Podcast: Lawyer in the Hot Seat, Part One

Here’s a thought to chill the heart of any strata “bush lawyer”; Some strata laws are manadatory and some are regulatory.

What that means is that there are laws that you must obey that come with penalties, laws without stated penalties that you still have to obey, and laws that are more guidelines than prescriptive.

Which is which, and how do we tell? That’s one of the questions that pops up in Lawyer in the Hot Seat, where JimmyT fires questions at leading strata lawyer David Bannerman, in the first part of last week’s webinar.

Other topics include:

• Does your strata manager have to give you access to the strata roll (including other owners’ email addresses)? And what do you do if they don’t?
• What are the new strata laws and meeting deadlines all about?
• What do you do about do-nothing strata committees?
• What can you do about ebikes and scooters,  and their potentially dangerous batteries, especially in older buildings?
• By-laws and renovations.
• Strata managers acting unilaterally.
• Why the Building Practitioners Act is making renovations and repairs prohibitively expensive.

All this and more in this week’s Flat Chat Wrap.

TRANSCRIPT IN FULL

Jimmy  00:00

As we announced last week, I’ve been taking part in our sponsor David Bannerman’s Lawyer in the Hot Seat session. That’s where his clients and our readers write to him with questions and being a lawyer, he can answer them definitively. It works pretty well, but we always get far too many questions to be able to answer in the one hour that we’ve got. Now, I’m going to give you the first half-hour of this, which covers things like strata rolls and email addresses, new strata laws, executive committees, bylaws and permissions for renovations, strata managers acting on their own, and the Design and Building Practitioners Act. Now, that’s going to take us up to the first 25-minutes of this podcast. So hang in there, and we will have even more stuff next week. This is the Flat Chat Wrap.

David  01:10

All right. Well, thanks, everybody, for attending. We’re going to kick off  Lawyer in the Hot Seat. We will be going through the top questions that keep on occurring through the strata industry. We’ve had a couple of hundred, or thereabouts. Jimmy’s distilled that down for us and we’re going to jump into answering those now. Jimmy cherry-picked the great number that we had and picked what he thought were topical ones. Thanks again, Jimmy.

Jimmy  01:39

I’d like to start with a question of my own, because if I don’t get it in now, we’ll never get it in. The law seems to say that strata rolls have to be made available to the owners, right?

David  01:54

Yes.

Jimmy  01:55

And they have to be maintained by the Secretary and they should contain the email addresses of the owners, if they have an email address. Am I right so far?

David  02:05

Yes, the strata roll is to contain the email addresses. If the person has nominated, they will accept service of notices via email, instead of post.

Jimmy  02:17

So when the strata secretary says to the strata manager “I want to see the strata roll and I want email addresses on it” and the strata manager says “you can’t have that, because it’s a privacy issue,” who’s right and who’s wrong?

David  02:35

If you look on our website, ‘getting access to your records’ are the keywords that you search, and then you’re going to get an article to give you the answer, which you can provide to the manager, but the strata manager is holding schemes’ records, a bit like a PO Box. If somebody wants to access the records, they’re entitled to all records; the only ones they’re not entitled to are the ones that are subject to legal professional privilege, or secret ballots. And so the strata roll, with every component, is to be produced, together with all communications, correspondence and things like that. And you could glean email addresses from communications, if they weren’t included in the strata roll and you would be entitled to use that email address gleaned from those communications to communicate with people, even if they weren’t put on the strata roll.

Jimmy  03:24

Okay. So what happens if the strata manager says “well, I don’t care what David Bannerman says, I’m not giving it to you?”

David  03:31

Then mediation and NCAT orders could flow. They could ask for a compliance investigation from Fair Trading, or they could ask for an ethics complaint from SCA New South Wales.

Jimmy  03:44

Okay. Thank you very much. Moving on to new strata laws… Under the changes to the Act last year, how have the notice periods for general meetings changed, specifically between an AGM and an EGM?

David  04:00

Well, I don’t know why they made them all the same. The things that changed were that the first Annual General Meeting had 14 clear days and then, because there was a special meeting of new owners, that gave them extra time to get their thoughts together and get their records and be in attendance. And then in addition to that 14-days, they had 7 clear business days for postage (if they were serving it by post), or if it was by email, they’d send it the day before. They’d calculate the 14-clear days after that, but in many strata schemes, not all of the owners have consented to have their notices served by post and if they haven’t done that, they’re not entitled to serve the owners via email, unless they’ve consented to it. So I think it was introduced to allow more time and make it simpler for annual general meetings. The EGM (the extraordinary general meeting), is still the older timeframe of the shorter number of days; of 7 clear days and the normal postage rules, or service by email rules. And they also brought in line neighbourhood associations to have the same period of time, as well. I don’t know if they allowed it because normally people have been served via email and the time period was greatly reduced to 15-or-16 days for that meeting to take place, because of service via email.

