[Jimmy-T]

@Austman said:
I can’t see how the Vexatious Proceedings Act 2014 (VIC) could help?  That seems to me to be about litigants continually commencing legal action for vexatious reasons.  The OP’s situation is the reverse – they are the ones that are forced to start the action.

I wouldn’t dismiss this so readily based on the original post …

jaybee said
They are constantly at VCAT or in court with us and others apparently, but really don’t care and I think actually enjoy upsetting their neighbours with their games.

That said, the professional debt recovery route is a good tactic, especially when they also get hit for “reasonable costs” and, perhaps, their credit rating takes a slug too.

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[Jimmy-T]

Now, I may be off the mark here – and I’m hoping one of our better qualified readers will put me right if I am – but Schedule 2 of the strata regulations is automatically in place, with new by-laws replacing the old bylaws for pre-1996 buildings.

However, additional by-laws that were in place previously, or amendments to previous by-laws, carry over and are incorporated into the new by-laws (it may require a procedural vote at your next AGM, but it’s all failry straight-forward).

That said, there is always the opportunity for your scheme to adopt and mend its by-laws, especially if you want to incorporate any of the model by-laws in Schedule 3 (for post-1996 schemes).

The new model by-laws are intended to reflect the way we all live now, rather than rules for last century, so I would look at the proposed by-law changes on their merits.

However, to answer you original question, no, you don’t have to adopt any schedule 3 by-laws but you do have to accept schedule 2 by-laws, except where you have by-law in place that differs, or you wish to change.

Hope that makes sense 

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[Jimmy-T]

Have a look at the document linked here.  It outlines the fairly new laws on vexatious litigants. It seems that you can ask a superior court to declare someone a vexatious litigant when they use the court or tribunal system purely to create a nuisance for members of the community.

Obviously, if you wanted to pursue this you’d need to talk to a lawyer – but it’s all there.

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[Jimmy-T]

@Sir Humphrey said:
I don’t think I find the Tribunal reasoning unclear. I think they are saying:

The OC can seek an order for a person to rectify some by-law breach and/or pay a fine for that breach. The authority for the Tribunal to make the first order comes from the Strata Act.

If the order is made but the lot owner does not comply with the order, then the OC can apply for a further order that the lot owner be fined for failing to comply with a Tribunal order. 

The authority for the Tribunal to make this second order comes from the Tribunal Act. It is not needed specifically in the Strata Act, since it could be applied to any instance of failure to comply with a Tribunal order …

Good shot, sir!  But according to Adrian Mueller, above, that’s not quite it.

I’ll let him speak for himself but it seems that it works (or doesn’t) something like this:

Joe Bloggs builds himself a pergola on common property, in breach of by-laws, and eventually gets a Notice to Comply.

He ignores it so the committee seeks a fine at NCAT, which can fine up to 10 penalty points (currently $110) but usually starts off at a much lower rate, let’s say $250.

The miscreant pays the fine … but the pergola remains.  The committee goes back to NCAT and this time, for a subsequent offence, he can be fined up to 20 penalty points, but for the sake of argument, let’s say he gets hit for $500.

He refuses to shift it.

Now, under the previous laws, the next step would be to seek orders from NCAT. If the miscreant ignored them, he was in for a big fine for breaching a Tribunal order.

What Adrian Mueller and the Tribunal member were saying was that the capacity to fine the miscreant for breaching a Tribunal order relating to a by-law breach, no longer exists.

If the lady who had polished her concrete floor had been pinged six months later, she could have kept things exactly the way they were, paying the occasional by-law breach fine when it came up, until the committee gave up.

And that’s the problem – when it’s worth the miscreant paying modest fines (for instance, if we are eventually allowed to ban or restrict Airbnb) then we will be unable to prevent by-law breaches by seeking penalties through Tribunal orders.

Does that make sense?

