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  • #72356
    StuMcL
    Flatchatter

      We recently had a successful result at NCAT where we were able to have [a poorly performing strata manager] removed and a compulsory strata manager appointed with the duties solely as a strata manager i.e. we did not blow up the ability of the Owners Corporation to continue to guide the new Strata Manager in how we want our scheme run.

      A group of owners ran the case and we were against [very well-known strata ] lawyers who were acting for the Owners Corporation.

      We have also been able to secure the almost $70,000 in legal fees by means of a special levy to those owners not applicants to the NCAT proceedings thus saving the OC a fortune.

      Sometimes truth, honesty and hard work prevail.

    Viewing 11 replies - 1 through 11 (of 11 total)
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    • #72364
      Jimmy-T
      Keymaster

        This is really interesting and gives hope to OCs that are struggling with Strata Managers who are simply not doing their jobs.

        Unfortunately, the OP (Stu) inadvertently breached our “non disclosure” rules by naming the sacked strata managers, their lawyers and, in also posting the findings as a PDF, all the residents who combined to take action.  I have edited these and removed them.

        One of the fascinating things about this is it seems (and I can only say “seems”) that the owners who joined in on the Tribunal action won’t have to pay a share of any of the costs incurred in defending the action – about $75,000.  Worth thinking about when your neighbours come knocking, asking for your support in an action against anyone at the tribunal.

        Having deleted the whole findings, here are grounds on which the owners requested the compulsory management:

        (a) Failure to prepare a Capital Works estimate;
        (b) Making a payment from the Capital Works fund in breach of s.74(4);4
        (c) Spending excess amounts on items already in estimates;
        (d) Spending Special Levy funds on items not relevant to the Special Levy;
        (e) Refusing to deal with a lot owner’s managing agent;
        (f) Failing to maintain common property;
        (g) Failure to hold a meeting for Special Resolutions and failure to provide records of the Owners Corporation when requested.

        If you really want to read the whole findings, send Stu a PM (direct message) and I’m sure he’ll be happy to forward the pdf.

        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.
        #72382
        StuMcL
        Flatchatter
        Chat-starter

          Sorry for breaching the rules. [No worries – it wasn’t intentional – JT]

          Yes happy to share, it was a lot of work but the outcome was certainly worth the agrovation.

          • This reply was modified 1 month, 1 week ago by .
          #72393
          Just Asking
          Flatchatter

            Hi Stu,

            I have pm’ed you.

            Best regards.

            #72411
            TrulEConcerned
            Flatchatter

              Out of interest, was the management contract b/w the OC and the SM the standard contract provided by the Strata Community Association?

              #72412
              anon245519
              Flatchatter

                Hello, we are in a similar situation. Can you please DM the case? Thankyou

                #72424
                StuMcL
                Flatchatter
                Chat-starter

                  A bit more context, this is a cut and paste from a post I put on the OCN forum, given its my post I assume that there is no copyright issues.

                  A compulsory manager application isn’t always the death nell for improving your scheme. Yes it can be the nuclear option but we had a wonderful outcome this week with orders to remove the Strata Manager and to replace them with a Compulsory Strata Manager with powers limited to those of a ‘normal strata manager’, so in essence we kept the committee but tossed the strata manager.

                  It took some high level strategy and some dumb luck but it does prove you can get the best of both worlds.

                  First tip – start talking to all your neighbors, introduce yourself and start a chat forum, we used WhatsApp with great effect. When we first started the action we had maybe 15 lots on the group, we now have almost 50% of lots on the group, this proved VERY important towards the latter stages of our case.

                  Our situation was dysfunctional and non communicative committee, we had placed limitations on spending (large scheme) and the OC was spending our $$ on all sorts of things other than what we raised funds for i.e. used $500,000 of levies raised for cladding on plumbing and waterproofing they claimed as urgent and did not hold an EGM to resolve to replace those funds; rather they held a meeting almost 8 months later for another special levy. The strata manager was also withholding information at strata inspections such as the strata roll etc. Budgets for AGM approval, especially the Capital Works fund had $ budgeted for income but $0 for expenses – this is very clearly against the SSMA. Lack of common property maintenance, changes in common property look such as the colour of the building without holding an EGM until owners commenced NCAT action.

                  Our strata manager was in essence an unethical snake in the grass, I’m please to know we are now the 4th scheme in recent times to have had him removed. Funnily enough NCAT tribunal members must not keep a list of these things as I believe he has also been appointed as a compulsory manager … go figure.

                  So we had documented each breach of the different sections of the act in exacting detail, it probably didn’t help the OC’s lawyers that our idea of a witness statement was nothing like what they would normally look like, but the tribunal member recognized we were not lawyers and gave us heaps of leeway. TIP make sure you number the pages and use dividers, we had to reprint ours due to that omission and YES it does make it heaps easier.

