Dawes v The Owners-Strata Plan No 93087

[2022] NSWCATCD 117

Civil and Administrative Tribunal

New South Wales

Medium Neutral Citation:

Dawes v The Owners-Strata Plan No 93087 [2022] NSWCATCD 117

Hearing dates:

14 December 2021

Date of orders:

10 January 2022

Decision date:

10 January 2022

Jurisdiction:

Consumer and Commercial Division

Before:

G. Sarginson, Senior Member

Decision:

(1) Bright & Duggan Pty Ltd is appointed as the strata managing agent of The Owners-Strata Plan No 93087 to exercise all the functions of the owners corporation and all the functions of the chairperson, secretary, treasurer and strata committee of the owners corporation under s 237 (1) (a) and (2) (a) of the Strata Schemes Management Act 2015 (NSW) for a period of 18 months from the date of the making of this order.

Catchwords:

LAND LAW---Strata scheme---s 237 Strata Schemes Management Act 2015 (NSW)---Appointment of compulsory strata manager---Whether circumstances justify appointment of compulsory strata manager

Legislation Cited:

Civil and Administrative Tribunal Act 2013 (NSW)

Home Building Act 1989 (NSW)

Strata Schemes Management Act 2015 (NSW)

Strata Schemes Regulation 2016 (NSW)

Cases Cited:

Maple v The Owners-Strata Plan No 8950 [2021] NSWCATCD 108

The Owners-Strata Plan No 1813 v Keevers [2021] NSWCATAP 130

The Owners-Strata Plan No 76317 v Ho [2020] NSWCATAP 205

The Owners-Strata Plan No 80412 v Vickery [2021] NSWCATAP 98

The Owners-Strata Plan SP 20211 v Rosenthal; Rosenthal v The Owners-Strata Plan SP 20211 [2018] NSWCATAP 243

Texts Cited:

NCAT Consumer and Commercial Division Guideline ‘Representation’

Category:

Principal judgment

Parties:

L. Dawes; C. Ford; M. Jones; J. Chung; J. Stengos; M. Murphy; M. Wong; B. Bazarragchaa; B. Ganbold; P. Quintal; P. Smith; T. Tran; M. Lin; A. Sudiano; E. Sepitiana; D. Nyugen; H. Nhung; A. Bach; A. Porter; D. Lau; L. Wong; P. Lai; B. Sutas; K. Teabpinyok; J. Gawley; X. Jiang; T. Sondjaja; B.Hyunkyung Joo; C. Chicharncheep. (Applicants)
The Owners-Strata Plan No 93087; Professional Strata Management Group; Y. Lin; S. Chew; X. Bai; T. Chen; H. Han; K. Hu; B. Guo; Z. Zhao; R. Du (Respondents)

Representation:

G. Grasso-Lay Advocate (Applicants)
Counsel:
M. Klooster (First Respondent-The Owners Strata Plan No 93087)
Solicitors:
CJ Boyd Solicitors (First Respondent)

File Number(s):

SC 21/46945

Publication restriction:

Nil

REASONS FOR DECISION

1. This is a dispute involving whether there should be compulsory appointment of a strata manager under s 237 (1) (a) of the Strata Schemes Management Act 2015 (NSW) (‘the SSMA’) to a strata scheme located in a suburb in the inner west of Sydney NSW.

2. Although a number of parties are listed as Applicants and Respondents, the parties that were represented and sought to actively participate in the hearing on 14 December 2021 were Mr Dawes (the First Applicant); and the owners corporation (the First Respondent).

3. In this regard, although the application identified a number of Applicants, a number of such Applicants appear to have been listed by reason of Mr Dawes writing to Lot owners and soliciting them to join the proceedings as co-Applicants prior to the filing of proceedings.

4. A copy of such correspondence was included in the documentary evidence of Mr Dawes. Mr Dawes correspondence makes no reference to the fact that if a person is a party to NCAT proceedings and they are unsuccessful in the proceedings, there is the potential of an adverse costs order subject to the provisions of Sections 60 (1) and (2) of the Civil and Administrative Tribunal Act 2013 (NSW) (‘the NCAT Act’).

5. There are 262 Lots in the strata scheme. The ground floor of the strata building contains a number of commercial Lots. The remainder of the Lots are residential. The building is a high-rise building.

6. The building was completed approximately 6 years ago. In 2018, the owners corporation took proceedings in the NSW Supreme Court against the developer of the strata building, Toplace Pty Ltd, and the builder, in respect of alleged building defects in breach of s 18B of the Home Building Act 1989 (NSW).

7. Bannermans Lawyers act for the owners corporation in the Supreme Court proceedings, but do not act for any party in these proceedings.

8. When the Supreme Court proceedings were commenced, Mr Dawes was the Chairperson of the strata committee of the owners corporation. The Supreme Court proceedings remain ongoing.

9. The alleged serious structural defects in the strata building have drawn media attention; the involvement of NSW Fair Trading; the involvement of the NSW Building Commissioner; and the involvement of NSW Public Works Advisory.

10. From the evidence before the Tribunal in this application, it appears there is a significant difference of opinion regarding the extent and nature of the alleged building defects and how that issue is to be addressed between Lot owners who occupy the strata building; and Lot owners who do not occupy the strata building.

11. The disputation between the two groups also involves special levies that have been raised in past years to pay for costs including repairs to defects; expert reports; and legal costs pertaining to the Supreme Court proceedings. It is also clear from the evidence that some Lot owners regard the publicity surrounding the building as devaluing their investment. Many Lot owners blame Mr Dawes for this state of affairs.

12. On 6 October 2021 there was an Annual General Meeting (AGM) of the owners corporation. The AGM was conducted by video conference.

13. As of 6 October 2021, Mr Dawes was the Chairperson of the owners corporation. Mr Whitney Wang, a licensed strata manager and director of Professional Strata Management Group Pty Ltd (PSMG) was also a strata committee member.

14. Mr Wang’s evidence (which Mr Dawes did not dispute) was that Mr Wang was the Secretary of the strata committee of the owners corporation from 8 October 2019 to 6 October 2021 (a period of two years leading up to the AGM on 6 October 2021).

15. Mr Wang is not a Lot owner of the strata scheme. According to his affidavit of 26 November 2021, Mr Wang attended meetings of the owners corporation for “a number of years” as a nominee of the owner of Lot 64; and was elected as a strata committee member in 2019.

16. Mr Wang asserts that at all relevant times strata committee members were aware that he was a licensed strata manager in his capacity as a director of PSMG.

17. As of 6 October 2021, Strata Choice was the strata manager of the strata scheme.

18. Mr Wang asserts that in 2021 he was “approached” by a Lot owner to submit a “proposal” for PSMG to become the strata manager, because the Lot owner was “dissatisfied” with the management of the strata scheme.

19. Prior to the AGM of 6 October 2021, an Agenda for the meeting was circulated.

20. Of particular relevance to this application is Motion 9 (Appointment of a Strata Managing Agent); and Motion 10 (Election of a Strata Committee).

21. The Agenda for the AGM sets out that there were two options for appointment of a strata manager. Option A was to appoint “Strata Plus.” Option B was to appoint PSMG.

22. The Agenda for the AGM attached a letter dated 26 August 2021 signed by Mr Wang setting out the purported benefits of appointing PSMG as strata manager. The letter refers specifically to Mr Wang’s “17 years’ experience” as a strata manager and Mr Wang’s personal “knowledge of the building” as follows:

I have been actively engaged in many major activities since the formation of the owners corporation such as meeting with local MP pertaining (sic) the easement, attending committee meetings and providing advice and participation in defects claim discussion. I have a sound knowledge of the building. This will be a great benefit to manage the scheme in the best interests of all owners.

23. The Agenda for the AGM attached a 3 page “management proposal” of PSMG. The “management proposal” sets out the management services to be provided. In respect of fees, the “management proposal” states:

PSMG charges a simple-structure flat fee that gives the building management committee a clear indication of their management commitment. Our fee is set out below and payable monthly, other than court attendance, auditing minute books (when required), archive storage is at $20.50 per box per month, project management at cost, and an initial set up fee of $650. We offer a three-year contract which continues thereafter until terminated by either party with ninety days’ notice.