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[Jimmy-T]

Here’s a response from Adrian Mueller, the strata lawyer from JS Mueller who first brought this to our attention:

There is a loophole in the legislation. The loophole was accurately exposed by NCAT and reported in the press.

The loophole is quite simple. If a person is breaching a by-law, an owners corporation can apply to NCAT for an order to require the person to stop breaching the by-law.

If NCAT makes an order to require the person to stop breaching the by-law, and the person ignores the order, an owners corporation is not able to ask NCAT to impose a monetary penalty on the person for breaching its order (whereas previously, under the old strata laws, the owners corporation could do so).

As Fair Trading has stated, an owners corporation can apply to NCAT to impose a monetary penalty on a person for breaching a notice to comply with a by-law issued by the owners corporation.

However the penalties that can be imposed by NCAT in those circumstances are modest, and those penalties do not require the person to stop breaching the by-law.

To conclude, the loophole does exist and it should be closed by legislative amendment. I hope that my explanation of the loophole has been helpful.

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[Jimmy-T]

I have just realised that SparkleMuppet has gone and raised this issue under another topic head and not even bothered to respond to the answers given here.

It was only last week that I rapped someone else over the knuckles for this.

Please use the thread you start, and don’t waste everyone’s time firing off different versions of the same questions in different areas of the Forum … unless you want to get banned from the site.

Meanwhile I am shifting those posts over here … because I can.

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[Jimmy-T]

Fundamentally, the shed builder is not using their car space for what it was intended (in the DA of the block) and is also preventing their neighbour fron reasonable access to their space.

The car space may not be common property but the concrete slab on which it sits is, so anything attaching the shed to the floor, walls or ceiling is in breach.

There is no simple cure for selfish stupidity so you should first of all establish protocols for what people can and can’t do in their car spaces – then enforce them –  before it all gets out of hand

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[Jimmy-T]

Unless there has been a court order that information revealed during a case is  “sealed” then you can publish or show anything you like to anyone you want (only not on this forum as we don’t have that level of defamation insurance).

But if you have the evidence, why aren’t you doing the simple thing and taking your owners corporation to the Tribunal seeking orders compelling them to so something and compensate you for your losses accrued while they failed to act.

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[Jimmy-T]

Just to add some meat to the bones of this discussion, this is what it says in the relevant published proceeding at NCAT: The Owners – Strata Plan No 82306 v Anderson [2017] NSWCATCD 85 heard before Wright J (President), M Harrowell (Principal Member), R Seiden SC (Principal Member)

 ’35. The 2015 Act does not contain any substantive provision that would allow the Tribunal to order the payment of pecuniary penalties for non-compliance with orders concerning the operation and management of a strata scheme.’ 

The document goes on to say that the Tribunal can fine owners who defy NCAT orders, but that is a very different thing.

Apart from anything else, those fines would be paid to government funds, which undermines not only the whole principle of owners corporations being able to apply for financial penalties, but that those penalties can then be paid to the owners corporation funds.

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[Jimmy-T]

Contrary to what you may have read, the law in NSW (and I suspect elsewhere too) doesn’t forbid anyone from voting because of a perceived conflict of interest, but rather that the conflict be declared.

Why? You could argue that every strata owner has a financial stake in decisions they make, so such a ban would be unfeasible.

Instead you have many avenues of recourse for decisions made unfairly or unjustly through VCAT, specifically through section 165 and 167 of the Owners Corporations Act 2006 (below).

In practice, I would go to your committee and tell them, in writing, that unless they return the common property to the owners (collectively) or immediately offer compensation at a commercial rate determined by an independent valuer, you will pursue them under section 165 (1a, 1b, and 1c).

You will also seek the removal of members who have knowingly acted wrongly, under the terms of Section 165 (h)(iii).

If they ignore or reject this fair warning, you can then proceed with the knowledge that their behaviour will be considered under the terms of Section 167 of the Act.

