Dispute resolution in community schemes

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Overview

The State Administrative Tribunal (Tribunal) will be the one stop shop for resolving disputes between parties in community schemes if the parties have not been able to resolve the dispute themselves. The proposed legislation will set out the types of disputes that the Tribunal can resolve (scheme disputes), the persons who can apply to the Tribunal to resolve a scheme dispute (scheme participants) and disputes that the Tribunal cannot resolve.

The Tribunal’s ordinary procedures and processes under the State Administrative Tribunal Act 2004 will apply with specific provisions set out in the proposed legislation. For example, the proposals set out the matters that must be heard by a judicial member or legally qualified member of the Tribunal and the circumstances when an application for internal review of a Tribunal decision can be made.

What is a scheme dispute?

A scheme dispute is proposed to be a dispute between scheme participants about the following matters:

  • the community development statement
  • the scheme documents for a community titles scheme (a scheme document is the scheme plan, scheme by-laws, schedule of unit entitlements and scheme notice (that details the name of the community corporation for the scheme and the community corporation’s address for service)
  • the performance of, or failure to perform, a function conferred or imposed on a person
  • an alleged contravention
  • a resolution or decision of a community corporation or the council of a community corporation
  • the appointment or election of members of the council or officers of the community corporation
  • any other matter arising under the proposed legislation or scheme by-laws.

A scheme dispute is also proposed to include the following (non-exhaustive list):

  • a matter between an applicant for registration of a scheme or amendment of a scheme and a person whose consent is required or who may object to an application
  • if scheme by-laws require the consent of a person (not being the Planning Commission or a local government) a dispute between the person and the community corporation
  • disputes between an applicant and the community corporation in respect of access to information, a certificate or copies of information
  • disputes between the scheme manager and the community corporation
  • disputes between buyers and sellers concerning seller’s disclosure obligations and buyers’ avoidance rights
  • disputes of a class specified in the regulations.

Who is a scheme participant?

Scheme participant will include a community corporation in a community scheme, a member of a community corporation (being an owner of a lot or member corporation of the community corporation), an occupier of a lot in the community scheme, a registered mortgagee of a lot in the community titles scheme and a member of the council of a community corporation or an officer of the community corporation.

Scheme disputes will include disputes between community corporations in the community scheme.

What is not a scheme dispute?

The following disputes (non-exhaustive list) are proposed to be not scheme disputes:

  • disputes that are the subject of review under the Planning and Development Act 2005
  • a dispute with the Registrar of Titles
  • a dispute with the Valuer-General or a rating and taxing authority
  • a dispute about a debt
  • a dispute of a kind declared by the regulations not to be a scheme dispute.

An occupier of a lot will have more limited access to the Tribunal. It is proposed that an occupier can apply to the Tribunal to resolve a dispute concerning the scheme by-laws, a resolution or decision that directly impacts the occupier or an obligation or right the occupier has.

Enforcing by-laws

Enforcing by-laws has proved to be difficult under the Strata Titles Act 1985. Under the proposed Community Titles Act 2018 the Tribunal will have the power to:

  • make an order imposing a penalty for the breach of any scheme by-law (whether or not that by-law specifies a penalty for breach)
  • make an order that the person who breached the by-law must take action to:
    • stop breaching the by-law
    • fix the breach of the by-law.

The community corporation, owners and occupiers can apply to the Tribunal for an order to enforce a scheme by-law, including an order to pay a penalty.

The Tribunal can order the person who breached a scheme by-law to pay a penalty to the community corporation if it finds:

  • the breach of the by-law is serious
  • the by-law has been breached by that person on three occasions or
  • the community corporation served notice on a person notifying them they have breached a by-law and that person then breaches the same by-law again.

The Tribunal will not be able to order the community corporation to pay a penalty if it is the person in breach of the scheme by-law.

Procedure of the Tribunal

The Tribunal may authorise a member of the community corporation to make an application on behalf of the community corporation if it finds that the community corporation has unreasonably refused to make an application to the Tribunal. In addition, the Tribunal can authorise expenditure up to a specified amount, from funds of the community corporation, to be used for legal advice and legal action for proceedings.

Each member of the community corporation (lot owner or member community corporation), mortgagee of a lot who has given written notice of the mortgagee’s interest to the community corporation and each occupier of a lot, that would be affected by a Tribunal order, is entitled to a copy of the application.