Management Fee

$255.00 plus GST per residential lot per annum (averaging $4.80 plus GST per lot per week). It is a capped investment and includes all administration expenses such as accounting, preparation of levy/meeting notices, stationary, telephone, printing, email and facsimile charges, data entry, correspondence, and annual general meeting.

24. No draft contract with full terms and conditions between the owners corporation and PSMG was attached to the Agenda.

25. The Minutes of the AGM dated 6 October 2021 state that in respect of Motion 9 it was resolved that PSMG was appointed as Strata Managing Agent. The Minutes state that the voting was “Option A: 0; Option B: 54”.

26. In respect of Motion 10 (Election of Strata Committee) the Minutes of the AGM state that there were 17 persons who nominated for election. Neither Mr Dawes nor Mr Wang had nominated for re-election.

27. According to Mr Wang, he did not nominate because he could not do so by reason of PSMG proposing to be appointed as strata manager.

28. Mr Wang asserts in his evidence that Mr Dawes “resigned as Chairperson” at the AGM on 6 October 2021. However, the Minutes of the meeting make no reference to Mr Dawes resigning as Chairperson, nor is there any written document in evidence to support Mr Wang’s assertion that Mr Dawes “resigned as Chairperson” before, during, or after the AGM on 6 October 2021.

29. Mr Dawes denies that he resigned as Chairperson of the strata committee before, during, or after the AGM on 6 October 2021. Rather, he asserts that he said that he would not stand for re-election to the strata committee rather than that he was resigning from the strata committee. He asserts that he remained as Chairperson of the strata committee until the point in time that a valid meeting was called and a valid vote taken to elect a new strata committee.

30. In respect of Motion 10 (Election of Strata Committee) the Minutes of the AGM set out the 17 persons who nominated for election to the strata committee. The Motion was deferred. Relevantly, the Minutes state as follows:

Note: The meeting agreed that the confirmation of the number of members to be elected, and the election of the Strata Committee members be DEFERRED. This was due to the meeting taking place via Video Conference and it not being possible to conduct a ballot in accordance with the Strata Schemes Management Regulation 2016. Once a physical General Meeting can take place, a ballot will be conducted to elect the Strata Committee, the incoming Strata Managing Agent is to attend to this.

It was noted and recorded that no party present objected to this motion being DEFERRED.

31. On 10 October 2021, Rothshire Pty Ltd issued a three page report stating that there were significant structural defects in the strata building, particularly if there was an earthquake. Rothshire Pty Ltd recommended that “back propping” of “highly affected areas” be performed as a matter of urgency.

32. On 13 October 2021, after a request from the NSW Building Commissioner, NSW Public Works Advisory, conducted an inspection of the strata building by reason of concerns raised that the building was an immediate safety risk due to structural defects.

33. The structural engineer engaged by the owners corporation (Rothshire Pty Ltd) and the structural engineer engaged by the developer (TTW) attended that site inspection. A report was issued by NSW Public Works Advisory. Immediate evacuation was not recommended. Works to common property, including a monitoring program for cracking and deflection in structural elements of the building, was recommended.

34. On about 16 October 2021, Mr Wang provided a Strata Managing Agency Agreement on behalf of PSMG. It is unclear from Mr Wang’ evidence as to who he produced this agreement. His evidence did not state that he circulated the agreement to all existing strata committee members, nor to all Lot owners.

35. His evidence was that due to things “moving very quickly” including “Covid lock downs” and “the transition from Strata Choice to PSMG” Mr Wang obtained a signature from Mr Kai (James) Hua, a member of the strata committee on the strata managing agency agreement and signed the strata managing agency agreement on behalf PSMG and also on behalf of the strata committee.

36. The managing agency agreement signed on or about 16 October 2021 did not have the signatures of two strata committee members, nor was the seal of the owners corporation applied to the document.

37. According to Mr Wang, this was an innocent ‘oversight.’

38. On 18 October 2021, Mr Kameas of Rothshire Pty Ltd sent an email to strata committee members and Mr Wang which attached the report of NSW Public Works Advisory. That email states as follows:

Dear Owners,

Please find attached letter issued by Public Works Advisory.

Note, the risk of collapse due to natural disaster (earthquake) exists, the letter also sets out that the building outside of natural disaster or accidental damage has a low risk of collapse and therefore evacuation at this point is not required.

The letter also urges that immediate monitoring of the building commence next week.

Furthermore, the serious structural issues are referred to as per my report, and there must be urgent regard to remediation and further investigation of structural issues.

I am available to discuss the content of the letter in due course. I recommend that a meeting is urgently held.

39. On 22 October 2021, PSMG sent to Lot owners by email a Notice of Extraordinary General Meeting (EGM) to be held at the common property area near the office of the building manager of the strata scheme on 11 November 2021.

40. The Notice for the EGM was signed by Mr Wang as “strata manager.” No member of the strata committee signed the Notice of EGM.

41. The Notice for the EGM on 11 November 2021 contained two Motions. The first was to confirm the Minutes of the AGM on 6 October 2021, subject to two corrections. The second was to determine the number of strata committee members and to elect a strata committee. The Notice of EGM identified 20 persons who had nominated to be elected to the strata committee.

42. The affidavit of Mr Wang dated 26 November 2021 contains 4 emails to him (with one of those emails copied to Mr Dawes) from Lot owners stating that they “remembered” Mr Dawes had resigned as Chairperson of the strata committee at the AGM on 6 October 2021 and that Mr Wang should take action to stop Mr Dawes from acting as the Chairperson of the strata committee.

43. In the period leading to the EGM on 11 November 2021 there had been an investigation by NSW Fair Trading into the conduct of Strata Choice and PSMG into the transfer of strata managing agent services from Strata Choice to PSMG.

44. According to a statement of Mr McIntyre, managing inspector of the Investigations and Enforcement Division of NSW Fair Trading dated 6 December 2021, Mr McIntyre contacted Mr Dawes as a result of Mr Whitton, of NSW Fair Trading’s Consumer Building and Property Division, referring the matter to Mr McIntyre. Mr McIntyre’s statement was contained in the documentary evidence of Mr Dawes.

45. According to the statement of Mr McIntyre, he attended the offices of PSMG on 4 November 2021 and spoke to Mr Wang.

46. Mr McIntyre told Mr Wang that the purported strata managing agency agreement needed to have the signatures of two strata committee members and said: “You cannot sign on behalf of the strata plan as there is a serious conflict of interests.” Mr McIntyre told Mr Wang that the strata managing agency agreement must be signed by at least two strata committee members, and that Mr Wang should not do anything as strata manager until there was a validly signed agreement in place. Mr Wang said that he had resigned from the strata committee.

47. On 8 November 2021, Mr McIntyre sent Mr Wang an email that relevantly stated as follows:

A closer look at your strata management agreement (sic). It is invalid as you have signed as the Strata Management Company and the Secretary of the SP.

As discussed on Thursday you should have resigned from the committee and as nominee for Lot 64 and stood out of the meeting while the vote was taken.

You need to allow the current committee an opportunity to review your management agreement and seek two signatures from the members of the strata plan.

As for the vote for the committed (sic) it is questionable how many lot-holders will be financial and eligible to vote.

As you have any invalid agreement it is questionable if you can call the meeting or invoice for levies.

You also need to address and co-ordinate access to 1601 between the owner and Toplace.

Where are all the strata documents relating to the management of the strata and the complete strata roll. (sic)

If you cannot show me that you have actually contacted all the owner (sic) for the forthcoming EGM, it should be postponed to negate its validity in NCAT (sic).

Please contact me ASAP.

48. On 9 November 2021, Mr Wang arranged for the managing agency agreement of PSMG to be signed by Mr Hu and Mr Bai, who were strata committee members as of the AGM on 6 October 2021. The seal of the owners corporation was applied to the managing agency agreement.

49. According to the evidence of Mr Wang, he has “not heard anything further” from NSW Fair Trading regarding its investigation. The statement of Mr McIntyre dated 6 December 2021 states that the investigation is ongoing and all parties will be advised of the outcome in due course.

50. The EGM on 11 November 2021 took place, although what actually transpired is the subject of disputation between the parties and the various Lot owners who have provided statements in the proceedings.