It’s also worth noting that there is a legal precedent for pursuing this action, established under a High Court ruling, that agreement to unlawfully take possession of common property, albeit using valid instruments of strata law, is considered to be “fraud against the minority”.

If you are feeling sufficiently emboldened, you might get a strata lawyer to write the letter outling your options, then charge the dodgy committee members for the cost of doing so.

 

165 What orders can VCAT make?

(1) In determining an owners corporation dispute, VCAT may make any order it considers fair including one or more of the following—

(a) an order requiring a party to do or refrain from doing something;

(b) an order requiring a party to comply with this Act or the regulations or the rules of the owners corporation;

(ba) an order authorising a lot owner to institute, prosecute, defend or discontinue specified proceedings on behalf of the owners corporation;

(c) an order for the payment of a sum of money—

(i) found to be owing by one party to another party;
(ii) by way of damages (including exemplary damages and damages in the nature of interest);
(iii) by way of restitution;

(d) an order varying any term of a contract or agreement;

(e) an order declaring that a term of a contract or agreement is, or is not, void;

(f) an order declaring—

(i) the terms of a delegation; or
(ii) the meaning of a rule of the owners corporation;

(g) if an owners corporation is required under this Act to have a committee and a committee has not been appointed at or immediately after the first annual general meeting, an order appointing a committee of the owners corporation;

(h) an order appointing (with the person’s consent) or revoking the appointment of—

(i) the chairperson of the owners corporation;
(ii) the secretary of the owners corporation;
(iii) a member of a committee or sub-committee of the owners corporation;

(i) an order—

(i) appointing a person (with the person’s consent) as manager of the owners corporation, on specified terms and conditions;
(ii) revoking the appointment of a manager of an owners corporation;
(iii) imposing conditions or restrictions on the management by a manager of the owners corporation;

(j) an order in relation to damaged or destroyed buildings or improvements;

(k) an order as to the payment of insurance money under any policy taken out by an owners corporation;

(l) an order requiring an order to be recorded in the owners corporation register, the register of managers or in the Register kept under the Transfer of Land Act 1958;

(m) an order requiring the Registrar to amend the Register.

(2) In awarding damages in the nature of interest, VCAT may base the amount awarded on the interest rate fixed from time to time under section 2 of the Penalty Interest Rates Act 1983 or on any lesser rate it thinks appropriate.

(3) VCAT may make any interim orders and ancillary orders it thinks fit in relation to an owners corporation dispute. Note Clause 51AD of Schedule 1 to the Victorian Civil and Administrative Tribunal Act 1998 provides that any member of VCAT can make a declaration in a proceeding under this Act.

 

167 What must VCAT consider?

VCAT in making an order must consider the following—

(a) the conduct of the parties;
(b) an act or omission or proposed act or omission by a party;
(c) the impact of a resolution or proposed resolution on the lot owners as a whole;
(d) whether a resolution or proposed resolution is oppressive to, unfairly prejudicial to or unfairly discriminates against, a lot owner or lot owners;
(e) any other matter VCAT thinks relevant.

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[Jimmy-T]

This, from a spokesperson for Fair Trading:

“Under the Strata Schemes Management Act 2015 (the 2015 Act), the NCAT does have the power to impose monetary penalties on strata scheme owners and occupants who have failed to comply with Tribunal orders requiring them to comply with by-laws. This power is in section 147 of the 2015 Act.

In regard to the Tribunal case raised in the Sun Herald article of 12 November 2017, the Tribunal decided that it did have authority to determine this matter and on 31 October 2017, orders were made requiring the lot owner to comply with the relevant by-law by12 January 2018, or pay a penalty of $2,500.00.”

I, for one, am not satisfied with this response. Why? Firstly, they don’t address the issue, just resorting to their standard response of pointing at the Act  without explanation of how strata lawyers and an NCAT member could have got it wrong.

Also, the case they cite as proof that the new laws are working fine is the one that was heard under the jurisdiction of the old laws and is therefore irrelevant.