Dismissing an application

The Tribunal may dismiss an application if it is satisfied that:

  • the dispute or the applicant’s interest in the matter is trivial
  • the purpose of the application is to harass or annoy, or to cause delay or detriment, or is otherwise wrongful
  • the nature and gravity of the dispute is such that it is reasonable to expect the parties to resolve the dispute without referral to the Tribunal.

Summary decision

The Tribunal may make a final decision in proceedings at a directions hearing if it considers that appropriate.

Declarations the Tribunal can make

The Tribunal may make a declaration concerning a matter in the proceeding instead of or in addition to any order the Tribunal makes.

Without limitation, the Tribunal will be able to make the following declarations:

  • a specified person has or has not contravened a specified provision, the scheme by-laws
  • a specified scheme by-law is or is not invalid
  • a specified decision or resolution of a community corporation is or is not invalid
  • a specified appointment or election of a member of the council, or an officer of the community corporation is or is not invalid
  • a settlement date for a contract for the sale and purchase of a lot was or was not validly postponed
  • a contract for the sale and purchase of a lot was, or was not, validly avoided.

Only a legally qualified member of the Tribunal can make a declaration.

Orders the Tribunal can make

The Tribunal will be able to make any order it considers appropriate to resolve the scheme dispute or proceeding.

Without limitation, the orders the Tribunal will be able to make include:

  • requiring a scheme document be amended in a specified manner (including an amendment that effects a subdivision)
  • requiring a structural element by reference to which a lot in a community titles (building) scheme is defined to be reinstated following its damage, destruction or removal
  • determining the form and location of utility conduits (pipe, wire, cable or duct) to provide specified utility services subject to a utility service easement
  • requiring an original subdivision owner to pay a specified amount to a community corporation, being the whole or part of the remuneration or benefit that the original subdivision owner failed to disclose to the community corporation
  • determining action that must be taken, or refrained from being taken, by a member of a community corporation to enable the community corporation to obtain required insurance
  • authorising a specified person to convene and preside at a general meeting of a community corporation:
    • as the first annual general meeting or
    • to appoint or elect members of the council or officers of the community corporation or
    • for some other specified purpose
  • authorising a specified person to convene and preside at a meeting of the community corporation:
    • to appoint or elect officers of the community corporation or
    • for some other specified purpose
  • removing a specified person from office as a member of the council of a community corporation or as an officer of a community corporation
  • appointing a specified person as a member of the council or as an officer of a community corporation
  • varying or terminating a strata management contract
  • requiring a scheme manager to pay a specified amount to a community corporation, being the whole or a part of the remuneration or the value of a benefit that the scheme manager failed to disclose to the community corporation
  • requiring a community corporation to take or refrain from taking specified action when performing or exercising its functions, including orders:
    • to sell or acquire real or personal property
    • to enter into, vary or terminate a contract, including a contract for services or amenities to the community corporation or its members
    • to pursue an insurance claim
    • to vary the amount of insurance cover
    • to allow the keeping of an animal on specified conditions or prohibit the keeping of an animal
    • requiring a person to take or refrain from taking specified action, to remedy or prevent  contraventions under the proposed legislation, scheme by-laws or a scheme management contract
    • that the community corporation is taken to have passed / not passed a specified resolution required under the proposed legislation or the scheme by-laws as an ordinary resolution or special resolution
    • requiring a party to pay money as compensation to a person for loss or damage suffered
    • requiring a party to pay money to another party to adjust the position or rights on the termination or variation of a contract under the order
    • requiring a person who is holding a deposit or other moneys in trust to pay the deposit or other moneys to the former buyer
    • appointing an administrator of a community corporation to perform some or all scheme functions.
    • If a Tribunal order is inconsistent with scheme by-laws, the order prevails to the extent of any inconsistency.

Interim orders of the Tribunal

The Tribunal may make an interim order if it is satisfied the urgency is justified. An interim order remains in force for the period specified in the order (not exceeding three months) and may be renewed by further order of the Tribunal for subsequent periods not exceeding three months.

Judicial or legally qualified member

The Tribunal’s power to make an order is exercisable only by a judicial member if the order:

  • affects a title to land
  • is an order confirming a termination resolution
  • is of a class required by the regulations to be made by a judicial member.