51. What is abundantly clear is that there was a high degree of animosity, and police were called to the meeting.

52. Persons present at the meeting made recordings on their telephone of what occurred. Both parties provided video and sound recordings of the meeting (or parts of the meeting) to support their respective cases.

53. Mr Wang, in his affidavits of 26 November 2021 and 13 December 2021, does not set out his version of events in any detail as to what occurred at the EGM on 11 November 2021.

54. Rather, in his affidavit of 13 December 2021, Mr Wang simply asserts that he disagreed with and rejected the “assertions” as to what happened at the EGM in the “statements of interested parties aligned with the Applicants” as to the conduct of the EGM. The affidavit of Mr Wang then annexes 4 videos on a USB of the meeting.

55. Mr Wang asserts that he collected ballots at “the conclusion of the video” and states as follows:

I confirm that at or around the conclusion of the video, I held the ballots collected from the meeting. Copies of those ballot papers, as well as my table of calculations of the votes, are located at Annexure B.

In large strata schemes with hundreds of lot owners, it is not practicable to calculate the ballot numbers during the meeting and it is normal practice for the ballots to be counted later and the outcome recorded in the minutes of the meeting.

That is the procedure I followed, the ballot papers are always kept on file, so that they can be reviewed at any time.

I note that out of the 124 valid votes recorded in attendance of the AGM, 90 submitted ballots.

I observed that Mr Dawes and his associates did not submit their ballots, including their proxies (of which Mr Dawes alone had some 15).

Why they chose to do so is not known to me but this explains the shortfall in the ballot numbers against the available votes, with the un-cast votes constituting abstentions.

56. The first respondent’s written submissions dated 13 December 2021 asserts at pp 10-13 that the Tribunal should view the videos relied upon by the first respondent and make factual findings about what occurred at the meeting. The videos relied upon by each party were not played at the hearing, but there was some cross examination of Mr Wang and Mr Dawes as to what occurred. Mr Wang and Mr Dawes each claimed that the other was responsible for the animosity at the meeting.

56. All parties requested the Tribunal view the videos taken of the meeting, which they asserted supported their version of events.

57. Although the affidavits of Mr Wang dated 26 November 2021 and 13 December 2021 contain some emails of Lot owners that make brief reference to the events at the EGM; and a “petition” signed by a number of Lot owners that complains about the conduct of Mr Dawes whilst he was Chairperson of the strata committee; no statements or affidavits were provided on behalf of the respondents by persons who attended the meeting stating what had occurred.

58. The only witness sought to be cross examined at the hearing on 14 December 2021 by the first respondent was Mr Dawes.

59. The documentary evidence of the applicants contained a number of statements of persons who attended the EGM on 11 November 2021 including Ms Ford (the partner of Mr Dawes); Mr Quintal; Ms Stengos; Mr Fahd; and Mr Turkic. Those statements vary in detail about the events at the meeting (the statements of Ms Ford and Mr Quintal being the most detailed in addition to the statement of Mr Dawes).

60. In respect of the events at the EGM on 11 November 2021, the different version of events is summarised as follows:

Applicants

1. Approximately 40-50 people attended the meeting.

2. Mr Dawes and Mr Wang argued as to who would Chair the meeting. Mr Dawes asserted he had a right to Chair the meeting and declared the meeting open.

3. PSGM staff were ‘coaching’ or ‘advising’ Lot owners in attendance for whom to vote. Mr Dawes, Ms Ford and Mr Quintal told them to refrain from such conduct. Mr Dawes was sworn at by an employee of PSGM.

4. Mr Wang accused Mr Dawes of costing the owners corporation over $40,000 and asserted that he had engaged a ‘defamation lawyer’ in respect of Mr Dawes comments towards him.

5. Mr Wang continued to assert he was the valid Chairperson of the meeting.

6. Mr Dawes gained some control over the meeting and told the persons in attendance that he regarded the meeting as invalid due to the previous conduct of Mr Wang.

7. Due to the degree of anger and discontent in the room, Mr Dawes told Mr Quintal to call the police.

8. Police arrived. Mr Dawes had a discussion with the police. While this was occurring, PSMG staff were collecting ballots.

9. Mr Dawes told the meeting that it was “closed” and Police spoke to the meeting.

10. After the meeting was “closed” by Mr Dawes, many Lot owners left.

11. Mr Wang then ‘continued’ the meeting or held a ‘second meeting.’ Mr Wang explained the Motions to be voted on. Ballot papers were collected. No votes were counted, with Mr Wang stating that he would do so later.

12. Police spoke briefly to Mr Wang. The meeting then ended. Mr Wang and his staff left.

First Respondent

62. The first respondent’s version of events (on the basis of what was depicted in the videos it relied upon) was:

1. Mr Dawes acted as Chairperson at the meeting, despite telling the persons who attended the meeting it was invalid.

2. Mr Dawes acted deliberately to prevent there being a vote taken at the meeting and spoke on the telephone during the meeting to the lay advocate who appeared for him at the hearing, Mr Grasso.

3. Mr Dawes and his supporters “hijacked” the meeting because they realised that they were going to lose control of the strata committee.

4. Mr Dawes “deceived” the meeting that he was allowed to Chair the meeting. Mr Dawes told the meeting that a vote would take place, and then subsequently told the meeting no vote would take place.

5. The majority of persons at the meeting told Mr Dawes they did not want him to Chair the meeting.

6. Mr Wang ensured that persons present signed in and a quorum was formed.

7. Mr Wang read out to the meeting who was present and announced proxies.

8. Mr Wang and PSMG staff collected retained and tabulated ballots.

63. After the EGM on 11 November 2021, both PSMG and Mr Dawes issued their own “Minutes” of the meeting.

64. The Minutes of the EGM prepared by PSMG relevantly state as follows:

1. The meeting commenced at 7.15 pm. Mr Dawes was the “Chairman” and Mr Wang was the “co-chair.”

2. The persons in attendance and the proxies. The Minutes state that proxies held by Mr Dawes; Ms Stengos; Mr Fahd; and Mr Lozada were “invalid” due to reasons identified as either “absence of nominee on the strata roll and incomplete company nominee form” and “due to incomplete proxy form.”

3. The Minutes identify that “The Chairman” ruled that a quorum was established, and go on to deal with the two Motions as follows:

Motion 1. Confirmation of Minutes

That the minutes of the last general meeting held on 06/10/2021 be confirmed.

Notes: The minutes was (sic) issued in error subject to correction:

1. Lot 91 and 238 was (sic) present at the last meeting but was not recorded as an attendee in person.

2. Lot 8, 54, 74 and 237 were nominated as Strata Committee prior to the last meeting but were not recorded in minutes.

Motion 2. Election of Strata Committee

That the number of Strata Committee members are determined to be nine. It was resolved that the Committee members listed below be elected and would act as the duly elected Strata Committee of the Owners Corporation until the next annual general meeting.

(names of the nine persons and who they were nominated by)

Note:

1. This meeting was held according to the Note in Motion 10 of the AGM on 06/10/2021.

2. PSMG has been appointed at the AGM and the appointment has been completed.

3. W. Wang was requested to co-chair the meeting by the majority of owners at the meeting. Meeting proceeded and resolution passed as above.

There being no further business the meeting closed at 7.59 pm.

65. The Minutes of the EGM dated 11 November 2021 prepared by PSMG that were in evidence do not contain any signature of the Chairperson of the meeting.

66. The Minutes of the EGM dated 11 November 2021 prepared by Mr Dawes assert that he was the Chairperson of the meeting, and that the Chairperson ruled that a quorum had been reached. His Minutes assert that at the commencement of the meeting he explained that PSMG “was not the strata manager” as (a) no strata managing agency agreement had been provided to the owners corporation prior to the AGM on 6 October 2021; and (b) Mr Wang had inappropriately signed the agreement on behalf of both the owners corporation and PSMG. Other alleged deficiencies of PSMG were listed.

