Can individual commitee members get their legal fees paid for by OC?

It’s a complex question.  If they are being accused personally of something they have done in their role as a committee member, then maybe they would come under the strata committee’s legal umbrella. If they just want to add their lawyer to the team, then that’s their decision and it should probably be at their expense.

Perhaps your best tactic at this stage is to let other owners know that you will be seeking all costs, which might get them to persuade the EC to back down.

Also if the SC loses, all owners, except you, will have to pay, regardless of whether the Tribunal awards costs (which it only does in very specific circumstances).

• This reply was modified 1 year, 1 month ago by .

Hey Tim

Having been in an almost identical situation a couple of months ago, where I wanted to take the OC and individual committee members to NCAT, I offer below what I saw:

1. OC got legal advice without resorting to a meeting, but said it would not act on the advice until after they held a meeting;

2. When naming the OC and individuals as joint respondents, the OC made clear they will have different legal representation to the individuals at NCAT. Who is to say the individuals did not or would not piggy back on the OC’s pre-NCAT hearing legal advice?;

3. Only if the individuals can show they acted in good faith then it is likely that the strata insurance will cover their costs (i.e. office bearers’ liability); and

4. If the OC can convince its insurer that the OC has a reasonable chance of success at NCAT, against the applicant, then the strata insurance will cover the OC’s legal costs.

5. From what I read in the past and Jimmy reiterates the point: NCAT does not usually award costs. So it’s only in your interest to go to NCAT if your expected benefit > your expected costs. Note the OC will often have a big bucket of money to play with under the strata insurance policy.

Nice question.
First things I would ask is under what section are you seeking an order against the OC and what order?
If you are gunning for a SC member/s then that order would be under s 238 and that order would be specific to the individual/s.

Can the OC pick up the tab if the SC member “lawyers up” OR uses the OC lawyer?
Interesting and a little grey.

I have not seen case law on that.
It would be argued along the line of that as  the people are SC members that makes them an ‘assistant’ for the OC analogous to being a director on a company board (see NSWCA 2EBR case).

How a NCAT member would deal with any issue over the ability of a SC member to come under the legal expenses umbrella of the OC in a s 238 case is a matter I am yet to see in a decision. As Barrett JA says in 2EBR “The analogy with the board of directors of a company is clear but incomplete.”

We can all express our views but let’s be frank; those views are worthless. It is what the Courts say that matters and they haven’t spoken on that as far as I know.

Should you even go there?
Since the introduction of s 238 it seems to be the situation that there is not one reported case of anyone having any success removing a rogue SC member.
The reason appears to be s 238 is considered by NCAT to be on par with s 237 and as such one needs to be so hopeless an SC member/s that they bring serious dysfunction to the OC. That position is a long way from an ordinary reading of section 238. It is a bar set very high by NCAT.

Jimmy says:
“Perhaps your best tactic at this stage is to let other owners know that you will be seeking all costs, which might get them to persuade the EC to back down.”

I like the EC reference; that’s old school, nice!
A few problems there. At first instance, a single member NCAT matter at its first hearing (i.e. not an appeal), it is highly (95+%) unlikely you would get costs although it occasionally happens.
Also I am not a fan of the standard “intimidate the other party financially” with assertions about costs. Lawyers; what can be said about them.
Works on plebs but once lawyers are in the game it goes both ways, you could be up for costs and note the above comment on the s 238 success rate. Statistically you are going to have to beat the odds to win so if anyone should be concerned about costs, I will let you do the math.

Also keep in mind NCAT have to grant leave to allow representation; sadly it is somewhat automatic if one asks in a lots of cases. Not a lot of cases where leave is refused. Best avenue to pursue is to not have legal representation yourself and argue neither should the OC or other party if they seek leave. There are some good cases that put forward strong arguments why leave should be refused if sought.

I like this comment in one of the reply posts:
“expected benefit > your expected costs.”

And that is why there are a lot of problems that never get addressed in strata.
As a quick aside a lot of readers would be aware there is a small fee for owners so the strata hub can run.

Several years ago I calculated that if every unit in strata in NSW paid a $4 fee to the State it was enough to fully fund CTTTs (as it was then) expenditure dealing with strata and as such if every lot paid that $4 then going to what is now NCAT could be free. It would also mean specialist strata Members rather than any old person who might have near no strata law understanding. The cost would likely have been less that $4 per lot because I did not factor in revenue gained from application fees.
The only issue I could see with such a proposal was NCAT might get swamped with applications as people would almost be incentivized to take up their problems.
Instead we are looking at an application that costs over $100 and as such expected benefit > your expected costs comes into it for some and that is before you even ponder a brief. It is a rubbish situation. Often issues aren’t worth it financially to the individual to take on even though they should be addressed.

Bottom line when it comes to your question is that all you will get is opinion, and that is the same if you ask the same question to a lawyer.
The answer is not clear or even indicated in any case law I have seen.

My understanding is that, despite what the law says, NCAT members were growing so tired of having to explain the law to non-lawyers that legal representation has become the default rather than the exception.

If I were heading for the tribunal with a case against my strata committee, I would expect the other side to be represented (unless it was a case that insurance doesn’t cover).

So I would have to be 100 per cent sure of my case so that I could then claim costs on one of the very few grounds that they are awarded: probably that the other side must have known that they didn’t have a case.

To be 100 percent certain, I would probably need a lawyer’s advice anyway. So my advice would be:

1. Get a lawyers’ advice
2. Ask them if you have a decent chance of a) winning and b) having costs awarded.
3. If either a) or b) are in significant doubt, back away.

If a) is likely but b) isn’t, at least you know that the OC can’t or shouldn’t slug you for a share of their legal expenses.

• This reply was modified 1 year, 1 month ago by .

“Chocolate wheel” analogy is brilliant and spot on.

Indeed it is was on Flatchat i found that analogy and i did enjoy it at the time.
10 years on and it is (sadly) still spot on.

Another favorite was this one by Jimmy

Where does the CTTT get these people?
All over NSW, villages are missing their idiots.
http://www.flat-chat.com.au/2008/06/28/c-triple-t-twits/

I even had it put on a t-shirt and some one else bought one from the site it was on, to wear to a hearing they said.