term lettings in certain circumstances;
• Pets – a by-law can no longer ban pets and by-laws that do are not enforceable;
• Renovations – the Design and Building Practitioners Act 2020 now applies to many renovations – do your renovations by-laws require owners to comply with the Act?;
• Fire Safety – news fire safety laws will be introduced to increase fire safety standards for strata buildings – do your by-laws allow your owners corporations to recover fire safety upgrade costs from owners?;
• Sustainability Infrastructure – new strata laws relax the requirement for approval of sustainability infrastructure such as solar panels and electric vehicle charging stations;
• Levy Recovery – there remains controversy about recovery of debt collection costs – do your by-laws allow these costs to be recorded in an owner’s ledger and recovered by the owners corporation?

Do your by-laws take into account these changes to the law?

If not, they might not be enforceable or they might simply be outdated.

So is it time to again review your by-laws? We have conducted 100’s of by-law reviews for owners corporations across NSW.

DO YOU NEED A REVIEW OF YOUR BY-LAWS?

Adrian Mueller I BCOM LLB FACCAL I Partner

Since 2002 Adrian has specialised almost exclusively in the area of strata law. His knowledge of, and experience in strata law is second to none. He is the youngest person to have been admitted as a Fellow of the ACSL, the peak body for strata lawyers in Australia. Profile I Linked

Contact Us

For all strata law advice including by-laws, building defects and levy collections contact our specialist NSW and Sydney strata lawyers here or call 02 9562 1266, we’re happy to assist.

Adding Further Building Defects to an Existing Claim

On 17 April 2023, the New South Wales Court of Appeal in the case of Parkview Constructions Pty Ltd v The Owners – Strata Plan No. 90018 (Parkview), confirmed that an owners corporation can add new defects to an existing claim if the statutory warranty period in the Home Building Act 1989 (HBA) has not expired.

Supreme Court Amends Building Defects Statement of Claim

In the Parkview case, in the Supreme Court, the owners corporation sought to amend its Statement of Claim to add new defects. The Supreme Court granted permission to the owners corporation to add new defects to its existing claim.  The new defects that were added were not manifest when the owners corporation-initiated proceedings in the Supreme Court. Parkview appealed against the decision of the Supreme Court to the Court of Appeal.

Court of Appeal Win for Owners Corporation

The Court of Appeal upheld the decision of the Supreme Court by confirming that the owners corporation was entitled to add new defects to its existing claim and the addition was not a new cause of action but part of a single cause of action being a breach by the builder of the statutory warranties under the HBA.

Parkview argued that the addition of new defects introduced a “new” cause of action, and those new causes of action were not the same as the existing cause of action that was on foot. The Court of Appeal rejected that argument. It held that in a conventional case for breach of contract, there is a single cause of action.  That cause of action is complete when a defective structure is provided irrespective of the number of ways in which those defects have manifested themselves.  The Court of Appeal said that even though the HBA has created inroads into common law principles, however, those changes brought by the HBA do not alter the nature of the owners corporation’s claim.

Furthermore, the Court of Appeal said that a successor in title like an owners corporation sues a builder or a developer for statutory warranties under the HBA. The proceeding is based upon a breach of a single contract.  An amendment does nothing more than introduce further departures from the building contract that the builder and the developer had promised and that does not give rise to a new cause of action because the cause of action remains one, that is for a breach of the same contract.  Accordingly, the Court of Appeal held that the owners corporation’s amendments seeking to add new defects did not introduce a new cause of action and so the owners corporation was entitled to add them to its existing claim.

A Victory for Owners Corporations in NSW

This confirmation from the Court of Appeal is a great victory for owners corporations in NSW and it reconfirms the willingness of the judiciary to protect owners in strata schemes wherever it may be necessary.

Faiyaaz Shafiq I LLB GDLP I Lawyer

A highly experienced and respected, results driven Litigation Lawyer specialising in the areas of strata litigation, building & construction, commercial litigation, debt recovery, personal and company insolvency. Profile I Linked

Contact Us

For all strata law advice including by-laws, building defects and levy collections contact our specialist NSW and Sydney strata lawyers here or call 02 9562 1266, we’re happy to assist.