67. Mr Dawes version of the Minutes asserted that Mr Wang was disruptive and refused to acknowledge Mr Dawes was the Chairperson of the meeting. It asserts that because of the disruption, Police were called and Mr Dawes “declared the meeting closed.” “Numerous owners” then “left the meeting” and the owners who stayed became agitated due to the conduct of Mr Wang. Police arrived at 7.33 pm. Mr Wang then “commenced and chaired a second meeting.” Mr Dawes again declared the meeting closed and “repeatedly advised” Mr Wang to “cease what he was doing.” PSMG staff “walked around and collected voting ballots” and Mr Wang stated the ballots would be counted after the meeting because it was too late.

68. According to Mr Dawes version of the Minutes, “all motions (sic) were deferred; the meeting was declared invalid and was adjourned to a date to be fixed.” Mr Dawes version of the Minutes assert that the “first valid meeting closed at 7.22 pm” and “second valid meeting closed at 7.59 pm.”

69. On 15 November 2021 PSMG issued a Notice of Strata Committee meeting, which was scheduled for 19 November 2019 by video conference. 9 Motions were listed. Motion 4 was to appoint a Chairperson, Secretary and Treasurer of the strata committee. Motion 6 was to “provide update on defects claim and make determination on methods to employ for forthcoming actions”. Motion 8 was to decide whether or not to appeal an NCAT decision “in relation to unit 1601”. That decision was in Matter SC 21/37493, where a Lot owner (Mr Smith, who gave a statement in the proceedings for the applicants) obtained orders from Wilson SM for common property repairs due to water ingress and a payment of damages for consequential loss by reason of the owners corporation breaching its duty under s 106 of the SSMA.

70. The documents of the respondent filed on 13 December 2021 do not include a copy of the Minutes of that meeting, and it is unclear to the Tribunal as to what decisions were made at that meeting.

71. In November 2021, Rothshire Pty Ltd sought payment of outstanding invoices.

72. On 24 November 2021, Mr Wang sent an email to Rothshire Pty Ltd stating that Rothshire Pty Ltd’s invoices had been sent to the strata committee for approval and payment would be made when approval was received. The email stated the strata committee sought “clarity” on the following issues:

1. What authorisation does Rothshire have for continuing the current works?

2. If there is an existing fee proposal, please provide a copy.

What are the remainder of the works/inspection/reports that Rothshire is to complete?

73. On 26 November 2021, Mr Wang sent an email to strata committee members clarifying the “capped fees” PSMG would charge and that there was no difference in this regard between the PSMG “proposal” that was put before the AGM on 6 October 2021 and the terms and conditions of the managing agency agreement. The email states: “The items listed in the agreement are standard, only become applicable (sic) when required as additional service (sic) and in (sic) many occasions, to lot owners (sic); instead of the owners corporation, such as debt collection and reissue of levy notices etc.” The email states that strata committee members should “read the agreement in conjunction (sic) of the Management Proposal” and “Please advise should you require further.”

74. On 30 November 2021, Ms Roberts-Thomson of Rothshire Pty Ltd responded to the email of 24 November 2021 as follows:

1. Rothshire’s engagement is as the owners expert engineering (sic) in ongoing proceedings;

2. The existing fee proposal include terms and conditions is provided by the attached document;

3. Any ongoing works are relevant to the proceedings and include responding to TTW report, obligations for building monitoring/remediation that have arisen from proceedings including the NSW government review and under legal instruction.

A letter will be issued tomorrow regarding TTW report and NSW government review.

75. The reference in the email to “TTW report” is a reference to the report of the expert engineer engaged by the developer Toplace Pty Ltd in the Supreme Court proceedings.

76. On 7 December 2021, Mr O’Leary, financial controller of Rothshire Pty Ltd wrote the owners corporation as follows:

I refer to the above matter and our invoices dating back to September 2020.

I note that our office has followed up the previous strata management company contact (name) via email and via telephone calls on numerous occasions.

As Strata Choice are no longer the strata manager and these outstanding invoices were never attended to, once Professional Strata Management Group were appointed we emailed theses outstanding invoices together with a statement to Whitney on 9 November 2021 and have made several attempts to follow up via email.

The last payment made to us was on 3 September 2021 for only $5,005.

We attach a statement of all our outstanding invoices totalling $310,096.06 together with a copy of each invoice.

Rothshire is now in a position where unfortunately no further work can be carried out until we have some indication of payment or an agreement of payment is set out.

If you have any queries, please do not hesitate to contact me.

77. The letter of Rothshire Pty Ltd dated 7 December 2021 contained a statement of account, identifying 7 unpaid invoices dating between 10 September 2020 and 26 November 2021. The largest two unpaid invoices were 29 September 2021 (Invoice 0087-$82,331.43); and 27 October 2021 (Invoice 0138-$159,571.50). As set out in the letter, the total amount unpaid was $310,096.06.

78. On 9 December 2021, PSMG emailed Rothshire Pty Ltd as follows:

Dear Paul and Alex,

The Owners Corporation has requested for more details on the build up of cost for invoice 0087 and 0138.

79. The evidence of Mr Wang did not state what measures the strata committee or owners corporation proposed to take in regards to payment of the Rothshire Pty Ltd invoices. No evidence was provided by any strata committee member purportedly elected at the EGM on 11 November 2021 in regard to this, or any other, issue. However, in submissions the first respondent submitted that because of the size of the invoices the owners corporation was acting prudently by requesting particulars of the work done and charged for by Rothshire Pty Ltd before determining whether or not to pay.

TRIBUNAL PROCEEDINGS

80. The applicants filed proceedings in the Tribunal on 15 November 2021. Two sets of proceedings were filed. Matter SC 21/46947 was an application for interim (urgent) orders under s 231 of the SSMA. Matter SC 21/46947 was the application for substantive orders.

81. On 3 December 2021, the proceedings were listed in the Tribunal before Ellis SC SM. The application for interim orders was listed for hearing; and the substantive proceedings were listed for directions, as is the usual practice in the Consumer and Commercial Division of the Tribunal involving strata disputes where an application for interim orders has been made.

82. Prior to 3 December 2021, Rosser PM had made directions ‘on the papers’ for the parties to file and serve documentary evidence in respect of the hearing for the application for interim orders.

83. Ellis SC SM dismissed the application for interim orders in Matter SC 21/46947 because he determined that it was appropriate to list the substantive proceedings for an expedited hearing.

84. The procedural directions made by Ellis SC SM included that all parties were granted leave to be legally represented; and a short timeframe for the parties to file and serve any documentary evidence in addition to the evidence that had been filed and served in the application for interim orders.

85. The matter was listed for hearing at the Tribunal on 14 December 2021.

86. The hearing was conducted by audio-visual link.

87. Mr Grasso, a non-lawyer self-described “lay advocate” appeared for the applicants. Mr Klooster of Counsel appeared for the first respondent, but not the other respondents (being PSMG and members of the strata committee elected at the EGM on 11 November 2021). Mr Grasso and Mr Klooster of Counsel has also appeared on 3 December 2021 before Ellis SC SM.

88. At the outset of the hearing, the first respondent opposed Mr Grasso being granted leave to represent the applicants in the proceedings as he was not an admitted Australian Legal Practitioner and there was no appropriate reason Mr Dawes could not represent himself and the other applicants.

89. Mr Grasso submitted that he was an experienced “lay advocate” having appeared in various Tribunals, including at least one proceedings in NCAT. He asserted that he had prepared the documents and submissions on behalf of the applicants, and they would be disadvantaged if he were not granted leave to represent them. Mr Grasso stated that he could assist the Tribunal in respect of the just, quick and cheap resolution of the real issues in the proceedings more effectively than Mr Dawes.

90. Mr Dawes stated that he had engaged Mr Grasso as Mr Grasso was far less expensive than a lawyer and would be disadvantaged if Mr Grasso could not represent him at the hearing due to the work and advice Mr Grasso had provided.

91. The Tribunal determined that it was appropriate to grant leave to Mr Grasso to represent the applicants in the proceedings under s 45 of the NCAT Act having regard to the relevant matters set out in the NCAT Consumer and Commercial Division Guideline ‘Representation’ dated August 2019 (published on the NCAT website).

92. In particular, the Tribunal had regard to the fact that the first respondent was represented by Counsel and an instructing Solicitor and that refusal for leave to be granted may cause disadvantage to the applicants in presenting their case at short notice (para 11 (b) and (e) of the Guideline). Further, if the applicants were refused leave it may lead to the adjournment of the hearing so that Mr Dawes could prepare for the hearing, which would defeat the purpose of the matter having been listed for an expedited hearing.