I mean, how stupid are these people – or how stupid do they think we are?

How do you know when politicians and bureaucrats are trying it on? When they answer the question they wish you’d asked, rather than the one you actually did.

At least two prominent strata lawyers have raised this issue.  Once again, Fair Trading resorts to smoke and mirrors. Grrrrrr!

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[Jimmy-T]

There is a very good chance that your strata scheme got planning approval based on a certain number of spaces for visitor parking.  If so any approval for resident use of parking spots is a breach of your planning approval.

You can  also take your committee to the Tribunal seeking orders that they properly manage common property, including parking spaces.

Making visitor parking spaces available to residents on any basis is not only against regulations but is a recipe for disaster. 

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[Jimmy-T]

My City of Sydney zoning, including for the building going up across from mine, defines residential lets as 90 days or more and forbids anything less.

The fact that they blithely ignore those limits and want to encourage the rest of the state to follow them in their dereliction of duty is beyond belief and suggests that the Blessed Ms Moore (for whom I have voted in every election) doesn’t give a flying fandango about apartment owner-residents and would rather suck up to her trendoid constituency who would rather do what is cool than what is right.

Or maybe I haven’t had enough coffee yet … but here is the tangle of facts we have to deal with.

Fair Trading says strata schemes can’t pass by-laws banning STHLs (some lawyers disagree).

NCAT say they can’t impose fines for by-law breaches anyway.

FT says only councils can enforce residential-only zoning so you can’t even have by-laws that say you must obey the zoning (again, some lawyers say that is not true). 

Councils refuse to do the enforcing (ironic, since it was a fine for illegal letting in Balmain that prompted the whole debate in the first place)

The STHL industry is pouring hundreds of thousands of dollars into their campaigns because they know the buildings where they will get the most resistance – the well-manged and well-maintained ones – are also the ones where they can make the most money.

We know that Airbnb, who present like a social service but act like a highly politicised global corporation, have caused huge problems in other popular tourist destinations around the world.

We know that three university studies ion NSW alone have shown that holiday lets have a detrimental effect on rents and housing availability. Airbnb dispute these reports preferring the survey from their friends at the Tenants Union that said the opposite (BTW: Where did the impoverished tenants get the money for their report, you have to wonder).

Where does that leave us? Caught between politicians (God help us), the majority of whom have no dog in this fight because there’s no holiday letting in their constituencies, and the councils who, were this an actual war, would have been shot for desertion.

Either way, unless we come up with some effective way of defending our turf that counters the negative effects of whatever legislation transpires, we are all screwed. 

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[Jimmy-T]

That’s why I said you shouldn’t make blanket statements – like the one you made in another post about noise on common property.  What if there is no by-law about noise there?

No more point scoring, OK?

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[Jimmy-T]

It seems I have been leading everyone up the garden path (again!).  So if short-term lets can’t be defined as tenancies (and I don’t dispute any of the above advice) what are they? 

The obvious answer would be a change of use to a commercial let.  But our councils, terrified that they might have to spend money on policing this, refuse to admit it’s a change of use, so we are back where we started.

And now we find that NCAT has no power to impose financial penalties, as prescribed in the strata Act, so there isn’t much point in creating the kind of by-laws described by the former Fair Trading Commissioner in this thread (item 7) .

Your best bet may be to find a strata insurer that will include a clause that massively increases premiums if the building has holiday lets in it.  Those additional premiums can be passed on to the holiday let hosts – it’s the law, not a by-law, and it’s a charge, not a fine.

All of this is a result of strata being an adjunct of a side-street of a strand of a tangle of unrelated legislation that we call, without a hint of irony, Fair Trading. 

Better regulation?  SOME regulation (and clear thinking) would be a start.

Am I the only person who foresees the NSW government being taken to court  (as occurred with the council amalgamations) to overturn any decision that means our most attractive apartment blocks will be turned into holiday hotels?

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[Author]

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