Jimmy  05:29

There’s a sub-supplementary question; is anyone seeing any actual benefit with the new AGM requirements for extra notice?

David  05:40

I haven’t heard of any benefits as yet.  I’m not sure that it’s resulted in greater attendance at meetings.

Jimmy  05:47

Because this also says that “we’re getting more complaints about extra notice periods; more owners forgetting and too much notice.” Are you hearing any complaints about that?

David  05:59

I would expect that would be a natural consequence of it, yes. With people’s volume of emails and social media communications, everyone is expecting everything to happen a hell of a lot quicker. To allow the proper notice period, you might be waiting close to four-weeks, with 14 clear days, or 7 clear days. We might have a public holiday in the middle there. So anywhere from sort of 22 days or more… How are people going to remember it? I could see a result of less attendance at meetings as a result of that.

Jimmy  06:35

I think our strata committee here does the mandatory stuff, but also sends out a reminder a few days or a week before; ‘don’t forget there’s an AGM coming up,’ which would be the sensible thing to do. I noticed one of the questions right at the end of that massive list of questions you sent me was, is compliance with the Strata Schemes Management Act of 2015 optional and voluntary?

David  07:09

Like any legislation, they’re broken into two categories. One is mandatory compliance and they’re the main features of the strata legislation, and they’re not identified in any particular way. The courts often construe whether things are what’s called mandatory, which you have to comply with. One of the key features that’s mandated to comply with is for an annual general meeting, you need to allow the sufficient number of postage days before the 7th or the 14th day calculation commences. And if you don’t allow for that, the meeting can be invalidated, because it was the main event of the whole strata legislation. Now, there have been other cases where say, for instance, you were engaging a lawyer to do litigation, that you had to follow the right procedure for appointment at a committee level, or at a general meeting level, and they said that was mandatory. Now this was under older legislation; this legislation, doesn’t apply now. But then, when it was also argued that the manager failed to circulate the notice to the other owners, they said that was regulatory and not mandatory, so you didn’t have to comply with that. The legislation is littered with mandatory and non-mandatory pieces throughout and sitting between mandatory and regulatory are provisions, which identify penalties for not complying with certain provisions of the legislation, leaning more to the fact that they’re more mandatory, because you can get a penalty that can be issued by Fair Trading. Not that I’ve ever seen it, but it could be, and that would need to be more of a mandatory requirement.

Jimmy  08:47

So would it help do you think, if the government said ‘this is mandatory,’ or ‘this is just regulatory?’

David  08:53

I think that would be too hard to do. I’ve never seen it undertaken for any other piece of legislation, and the same principles about statutory interpretation apply across all other pieces of legislation.

Jimmy  09:05

But you know, this is something that we are expected to interpret, are we not? Or do we leave it up to you?

David  09:12

Well, it’s up to the courts to interpret what’s mandatory and what’s not mandatory.  I can look at precedence and make evaluations about whether it’s important. To give you an example of where it’s been argued (unsuccessfully)… Remember I explained a minute ago; one of the main events is the period of notice for the Annual General Meeting? Now, someone tried the same argument, because the wording was exactly the same, but for strata committee meetings, trying to say that the meeting is invalid, because they didn’t allow enough time. And the Court of Appeal construed that it wasn’t mandatory, because strata committee meetings are more fluid and more frequent, and they should have fluidity and not have to comply with that period of time. But exactly the same wording was used across both.

Jimmy  10:07

Just when you think you’ve got things sussed, you realise you’re standing on quicksand again. I’ve got to go for an old tried and tested… A couple of people have written in; the upstairs neighbours have removed their carpet and insulation and now have exposed floorboards and the downstairs neighbours are being driven mad. And they say “we’ve got the standard flooring bylaw.” I didn’t know there was one, but there must be. What do you do? Your neighbor’s running around, especially if they’ve got kids there. Every time they move from one room to the other, you hear them; they disturb you. You might be sitting watching TV and then ‘thump!’ What can you do?