93. In granting Mr Grasso leave to represent the applicants at the hearing on 14 December 2021, the Tribunal does not express any view about the purported skill and expertise of Mr Grasso, or whether he should be granted leave to appear in any future or other NCAT proceedings.

94. At the hearing on 14 December 2021, Mr Dawes and Mr Wang gave evidence and were cross examined. No other witnesses gave evidence at the hearing. The hearing concluded with oral submissions of the parties.

DOCUMENTARY EVIDENCE OF THE PARTIES

95. The Tribunal made clear during the hearing that any documents relied upon by parties was admitted into evidence subject to weight and relevance.

Applicants

96. The documents relied upon by the applicants and admitted into evidence were:

1. A folder of documents dated 8 December 2021 (which included documents that had been filed on 22 November 2021). This folder of documents included witness statements and a recording of the EGM on 11 November 2021 that the applicants relied on.

2. A three page report of Rothshire Pty Ltd dated 10 October 2021. That report was filed and served late, but the first respondent did not object to the Tribunal granting the applicant leave to rely on the document as the first respondent was able to meet the document and it did not cause any unfair disadvantage to the first respondent.

3. Included in the applicants’ documents was a letter from a licensed strata manager Bright & Duggan stating that they consented to being appointed as a compulsory strata manager; a copy of the terms and conditions of Bright & Duggan; and a copy of the license of Bright & Duggan.

Respondents

97. The documents admitted into evidence and relied on by the respondents were a folder of documents filed on 13 December 2021. Such documents included affidavits of Mr Wang dated 26 November 2021 and 13 December 2021.

98. The documents also included the USB recording of the EGM dated 11 November 2021 that the respondents relied upon; and written submissions.

CONSIDERATION

99. Section 237 of the SSMA states as follows:

237   Orders for appointment of strata managing agent

(1) Order appointing or requiring the appointment of strata managing agent to exercise functions of owners corporation The Tribunal may, on its own motion or on application, make an order appointing a person as a strata managing agent or requiring an owners corporation to appoint a person as a strata managing agent—

(a)  to exercise all the functions of an owners corporation, or

(b)  to exercise specified functions of an owners corporation, or

(c)  to exercise all the functions other than specified functions of an owners corporation.

(2) Order may confer other functions on strata managing agent The Tribunal may also, when making an order under this section, order that the strata managing agent is to have and may exercise—

(a)  all the functions of the chairperson, secretary, treasurer or strata committee of the owners corporation, or

(b)  specified functions of the chairperson, secretary, treasurer or strata committee of the owners corporation, or

(c)  all the functions of the chairperson, secretary, treasurer or strata committee of the owners corporation other than specified functions.

(3) Circumstances in which order may be made The Tribunal may make an order only if satisfied that—

(a)  the management of a strata scheme the subject of an application for an order under this Act or an appeal to the Tribunal is not functioning or is not functioning satisfactorily, or

(b)  an owners corporation has failed to comply with a requirement imposed on the owners corporation by an order made under this Act, or

(c)  an owners corporation has failed to perform one or more of its duties, or

(d)  an owners corporation owes a judgment debt.

(4) Qualifications of person appointed A person appointed as a strata managing agent as a consequence of an order made by the Tribunal must—

(a)  hold a strata managing agent’s licence issued under the Property and Stock Agents Act 2002, and

(b)  have consented in writing to the appointment, which consent, in the case of a strata managing agent that is a corporation, may be given by the Secretary or other officer of the corporation or another person authorised by the corporation to do so.

(5) Terms and conditions of appointment A strata managing agent may be appointed as a consequence of an order under this section on the terms and conditions (including terms and conditions relating to remuneration by the owners corporation and the duration of appointment) specified in the order making or directing the appointment.

(6) Return of documents and other records A strata managing agent appointed as a consequence of an order under this section must cause a general meeting of the owners corporation to be held not later than 14 days before the end of the agent’s appointment and must on or before that meeting make arrangements to return to the owners corporation all documents and other records of the owners corporation held by the agent.

(7) Revocation of certain appointments An order may be revoked or varied on application and, unless sooner revoked, ceases to have effect at the expiration of the period after its making (not exceeding 2 years) that is specified in the order.

(8) Persons who may make an application The following persons may make an application under this section—

(a)  a person who obtained an order under this Act that imposed a duty on the owners corporation or on the strata committee or an officer of the owners corporation and that has not been complied with,

(b)  a person having an estate or interest in a lot in the strata scheme concerned or, in the case of a leasehold strata scheme, in a lease of a lot in the scheme,

(c)  the authority having the benefit of a positive covenant that imposes a duty on the owners corporation,

(d)  a judgment creditor to whom the owners corporation owes a judgment debt.

100. At the hearing, Mr Grasso made a submission that the Tribunal should appoint a compulsory strata manager on a limited basis under s 237 (1) (c) of the SSMA. However, when the Tribunal pointed out that such an appointment may be impracticable and fuel conflict rather than achieve stable management of a purportedly dysfunctional strata scheme, that submission was abandoned and the sole order sought in the proceedings was compulsory appointment under s 237 (1) (a) of the SSMA. The applicants sought a period of compulsory appointment for 2 years.

101. No orders were sought in the proceedings that any resolutions passed at meetings of the owners corporation be invalidated or declared a nullity under ss 24 and 25 of the SSMA. The sole issue for consideration is whether there should be compulsory appointment of a strata manager (and if so, for how long).

Applicable Legal Principles Regarding Compulsory Appointment

102. The applicable principles for appointment of a compulsory strata manager were summarized in Maple v The Owners-Strata Plan No 8950 [2021] NSWCATCD 108 as follows at [18]-[22]:

The principles regarding whether or not a compulsory strata manager should be appointed are well established. In Hoare and Ors v The Owners-Strata Plan No 73905 [2018] NSWCATCD 45 the Tribunal stated at [199]-[200]:

Appointment of a compulsory strata manager is a serious measure not to be taken lightly, because it removes the democratic process that has been established under the SSMA 2015 for the owners corporation to govern itself. In essence, it places the owners corporation into the hands of an administrator for a period of time.

In respect of s 237 (3) (a) of the SSMA 2015, the Appeal Panel of the Tribunal stated in Bischoff v Sahade [2015] NSWCATAP 135 (‘Bischoff’) at [22]:

“Circumstances in which the management structure may not be functioning or functioning satisfactorily include where the relevant level of management:

(1) does not perform a required function, for example to properly maintain the common property;

(2) exercises a power or makes a decision for an improper purpose, for example conferring a benefit upon a particular Lot owner or group of Lot owners in a manner not authorised by the SSMA;

(3) fails to exercise a power or make a decision to prevent a contravention by Lot owners and occupiers of their obligations under the SSMA, including the Lot owners and occupiers obligation to comply with the by-laws; and

(4) raises levies and takes or defends legal action on behalf of the owners corporation in circumstances where such action is unnecessary or not in the interests of the owners Corporation or the Lot owners as a whole”

The Tribunal must be satisfied, based on sufficient evidence, that one or more of the matters set out in s 237 (3) (a)-(d) has occurred, and, if so, there are appropriate discretionary reasons for the appointment of a compulsory strata manager. The exercise of that discretion must take into account the fact that appointment of a compulsory strata manager is a serious matter.

An applicant may, for example, provide sufficient objective evidence to satisfy the Tribunal that one of the matters set out in s 237 (3) (a)-(d) has occurred, but fail to satisfy the Tribunal that the nature or duration of the actions or inactions of the owners corporation (or the level of dysfunctionality) does not justify the appointment of a compulsory strata manager.

Further, a relevant matter is whether, despite past inadequacies of the management of the owners corporation that involve failure to comply with obligations under the SSMA and/or the Strata Schemes Regulation 2015 (NSW) there has been a recent change in behaviour involving compliance, such as the recent election of a new strata committee that has adopted an approach that accords with ensuring the owners corporation complies with its obligations; and whether any previous “dysfunctionality” has improved.