                  The scheme had an AGM, online of course, and a new committee consisting of the same muppets was elected, our group of nominees missed out by 7 votes, year prior it was 20 so we had increased our support. Of particular help was the new chairperson and I had a conversation and he agreed with my concerns about budgets etc. An EGM was needed as they had spent all the special levy for the cladding on other stuff and the cladding company had now ceased work due to non-payment. The chairperson agreed the budgets myself and another owner had drawn up were ideal and allowed me to write for him a ‘Message from the Chairman’ which was published with the EGM papers and that the meeting would be held onsite. The chairperson, treasurer and one other committee member resigned and 2 of the 3 joined our NCAT action.

                  The EGM was held, interesting no committee members were present. This allowed myself and my merry group of like minded owners to get even more people to join the WhatsApp group. Community momentum was growing!

                  The witness statement of both the Strata Manager and his Assistant was gold for us, and frankly this proved important in another key area which I will get to shortly. They both basically provided in their statements confirmation of the evidence we had put against them. For instance we had evidence of circa $150,000 of expenses that were charged against accounts with budgets of $0, thats against the law.. The assistant in her statement provided a copy of the ‘strata roll’ it was 18mths old and dated as such, one of our claims was there were multiple version of the roll depending on whom they were giving it to…

                  Keep in mind these ‘witness statements’ were prepared by a legal firm located in North Sydney that specializes in strata law, a firm that has charged our strata in excess of $70,000 to defend essentially the Strata Manager on our dime. More on this later.

                  So at our first hearing we had subpoena’d a past employee of the Strata Manager and the Assistant, I’d never cross examined anyone before. The former employee claimed to not be able to remember anything, the member got clearly frustrated and indicated he thought the witness was lying. We then questioned the Assistant and again lots of memory issues and confusing herself, the member jumped in on several occasions and gave her a roasting, it was clear that the evidence of both these witnesses was not carrying much weight. The lawyers did get some evidence removed, but that worked in our favor as it meant the tribunal member had seen it so it would have stuck in his mind.

                  We then had about 6 months between hearings, meanwhile the strata manager is still spending like there is no tomorrow and the committee doing SFA. Meanwhile we are now getting a groundswell of new members joining our WhatsApp group as I’d done another strata inspection and this time was provided a copy of the strata roll, so communication with all owners was now possible.

                  By now it was clear we could likely form a functional committee at the next AGM as we believed we had the numbers, but how do you get a dysfunctional committee to call an AGM … well its simple, get 25% of the unit entitlement to agree and then the secretary has to call a meeting, its called a Qualified Request.

                  So the next step was drafting 2 motions for an EGM, first one was to fire the lawyers and the second was to hold an AGM prior to the next hearing date. We got 47% of the UE and sent the request to the strata manager. After the allotted time we were advised it was refused as it did not meet the requirements of a qualified request. We then filed papers with NCAT asking for urgent orders that the request be acknowledged and that the meeting be held.

                  The Strata Manager of course, with the help of the lawyers, provided a witness statement. The reason our request was denied .. well it appears we did not supply it on the Strata Managers prescribed form! Our urgent orders application was dismissed but the cat was now well and truly out of the bag.

                  So we get the form and reapply, this time with close to 30% unit entitlement. Of course with the delay it means our EGM is going to be held after our next hearing date, so we ask for an adjournment which of course is refused by the lawyers.

                  Off to the hearing, I’d taken many hours preparing to cross examine the strata manager. Every single aspect of the SSMA he had broken was there, about 40 points. I’d taken the precaution of labeling each one in my evidence folders provided to NCAT and the lawyers so I could talk to each point. The strata manager was like a duck in my sights, he had not prepared at all and for each item I handed him the evidence from my folder. Even the tribunal member was jumping onto the pile on, I was actually enjoying myself.

                  The lawyers re-examined the Strata Manager and made zero effort to say any of our points were not factual. It was actually funny when they asked the Strata Manager if he had now learned how to budget according to the SSMA and would do so going forward amongst other ‘undertakings’. The lawyers had already prepared their submissions in reply but held back submitting them on the day, we suspect this was because they knew we were likely to fire them and wanted to ensure maximum billing hours on their invoice!

                  A week later we held the EGM, onsite and voted to removed the lawyers and to hold our AGM, again onsite.

                  As the applicants we then filed our submissions to NCAT, which were all the same – targeting removal of the OC and full compulsory management.

                  Prior to the AGM one of the owners at my direction (as I’d already put up several motions and didn’t want the meeting to look like it was mine) asked for a motion to be put at the meeting. The motion was “The Owners Corporation resolves to request the Tribunal to appoint XXXX Strata Manager as a compulsory Strata Manager with powers and functions limited to those of a Strata Managing Agent” .

