#28733
Jimmy-T
Keymaster

    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.

    The opinions offered in these Forum posts and replies are not intended to be taken as legal advice. Readers with serious issues should consult experienced strata lawyers.