The applicant bears the onus of establishing that a compulsory strata manager should be appointed. The Tribunal focusses upon the objective evidence. It is axiomatic that a Lot owner who is making an application for compulsory appointment of a strata manager is subjectively dissatisfied with the current management of the owners corporation. However the matters set out in s 237 (3) of the SSMA and the discretionary considerations as to whether a compulsory strata manager should be appointed are not established merely because of the subjective belief of a Lot owner that management of the owners corporation is, or has been, inadequate.

103. In The Owners-Strata Plan No 76317 v Ho [2020] NSWCATAP 205 the Appeal Panel stated at [26]-[28]:

It is clear from the Decision that the Tribunal considered the individual failings of the Owners Corporation and of (the strata manager) in the aggregate and concluded that, when taken together, the breaches were of the kind which justified the finding that they were serious and affected the proper functioning of management of the strata scheme in a way that was deleterious to the interests of all lot owners. Some of the findings taken on their own would not, in our view, have justified the appointment of the compulsory manager but the Tribunal correctly, in our view, considered the failures together.

The essential findings made by the Tribunal were contained in paragraph [92] of the Decision, namely that the management of the strata scheme was “not functioning satisfactorily” and in paragraph [93], that the Owners Corporation has failed to perform one or more of its duties. It is clear that these conclusions follow from the findings of fact summarised in paragraph [94] of the Decision.

The Appellants submitted that the Respondents (i.e. the Applicants at first instance) represented only a very small minority and that the vast majority of lot owners were content with the outcome of the AGM. In our view each lot owner is entitled to expect that the provisions of the SSM Act will be complied with, particularly those terms which require the Owners Corporation to ensure that each lot owner has notice of an AGM and that the AGM is conducted with a quorum being present. The fact that it may have been reasonably likely that had the calling of the meeting and its conduct fully complied with obligations under the SSM Act, the resolutions passed would have been identical to those which were allegedly passed in this case does not excuse the Owners Corporation. Each lot owner is entitled to expect reasonable compliance by the Owners Corporation, the strata committee and the strata manager.

104. When determining whether there should be compulsory appointment, the Tribunal must be satisfied of at least one of the matters in s 237 (3) of the SSMA.

105. However, deciding whether or not to appoint a compulsory manager depends upon the nature and extent of the matters under s 237 (3) of the SSMA. Appointment of a compulsory manager may not be appropriate if the only relevant matters were a relatively minor failure to repair common property under s 106 of the SSMA; and taking out strata insurance for a 6 month policy period rather than a 12 month period (The Owners-Strata Plan No 1813 v Keevers [2021] NSWCATAP 130 at [253]-[256]).

The Circumstances Leading to the EGM on 11 November 2021

The Absence of Terms and Conditions of PSMG Being Provided to the AGM On 6 October 2021

106. One of the applicants’ submissions is that there was a discrepancy regarding the fee structure in the terms and conditions of PSMG which were formally signed by two strata committee members on 9 November 2021 and the “proposal” that was attached to the Agenda for the AGM on 6 October 2021.

107. The first respondent and Mr Wang deny that there was an material discrepancy, nor that it was a stipulation of the SSMA or the Strata Schemes Regulation 2016 (NSW) (‘the SSM Regulation’) that the terms and conditions needed to be circulated prior to the AGM on 6 October 2021.

108. However, of greater significance is the manner in which the strata managing agency agreement was executed, and the calling of the EGM on 11 November 2021 to elect the strata committee.

109. The Tribunal is satisfied that Mr Dawes did not resign as Chairperson of the strata committee on 6 October 2021, or in the period between 6 October 2021 to 11 November 2021. The election of the strata committee was deferred at the AGM on 6 October 2021. The Tribunal accepts the evidence of Mr Dawes that he did not resign. There is no documentary evidence to indicate he did resign. The Minutes of the EGM on 11 November 2021 prepared by PSMG clearly refer to Mr Dawes as “Chairperson”.

110. Section 35 of the SSMA set out the circumstances in which a person ceases to be a strata committee member. Section 35 of the SSMA states as follows:

35   Vacation of office of elected member of strata committee

(1)  An elected member of a strata committee vacates office as a member—

(a)  if the person was eligible to be a member at the time of election and the person ceases to be so eligible (other than because the person is an unfinancial owner), or

(b)  if the person was not an owner at the time of election or was a company nominee and the individual who nominated the person for election or the corporation for which the person is a company nominee ceases to be an owner or gives written notice to the owners corporation that the person’s office is vacated, or

(c)  on the receipt by the owners corporation from the person of notice in writing of the person’s resignation as a member, or

(d)  at the end of the next meeting at which a new strata committee is elected by the owners corporation, or

(e)  if the owners corporation, in accordance with a special resolution, determines that the person’s office as a member is vacated, or

(f)  if the person dies.

(2)  A strata committee may appoint a person eligible for election as a member to fill a vacancy in the office of a member of the strata committee, other than a vacancy arising under subsection (1) (d) or a vacancy in the office of an officer of the owners corporation. Any person so appointed holds office, subject to this section, for the balance of his or her predecessor’s term of office.

Note—

Section 45 (2) provides for the filling of vacancies in the office of members who are officers of the owners corporation.

(3)  A special resolution that determines that the office of a member is vacated may relate to more than one member of a strata committee or to all members of a strata committee.

111. Other than Mr Wang (who from his own evidence resigned as a strata committee member on 6 October 2021), the strata committee remained unchanged between 6 October 2021 and 11 November 2021 because no new strata committee had been elected. By reason of s 35 (1) (d) of the SSMA in the circumstances of this matter the strata committee elected at the 2020 AGM remained until the end of a validly called meeting electing a new strata committee.

112. It is abundantly clear (and Mr Wang accepts) that:

1. No strata managing agency agreement for PSMG was provided to the AGM on 6 October 2021.

2. The strata managing agency agreement was improperly signed by Mr Wang and only one member of the strata committee on 16 October 2021.

3. It was not until 9 November 2021 that the strata managing agency agreement with PSMG was signed by two members of the strata committee.

113. Under s 49 (2) of the SSMA, a strata managing agent is to be appointed by a strata scheme “by instrument in writing authorised by a resolution at a general meeting of the owners corporation”.

114. The first respondent submits that the “proposal” of PSMG provided to the owners corporation prior to the AGM on 6 October 2021 was sufficient, and that the subsequent execution of a managing agency agreement was appropriate (even if it was not properly executed until 9 November 2021).

115. The difficulty with this submission is that the “instrument in writing” that must be authorised by a general meeting of the owners corporation is not a “proposal” that sets out in a general way the services and fees to be provided by the strata manager.

116. An “instrument” is a formal document, such as a Deed, will, or contract that creates or records a legal right, liability, obligation, or contractual relationship. The general meeting of the owners corporation must authorise the “instrument in writing” that will, when duly executed, formally appoint the strata manager.

117. The Tribunal is satisfied there are material differences between the “proposal” that was provided to the AGM; and the managing agency agreement that was subsequently executed by two strata committee members on 9 November 2021.

118. The strata managing agency agreement is a far more extensive and detailed document than the “proposal.” The managing agency agreement sets out at Clauses 1-5; and Schedule A and Schedule B the “delegated functions” which the owners corporation delegates to the strata manager. The functions in Schedule A (Agreed Services) are delegated; and the functions in Schedule B (Additional Services) are delegated subject to the provisions of Clause 2 of the managing agency agreement (which relevantly provides that there must be a written authority “signed by a person duly authorised by the owners corporation”).

119. The strata managing agency agreement also contains provisions not referred to in the “proposal,” including warranties; the circumstances in which the strata managing agency agreement can be terminated; and the provision of an indemnity by the owners corporation to PSMG.

120. The Tribunal is satisfied that, comparing the provisions of the “proposal” with the managing agency agreement of PSMG that was executed subsequent to the AGM on 6 October 2021, there was no “instrument in writing authorised by a general resolution at a general meeting of the owners corporation” in compliance with s 49 (2) of the SSMA appointing PSMG.

121. It is unnecessary for the Tribunal to make findings as to whether there was any clear discrepancy between the fee structure identified in the “proposal” compared to the strata managing agency agreement. Irrespective of that issue (which was the subject of cross examination of Mr Wang at the hearing and submissions of the parties), the Tribunal is satisfied that to comply with s 49 (2) of the SSMA the managing agency agreement of PSMG needed to have been provided prior to a general meeting of the owners corporation and considered by that meeting in the context of a Motion to appoint PSMG as strata manager.