The Tribunal’s power to make an order is exercisable only by a legally qualified member (or by the Tribunal constituted of a legally qualified member and other members) if the order is of a class required by the regulations to be made by a legally qualified member.

Limitations on orders

The Tribunal cannot make an order:

  • requiring a community development statement to be amended
  • requiring a change to the schedule of unit entitlements, unless the Tribunal is satisfied that, if unit entitlements were to be allocated at the time of the order, the schedule of unit entitlements would require amendment
  • that the community corporation is taken to have passed a resolution:
    • for termination of the scheme
    • fixing or varying contributions unless satisfied that the contributions fixed by the community corporation are inadequate or excessive
    • fixing or varying the interest rate applicable to contributions unless satisfied that the rate fixed by the community corporation is unreasonable
    • determining arrangements for payment of contributions in instalments unless satisfied that the arrangements allowed by the community corporation are unreasonable
  • that the amount of insurance cover be varied unless satisfied that the amount for which the community corporation has insurance is inadequate or excessive
  • to allow or prohibit the keeping of an animal unless satisfied that the community corporation has acted unreasonably
  • for compensation for personal injury or death
  • for the payment of money to resolve a dispute between a buyer or prospective buyer and the seller of a lot (other than repayment of the deposit to the buyer)
  • make an order in circumstances prohibited under the regulations.

Administrator of community corporation

An order of the Tribunal appointing an administrator of a community corporation may specify conditions, such as:

  • only the administrator may perform a function stipulated under the order
  • the administrator represents the person or body who would have performed the function
  • the Tribunal may vary or revoke the appointment.

An administrator of a community corporation appointed by the Tribunal must make a written record of any action taken and provide it to the community corporation.

Contributions for money payable by community corporation

If the Tribunal makes an order that requires a community corporation to pay money, it may:

  • direct that the money (and any costs) be paid out of contributions be levied in the proportions, specified in the order
  • direct the community corporation to levy contributions in accordance with the order
  • prohibit the community corporation from levying a contribution that would be payable by another party to the dispute.

Enforcement of order to act

If the Tribunal is satisfied that an order to act has not or been only partially complied with by the person to whom the order was given, it may:

  • vary, revoke or substitute the order to act
  • make an order that the person, to whom the order to act was given, pay the applicant money as compensation for the failure to act or refrain from acting.

Internal review of orders or declarations

If in a proceeding the Tribunal is constituted without a judicial member and the Tribunal makes an order or declaration of a kind specified in the regulations, a party to the proceeding may apply for internal review if leave is given by the Tribunal and the application is made within 28 days after the initial order or declaration is made.

An internal review of an order or declaration requires the Tribunal to consist of:

  • a judicial or senior member who is a legally qualified member and
  • other such members as the President of the Tribunal considers appropriate.

On an internal review of an order or declaration, the Tribunal may affirm, vary or set aside the order or declaration and substitute it with another.

Ordering a person to act for lot owner

The Tribunal may make orders where the owner of a lot cannot be located or the owner lacks capacity to vote or consent to a matter to:

  • dispense with the requirement for the owner to vote or consent on a particular matter or
  • authorise the Public Trustee under the Public Trustee Act 1941 or another specified person (with that person’s consent) to exercise all or specified powers of the person as the owner of a lot.

The application may be made by the community corporation or by a person who the Tribunal considers has a proper interest in the matter.

Unpaid contributions will remain with the courts

Any contribution levied for administrative and reserve funds, including interest accrued, may be recovered as a debt by the community corporation in a court of competent jurisdiction.


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Disclaimer

This information has been prepared for the purposes of informing stakeholders and the community on the nature and scope of the proposed reforms to the legislation relating to strata title. Every effort has been made to ensure the information presented is accurate at the time of publication. Because this information avoids the use of legal language, information about the law may have been summarised or expressed in general statements. This information should not be relied upon as a substitute for professional legal advice or reference to the actual or proposed legislation. The contents should not be relied on as a guide for current or future legislation relating to strata title or community title in Western Australia or in relation to current or future subdivision or development proposals, commercial transactions or dealings in strata title.

This page was last updated on: 19 Jul 2018