                  The meeting was held, a van with 7 men of Asian appearance turned up with a combined 42 proxies, none of the men were owners, all were from 3 real estate agencies that have multiple properties on their books – a clear case of proxy farming. The owners on the floor and proxies numbered 43! All the motions we wanted, including new budgets, were approved unopposed, the Strata Managers motion for reappointment was lost 43/42 – finally some breathing space. Note the Strata Manager used a proxy form that was misleading – keep an eye on these things and tried to over turn the called motion, but the new committee was able to fix that at the next SCM meeting.

                  We also got a clean sweep on the committee.

                  At the SCM following the AGM the strata manager was asked what the OC’s status was on their submissions in reply and he said he was not aware of any reply and would come back to us. The next day the new secretary wrote to the Strata Manager with a version of submissions in reply we wanted sent to NCAT, essentially saying that a new committee was voted in with no prior members, new budgets inline with expenses were voted in and the approved motion about what the owners had asked for the tribunal to do at the AGM. The strata manager refused the secretaries request, which again is against the SSMA.

                  That afternoon in my letterbox was a hand written envelope with the Owners Corporation’s submissions in reply, they had been submitted on the day of our AGM – I suspect the strata manager hand delivered it before our meeting, lying bastard!

                  As the applicants we had the ability to reply to the OC’s submissions in reply. We dissected them in great detail, gave reason for the member to doubt these were written by anyone other than the lawyers (which had been fired well before they should have been written). We then introduced the owners motion from the AGM and changed our request to be in line with the motion from the AGM asking for the Strata Managers appointment to be just as a Strata Manager and not replace the committee. Obviously we only did this as we now had control of the committee but importantly it alleviated the issue that many NCAT members have in compulsory management where owners loose their democratic rights to have a say in the scheme’s management.

                  With baited breath we waited patiently from the 15th of December for the decision, it arrived on the 24th of January.

                  It was with much pleasure my email to the outgoing Strata Manager with a copy of the decision was titled “Don’t let the door hit your arse on the way out”.

                  If anyone is interested in the NCAT decision I’d be more than happy to share, just shoot me a PM.

                  • This reply was modified 1 month ago by .
                  #72423
                  StuMcL
                  Flatchatter
                  Chat-starter

                    As far as I know yes.

                    #72440
                    Jimmy-T
                    Keymaster

                      As far as I know yes.

                      Hi Stu, can you copy and paste or use “quote” so we know what you are responding to? BTW, you are now officially a FlatChat Hero (and the very first, too)!

                      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.
                      #72581
                      David Ng
                      Flatchatter

                        One of the fascinating things about this is it seems (and I can only say “seems”) that the owners who joined in on the Tribunal action won’t have to pay a share of any of the costs incurred in defending the action – about $75,000.

                         

                        It would be interesting to hear how it was communicated to owners that if they didn’t join the tribunal action would be liable for legal costs. I’m assuming that if the tribunal action was unsuccessful then those who launched it would have been liable for the legal costs.

                        For those just want to live a quiet life in their strata building, it seems quite easy to be caught in a no win situation, where the wrong choice is going to leave you liable for large costs you really don’t understand.

                        #72588
                        Jimmy-T
                        Keymaster

                          It would be interesting to hear how it was communicated to owners that if they didn’t join the tribunal action would be liable for legal costs. I’m assuming that if the tribunal action was unsuccessful then those who launched it would have been liable for the legal costs.

                          They would only have been liable for their share of the costs of the OC defending itself.  They would still ahve to pay their share of their lawyers.  However, by joining the “antis” they were spared having to share the costs of defending the action.

                          Tribunal cases are usually done on the basis of both sides paying their own costs – costs are only rarely awarded and then in very spesicific circumstance.

                          However, owners who go up against their strata scheme and win are spared having to pay for a share of the OC’s  expenses, including the OC’s legal fees which have to be paid for by raising a special levy that excludes them.

                           

                          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.
                          • This reply was modified 3 weeks, 6 days ago by .
                          #72668
                          StuMcL
                          Flatchatter
                          Chat-starter

                            Further to my initial post the orders from NCAT were not clear enough around the duties of the compulsory strata manager so we sought clarification from the tribunal, this was received today;

                            The Tribunal J Ringrose has provided the following response:

                            “The duties are the usual duties of a Strata Manager appointed at an AGM with no additional functions or duties as prescribed under a. 237 of the
                            Tribunal Member J Ringrose”

                            So this formally confirms that we obtained a compulsory strata manager while retaining the committee and Owners Corporation’s powers.

                            Happy days, our SCM meeting tomorrow night can go ahead full steam!

                          Viewing 11 replies - 1 through 11 (of 11 total)
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