The Calling of the EGM on 11 November 2021

122. Pursuant to s 19 of the SSMA, a general meeting of an owners corporation other than an Annual General Meeting may be convened by the Secretary; or the strata committee. Such a meeting must be convened if the Secretary or the strata committee receives a “qualified request” to hold a meeting (i.e. a request by one or more Lot owners with a unit entitlement of at least 25% of total unit entitlements). The power of the Secretary of the strata committee of the owners corporation to call an EGM is also referred to in s 43 (f) of the SSMA.

123. As discussed previously, the EGM on 11 November 2021 was convened by an emailed Notice sent to Lot owners by PSMG on 22 October 2021.

124. There was no evidence before the Tribunal as to who was the Secretary of the owners corporation on or about 22 October 2021, or that that person had called the meeting. Mr Wang was not the Secretary of the owners corporation at that stage on his own evidence. If an office holder of a strata committee resigns, then the strata committee is to meet and appoint a member of the strata committee to assume that position (s 45 (2) of the SSMA).

125. There was no evidence provided by either party that there had been a meeting of the strata committee appointing a strata committee member to replace Mr Wang as Secretary.

126. There was no evidence that there was a Secretary of the owners corporation who called the EGM on 11 November 2021; nor that there had been a meeting of the strata committee that resolved to call the EGM on 11 November 2021. There was no evidence that there had been any qualified request by a Lot owner or owners to call the EGM on 11 November 2021.

127. The only other potential manner in which the EGM could have been called was if there was a power of the owners corporation or the strata committee that had been validly delegated to the strata manager under the terms and conditions of a properly executed and valid strata managing agency agreement.

1. Under the terms and conditions of the PSMG managing agency agreement, part of the Agreed Services under Schedule A was to:

2. Prepare and distribute agenda and minutes of all meetings.

3. Arrange a venue for meetings.

4. Act as Chairperson.

128. However, there is nothing in the terms and conditions of the managing agency agreement that delegates the power of the Secretary of the strata committee, or the strata committee, to call an EGM to the strata manager. Even if there was such a provision in the strata managing agency agreement, it is difficult to envisage how such an important and fundamental management power under the SSMA could be delegated to the strata manager.

129. In any event, even on Mr Wang’s own evidence, PSMG did not hold a validly executed strata managing agency agreement signed by two strata committee members until 9 November 2021.

130. Accordingly, the Tribunal is satisfied that the EGM called for 11 November 2021 did not comply with s 19 of the SSMA. Even if the EGM had been called in accordance with s 19 of the SSMA, the Tribunal is satisfied that there have been other serious failures of the management of the owners corporation and failure to comply with provisions of the SSMA, which are discussed below.

The Signing of the Managing Agency Agreement Between The Owners Corporation and PSMG

131. The circumstances in which the strata managing agency agreement was signed have been discussed previously.

131. Even if the first respondent’s argument that the “proposal” of PSMG put before the AGM on 6 October 2021 was sufficient to comply with s 49 (2) of the SSMA was accepted, on any view PSMG should have immediately circulated its managing agency agreement to the strata committee and obtained the signature of two strata committee members.

132. The fact that Mr Wang, as an experienced licensed strata manager and Secretary of the owners corporation for a period of 2 years between October 2019 and October 2021 did not do this is a matter of significance.

133. Mr Wang in his affidavits and in oral evidence sought to downplay the significance of this as an oversight or innocent mistake. However, it was only when NSW Fair Trading met with Mr Wang, and Mr McIntyre issued his email after that meeting. that Mr Wang took any measures to have the managing agency agreement signed by two strata committee members.

134. Not only was the strata managing agency agreement not signed by two strata committee members until only 2 days prior to the EGM on 11 November 2021, but Mr Wang did not advise the strata committee that the EGM should be postponed (or a fresh EGM called), despite the lack of a properly signed strata managing agency agreement when Notice of the meeting was issued on 22 October 2021, and the absence of any evidence that the EGM had been properly called in accordance with the provisions of s 19 of the SSMA.

135. Further, there was no evidence by Mr Hua as to the circumstances in which he signed the managing agency agreement with PSMG on 16 October 2021 and 9 November 2021, nor Mr Bai as to the circumstances in which he signed the managing agency agreement on 9 November 2021. As strata committee members, it was also the responsibility of Mr Hua and Mr Bai under s 37 of the SSMA to take reasonable measures to ensure that the strata managing agency agreement was properly executed and that the EGM arranged for 11 November 2021 had been validly called.

136. In cross examination, the first respondent put to Mr Dawes that if he was of the view that PSMG had not been properly appointed as strata manager and the EGM on 11 November 2021 had not been validly called, he could have taken proceedings in NCAT to seek orders to address those issues prior to 11 November 2021.

137. The Tribunal does not accept that in the circumstances of this dispute the failure of Mr Dawes or any other Lot owner to take proceedings in the Tribunal prior to the meeting on 11 November 2021 justifies or excuses the failure of the owners corporation; the strata committee; and PSMG to comply with their obligations regarding the management of the strata scheme.

138. It was also put to Mr Dawes in cross examination that if he believed the meeting on 11 November 2021 was invalid, there was no reason to attend the meeting. The Tribunal does not accept that the attendance of Mr Dawes and Lot owners who had similar views to him about the validity of the meeting attending the meeting was improper or irregular. The meeting had been called, and Lot owners had a right to attend.

The Conduct of the EGM on 11 November 2021

140. The Tribunal has viewed the videos that the parties have provided to the Tribunal of the EGM on 11 November 2021.

141. It is difficult to attribute evidentiary weight to the videos because there is no video that clearly documents all of the events that occurred.

142. However, from the videos, the Tribunal is satisfied that the following events occurred:

1. At the commencement of the meeting, Mr Wang was checking persons in attendance off the strata roll.

2. At various times through the respective videos, employees of PSGM collected ballots. It is not clear from the videos as to whether a quorum was announced.

3. Mr Dawes attempted to Chair the meeting, stating that he remained the Chairperson until a new strata committee was elected.

4. Mr Dawes asserted that there were defects in the appointment of PSGM as strata manager and the manner in which the meeting had been called.

5. Mr Dawes and Mr Wang argued about whether or not there were such defects.

6. Tensions immediately rose at the meeting. There was shouting and swearing by a large number of persons present. Some persons present asserted that Mr Dawes was not entitled to Chair the meeting and that he had lost confidence of Lot owners. A number of Lot owners asserted that they wanted to vote and wanted a new strata committee. Other Lot owners asserted that the meeting was invalid. Some Lot owners shouted that persons present should calm down and the meeting should proceed.

7. Police were called and attended the meeting. A police officer said the meeting had been “adjourned.” Some Lot owners disputed why the meeting could not proceed. Another police officer told the persons present that they should attempt to calm down; resolve their dispute in a reasonable way; and could take Tribunal proceedings.

8. Police then left. Mr Dawes ceased to speak but remained present along with a number of Lot owners who supported his views.

9. Mr Wang then spoke to the meeting. One Lot owner said the meeting could proceed without a Chairperson. However, it appears that Mr Wang then, in effect, operated as Chairperson. Another unidentified Lot owner then read the Motions. During the period after Police left at least one PSMG employee continued to collect ballots. It is unclear from the videos when the meeting formally ended or whether it was declared to have ended.

143. The contents of the videos show an owners corporation that is clearly deeply divided over its management. The meeting was shambolic, with numerous persons present often shouting over each other and swearing on occasions. There was no clear opening of the meeting; announcement of a quorum; or vote on any issue (including whether the meeting should proceed or should be adjourned).

144. By reason of Sch. 1 Cl. 12 (1) of the SSMA, Mr Dawes as Chairperson of the strata committee was to Chair the meeting and perform the functions under Sch. 1 of the SSMA required to be performed by the Chairperson. It was not the role of Mr Wang or anyone else to Chair the meeting when Mr Dawes was present and participating in the meeting.