David  10:55

This is pretty much a never-ending problem; bylaw disputes. What’s weird is the first thing that you’ve got to check is to see if you actually have a bylaw that says that you’ve got to treat the surface of the floor so as not to unreasonably disturb the person below. Because when they introduced the new model bylaws, which were being adopted for strata schemes from November 2016, Fair Trading (for whatever reason; I do not know why), took that bylaw out. A lot of strata schemes that have registered since that day (which are the model bylaws without the extra bylaws put in by the developer at the time), won’t have a bylaw to deal with flooring. A lot of schemes will have a bylaw to deal with flooring and for those that do, the owners corporation can issue notices to comply. They can go to NCAT and seek a penalty of up to $1,100 for the first offence and go to NCAT and get an order that they treat the floor. Or the downstairs owner can do that last option; go to NCAT and get an order, that the owner treat the floor.

Jimmy  12:06

Only if there’s a bylaw, though?

David  12:07

Yes. If there is no bylaw, there’s a section of legislation, section 153, which talks about if somebody might create a nuisance that will adversely interfere with another owner or occupiers use or enjoyment of their life. And so that person who is below, would need to rely on an Action of Nuisance. We’ve got a detailed article on our website about nuisance and you can type in the words ‘don’t be a nuisance’ and you’ll find research that’s there on varying cases. And there is more recently a case where there was a problem with the occupier making noise through the floor. And the standard bylaw that’s been produced by Fair Trading only refers to the owner treating the floor and so in order to bring their case against the tenant, they had to rely on the nuisance case, but they failed in their evidence. They started their application smartly, but their evidence failed.

Jimmy  13:08

I’m interested in what was the evidence that failed? Why was it flawed?

David  13:13

It just wasn’t persuasive enough to convince the tribunal member to make an order that this person refrain from doing these actions. It might be possible to have an acoustic consultant who could measure the noise, to working out whether or not that was sufficient to be an unreasonable interference, because when you do live in strata, you do need to have different expectations than living in a in a house; about how you’re going to be interacting with noise from your environment. And so you can get an acoustic expert to make some readings about how loud it is and whether in their opinion they think it’s offensive noise. You can create a logbook and then you can have some independent people who are staying at the property, a guest, to give a statement that ‘this day, this time, in this location, the noise I heard was of this type, and therefore, this is what I witnessed.’ And then that combined with the bylaw and other evidence, you can prove that the floor is not treated properly. And then they can get an order to treat it.

Jimmy  13:21

Right. It’s not just the level of noise, is it? It’s the frequency too. You could have a lower level noise happening more often, but it would be the same level of nuisance for the person underneath. And just I’ll throw in here… I, on behalf of one of my readers, found this software called Snooper, which you load into your laptop, attach a microphone and whenever it hears a noise above a certain level, it will log that and put a time code on it. 

David  15:01

That could  be quite useful in relation to generating a log of evidence for the Tribunal to decipher and understand, if it’s reliable.

Jimmy  15:13

Maybe with a name like Snooper, that’s going to be harder than you might think. Anyway, it’s out there. I just warn people, don’t go onto the snooper.se website, because it’s got a Trojan virus on it. Softpedia is a website where you can download that software. But this reader said it’s actually quite effective; it actually works. I don’t know how effective it is in convincing the tribunal… I’m going to move on to non-performing executive committees. This is an interesting one; it says “I’d like to suggest one related to unresponsive strata committees, which may present an indirect method of responding to some very unfair commentary made recently on the practice in Flat Chat.” So a piece of advice… If you want somebody to give you advice, don’t start by insulting them. That would be my wee bit of non-strata advice to people, anyway. Basically, the question is, if a majority of owners have become unhappy with a strata managing agent, and want to apply to the tribunal for compulsory appointment of a new strata managing agent, and then the strata committee says “well, we don’t want that to happen and we’re got to pay for lawyers to make sure you don’t win in tribunal,” how can that be right?