Under new proposed pet laws renters may soon be allowed to own pets without needing approval from landlords.

The current laws state that:

• In NSW it is up to the discretion of the landlord whether they wish to accept a potential tenant with a pet
• The only exception for landlords in NSW is that they cannot refuse assistance animals
• In other states and territories across Australia, such as the ACT, landlords are required to go to the tribunal to obtain approval for any pet refusals

These potential changes will bring NSW laws in line with other laws across Australia and provide potential tenants with pets a greater choice, restricting landlords to deny pet owners.

With these impending changes it is important to ensure your pets by-laws are up to date and take into account the recent changes to both strata and residential tenancy laws regarding pets.

IS IT TIME TO UPDATE YOUR PETS BY-LAW?

Contact Us

For all strata law advice including by-laws, building defects and levy collections contact our specialist NSW and Sydney strata lawyers here or call 02 9562 1266, we’re happy to assist.

Recent heavy rainfall in Sydney has led to an increase in compensation claims by lot owners against owners corporations due to water leakage and consequential damage.

Often, those claims are for loss of rent.

These types of claims are usually difficult for an owners corporation to defend because it has a strict duty to properly maintain and keep in good repair the common property.

However, in a recent case, the Supreme Court rejected a compensation claim by an owner for loss of rent, providing a glimmer of hope for owners corporations.

Here we share the case and outcome Supreme Court Rejects Owners Claims for Damages

Contact Us

For all strata law advice including by-laws, building defects and levy collections contact our specialist NSW and Sydney strata lawyers here or call 02 9562 1266, we’re happy to assist.

The NSW Government has announced a win for strata managers and owners corporations who have buildings under 6 years old.

You now have an avenue to pursue the rectification of any common property for major building defects, subject to eligibility.

Here we share the following:

• Key information
• What is Project Intervene?
• Who is Eligible?
• What is classified as common property?
• What is a serious defect?
• How do I register for ‘Project Intervene’?
• Related information

For specific information visit NSW Government ‘Project Intervene‘

Contact Us

For all strata law advice including by-laws, building defects and levy collections contact our specialist NSW and Sydney strata lawyers here or call 02 9562 1266, we’re happy to assist.

 

What do you need to consider in your EV Strata By-law?

 

EV by-law’s prepared by our team permits all owners to install electric vehicle chargers in their car spaces or garages and connect those chargers by cabling leading to the switchboard.

However, there are a number of matters an owners corporation needs to consider when adopting the by-law and permitting owners to install electric vehicle chargers.

Seven EV By-law Considerations

 

1. Is there sufficient room on the switchboard for additional circuit breakers to be installed for each electric vehicle charger installed by an owner?
2. Is the existing electrical infrastructure on common property sufficient to handle the additional loads generated by electrical vehicle chargers when they charge EVs? If not, who will be liable to pay for the upgrade of that infrastructure?
3. Is it possible for electric vehicle chargers to be separately metered and charged to the owner’s account instead of the owners corporation paying for the electricity that is used by the EV chargers?
4. Do the EV chargers and their use create any risks to the health and safety of other residents?
5. Are there sufficient cable trays in place in the garage or other areas to accommodate the cabling that will need to be run between electric vehicle chargers in lot owners’ garages and the switchboard.
6. Will the electric vehicle chargers be compatible with any load management system in place and the electrical infrastructure that exists in the building?
7. Is it possible for limitations to be placed on the loads drawn by electric vehicle chargers, for example, to limit electric vehicle chargers to single phase chargers drawing no more than 10amps power?

JS Mueller & Co Lawyers EV by-laws deal with some of these considerations and often is tailored to deal with most of them.

CLICK HERE FOR ELECTRIC VEHICLE (EV) BY-LAWS

 

Contact Us

 

For all strata law advice including by-laws, building defects and levy collections contact our specialist NSW and Sydney strata lawyers here or call 02 9562 1266, we’re happy to assist.