145. Under Sch. 1 Cl. 12 (2) of the SSMA, if a Chairperson is “absent” from a meeting, the appropriate procedure is for a persons present at the meeting and entitled to vote to then elect a person present at the meeting and entitled to vote to act as Chairperson at the meeting. Even if the submission of the first respondent that the meeting was not properly adjourned because Mr Dawes had not called and taken a vote to adjourn under Sch. 1 Cl. 20 of the SSMA, the continuation of the meeting was non-compliant with Sch. 1. Cl. 12 (2) of the SSMA because no valid election of a Chairperson to replace Mr Dawes at the meeting after he ceased to be involved had occurred.

146. The first respondent submits that Lot owners disagreeing with each other about the management of a strata scheme is not sufficient to establish the matters under s 237 (3) of the SSMA. However, the events shown at by the videos at the meeting go well beyond disagreement. They demonstrate a significant failure to comply with the manner in which general meetings of the owners corporation are to be conducted under Sch. 1 of the SSMA, in addition to the failure to comply with Section 19 of the SSMA in respect of the calling of the meeting.

Events Since the EGM on 11 November 2021-Maintenance and Repair of Common Property

147. The attitude of the ‘current’ strata committee to what repairs to common property need to be performed; and what measures the owners corporation will take to comply with the recommendations of NSW Public Advisory and Rothshire Pty Ltd are matters that are relevant to the management of the strata scheme under s 237 (3) (a) of the SSMA.

148. The owners corporation has not paid the invoices of Rothshire Pty Ltd, and Rothshire Pty Ltd has recently informed the owners corporation that it will not continue to provide services unless such invoices are paid.

149. Under s 106 (1) of the SSMA, the owners corporation has a duty to properly maintain and keep in a state of good repair the common property of the strata scheme. It is well established that this is an important duty of the owners corporation (see, for example, the scope of the duty of the owners corporation set out in The Owners-Strata Plan SP 20211 v Rosenthal; Rosenthal v The Owners-Strata Plan SP 20211 [2018] NSWCATAP 243 at [35]; and The Owners-Strata Plan No 80412 v Vickery [2021] NSWCATAP 98 at [36]).

150. The duty under s 106 (1) of the SSMA includes keeping common property in proper order by acts of maintenance before it falls out of a state of good repair.

151. In this matter, both Rothshire Pty Ltd and NSW Public Works Advisory have recommended works be performed to keep common property in a state of good repair. The recommendation of NSW Public Works Advisory includes that there be a monitoring program by a suitable expert (such as a structural engineer) to ensure there is not any deterioration in the structural elements of the strata building.

152. Since the EGM on 11 November 2021, all that has relevantly occurred on the evidence available to the Tribunal is that the strata manager has responded to Rothshire Pty Ltd seeking payment of its invoices by asking for the provision of particulars of two invoices. There was a history of some invoices not being paid prior to 11 November 2021, but the failure to pay invoices since 11 November 2021 has led to a situation where Rothshire Pty Ltd has stated it will not continue to provide services until paid.

153. No evidence was provided by any of the strata committee members purportedly elected at the EGM on 11 November 2021 as to what the strata committee proposes to do to ensure that the owners corporation complies with its duty under s 106 (1) of the SSMA in light of the recommendations of Rothshire Pty Ltd and NSW Public Works Advisory.

154. There was no evidence, for example, that if there is a dispute between the owners corporation and Rothshire Pty Ltd the owners corporation will take immediate measures to engage another structural engineer to ensure that the works identified as appropriate by NSW Public Works Advisory will be performed.

155. There was also no evidence of any strata committee member as to if and when the outstanding invoices of Rothshire Pty Ltd will be paid or that Rothshire Pty Ltd will continue to be engaged.

156. The first respondent submits that there is “no evidence” the owners corporation is currently in breach of its duty under s 106 (1) of the SSMA and that the current strata committee has the right to query large invoices rendered by Rothshire Pty Ltd.

157. However, this submission invites the Tribunal to take a narrow view of the history of disputation and the likely future conduct of the owners corporation if a compulsory strata manager is not appointed.

158. Mr Wang in his affidavit of 29 November 2021 states as follows:

Vicinity has been a troubled complex for a number of years. During that time, the Chairman of the SC (sic) was always Mr Leith Dawes (‘Dawes’).

I observed that in that period, Dawes pursued an aggressive dispute with the developer of the complex which is on-going and has cost the OC and the Owners a large amount of money and to date has caused considerable loss of value due to the bad publicity it has attracted.

159. That evidence, together with other evidence such as the “petition” regarding Mr Dawes that was annexed to Mr Wang’s affidavit of 29 November 2021; the emails of Lot owners contained in the first respondent’s documents about Mr Dawes; and the anger of a number of Lot owners towards Mr Dawes displayed in the videos of the EGM on 11 November 2021 is sufficient for the Tribunal to infer that members of the strata committee purportedly elected at the EGM on 11 November 2021 have a view that the owners corporation has unnecessarily expended monies on experts in the past, and that there is a view that the common property repair issues (including significant structural defects) identified by Rothshire Pty Ltd are not matters deserving of significant future expenditure by the owners corporation.

160. In such circumstances, the Tribunal is satisfied that if the current strata committee remains and the owners corporation is not put into compulsory management for a period of time, there is a real risk that the owners corporation will (if it has not already done so) be in breach of its duty under s 106 (1) of the SSMA.

Conclusion-Should a Compulsory Strata Manager Be Appointed And If So For How Long?

161. The Tribunal is satisfied for the reasons expressed above that the management of the strata scheme is not functioning adequately under s 237 (1) (a) of the SSMA; and that the owners corporation has failed to perform one or more of its duties under s 237 (3) (c) of the SSMA. The Tribunal is satisfied that it should exercise its discretion to appoint a compulsory strata manager.

162. The applicants raised other matters in support of the application for appointment of a compulsory strata manager. It is unnecessary to address those issues because the issues addressed in these reasons is sufficient to establish that a compulsory strata manager should be appointed.

163. The first respondent submitted that one of the reasons a compulsory strata manager should not be appointed was that Mr Wang and others on the ‘current’ strata committee had extensive knowledge of matters relevant to the conduct of the Supreme Court proceedings, and that a compulsory strata manager would not be able to quickly come to grips with such issues.

164. There was no evidence before the Tribunal that any urgent instructions are required by the lawyers acting for the owners corporation in the Supreme Court proceedings; or that the appointment of a compulsory strata manger will deleteriously affect the conduct of such proceedings. There is no reason why a licensed and experienced compulsory strata manager should not be able to come to grips with the relevant issues in the Supreme Court proceedings in a relatively short period of time.

165. The appointment of a compulsory strata manager should provide a period of stability for the strata scheme, in circumstances where in Mr Wang’s words it has been “a troubled complex for a number or years.”

166. The applicants submit that the Tribunal should appoint Bright & Duggan Pty Ltd as a compulsory manager for 2 years.

167. Considering that compulsory appointment is a serious step, the Tribunal is not satisfied that a 2 year period is appropriate. A 1 year period is not sufficient, considering the recommendations of NSW Public Works Advisory; the recommendations of Rothshire Pty Ltd; the issue of whether the owners corporation is going to continue to engage Rothshire Pty Ltd; the issue of payment of Rothshire Pty Ltd’s outstanding invoices; and the ongoing Supreme Court proceedings.

168. In all the relevant circumstances, the Tribunal is satisfied that compulsory appointment for a period of 18 months from the date of these orders is appropriate to bring stability to the owners corporation. By reason of the provisions of s 237 (6) of the SSMA, a general meeting will be called prior to the end of the period of compulsory appointment, and a strata committee can be elected at that meeting.

ORDERS

1. Bright & Duggan Pty Ltd is appointed as the strata managing agent of The Owners-Strata Plan No 93087 to exercise all the functions of the owners corporation and all the functions of the chairperson, secretary, treasurer and strata committee of the owners corporation under s 237 (1) (a) and (2) (a) of the Strata Schemes Management Act 2015 (NSW) for a period of 18 months from the date of the making of this order.

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I hereby certify that this is a true and accurate record of the reasons for decision of the Civil and Administrative Tribunal of New South Wales.

Registrar

Decision last updated: 06 August 2025