David  16:47

Each party in a tribunal proceeding is entitled to legal representation, so it doesn’t matter what type of order is being sought. It’s certainly not recommended to anybody, if they’re being sued by somebody, that they don’t appear at the tribunal without that kind of defence. No matter what somebody is alleging in the paperwork, if you didn’t turn up to the hearing, they might submit more paperwork at the hearing, and then an order will be handed down. We’ve written articles about what happens when people just sit around and do nothing; they are on our website, as well. You can’t appeal the decision, if you think it was wrongly decided; you need to put your best foot forward if somebody’s suing you. And that doesn’t matter whether you’re in the local court or NCAT, or whatever court that is. Everyone will have a position that will be different, potentially, to the applicants position. What can be done, if the parties can agree, is they can provide consent orders about something and file that during the proceedings, to diffuse the dispute from going any further.  Where there’s a multiplicity of parties involved, somebody can file what’s called a submitting appearance, which is where they’ll agree to submit to the orders of the court, on the basis that this person has got to prove their case, and that there won’t be any adverse costs against them from that time. Now, that’s in a court process; that process isn’t available in NCAT. You can get similar, but you’d always be exposed to an adverse costs order at the end of the day, even if a submitting appearance was filed.  Now, just because one person has an opinion, it doesn’t mean that’s shared by the other members of the owners corporation, and if they’d like to defend themselves against the allegations that are made, a section 237 application is generally an application that the committee has not been exercising their functions properly. And the committee may have a different view about that, and would like to have the tribunal consider their position about that  at the same time as they’re considering the other person’s submission. So it’s really a decision for the committee, as to whether they want to engage the legal services to do so.

Jimmy  19:09

We’ve had cases recently though, of one notorious strata manager who basically had corralled a lot of overseas investors’ votes that he was using to stack the committee and then telling those investors that there was nothing wrong with the building, when in fact it was riddled with defects and serious defects. And when they tried to get rid of the strata manager, they came up against this thing that the strata manager was using the committee to use the scheme’s funds, to prevent him from being sacked. And eventually I think at the end of the day, the strata managers cabal lost by one vote, and he got sacked and was promptly (I have to add), was then appointed as a statutory manager to a different scheme by NCAT. I mean, this person has referred to a majority of owners. If there’s a majority, why don’t you just hold a general meeting and sack the committee?

David  20:19

With the new strata reform, they’ve just clarified to make it that you do not need to wait until the annual general meeting to re-elect a committee. You can remove a bad committee member who you don’t like by a simple ordinary resolution at an AGM. That’s a person so removed, they can’t stand for 12 months. Or alternatively, if you don’t like the whole committee, you can seek a motion to re-elect a whole new committee; the number on that committee at the same time. All you’ve got to do there is have 25% of the unit entitlements and that will be enough to require that the Secretary of the scheme convene a meeting with the relevant motion that you’ve provided, as soon as reasonably practicable and you can seek to vote in a whole new committee, or remove a particular member.

Jimmy  21:17

On that same topic, can you at that meeting, change the number of people in the committee?

David  21:26

Where there was an element of confusion, was because the AGM notice said that you must have this as an item at every AGM, some people thought that was the only time that you can consider that motion. The legislation never said that you must do it at the AGM and nowhere else. It never went as far as to say ‘and nowhere else.’

Jimmy  21:53

So you can go to an AGM and say “look, there are seven people on the committee at the moment and we want to reduce it to five?”

David  21:59

No, you’d have to put up a motion, like you would to vote on the number and the meeting would vote on the number and then you could consider the nominations. And if you’ve got more candidates than nominations that were determined at the meeting, then you would do a ballot.

Jimmy  22:16

That ballot is a poll vote, isn’t it? It’s not just a show of hands?

David  22:25

It depends on how the meeting’s being run. If it’s a Zoom meeting, and you’ve got people there via Zoom, then people can do ballots with the online voting platform that they’ve got. They have spots where you can complete the ballot online and submit the ballot through, but typically the ballot will need to be in writing, because you’ve got to nominate in writing somehow, either electronic or otherwise, the vote. Say if there were seven nominations and you’ve only got five people, you’ve got to write down in some format, whether paper or electronic, who is your top five. And then the secretary receives the ballots; they count out who has the majority, and then they’ll announce the majority. And then if somebody wanted to then call a poll vote to calculate it on unit entitlements, as opposed to a show of hands, somebody would call a poll vote, but that would need to happen before they moved on to the next motion. And then they would recalculate those votes cast, based on unit entitlements which might turn the outcome of the election.

Jimmy  23:44

Okay, that’s the first half of Lawyer in the Hot Seat and our thanks to David Bannerman for inviting us onto what is essentially his webinar. Next week, we will be looking at a variety of topics, including bathrooms and flooding and stuff like that retaining walls, disputes with councils and more bylaw disputes. Thanks for listening and we’ll talk to you again next week, for the second part of Lawyer in the Hot Seat.

Thanks for listening to the Flat Chat Wrap podcast. You’ll find links to the stories and other references on our website flatchat.com.au. And if you haven’t already done so, you can subscribe to this podcast completely free on Apple podcasts, Google podcasts, Spotify, or your favourite pod-catcher. Just search for Flat Chat Wrap with a W, click on subscribe and you’ll get this podcast every week without even trying. Thanks again. Talk to you again next week.