Sarah Trissie Nocom v Community Association DP270469

[2015] NSWCATCD 78

Civil and Administrative Tribunal

New South Wales

Medium Neutral Citation:

Sarah Trissie Nocom v Community Association DP270469 [2015] NSWCATCD 78

Date of orders:

13 July 2015

Decision date:

27 July 2015

Jurisdiction:

Consumer and Commercial Division

Before:

J A Ringrose, General Member

Decision:

1. Pursuant to s 85 of the Community Land Management Act 1989, Len Robinson Strata and Community Management Pty Ltd (being licenced under the Property, Stock and Business Agents Act 2002) is appointed to act as managing agent for the Community Association for Deposited Plan 270469 for a period commencing on 13 July 2015 and ending on 12 July 2016 or the date of the 2016 annual general meeting for the Community Association, whichever is sooner.

2.  During that period the managing agent is to exercise all the functions of the association and may exercise all the functions of the chairperson, secretary and treasurer of the Community Association for Deposited Plan 270467.

3.  Len Robinson Strata and Community Management Pty Ltd shall be entitled to be renumerated in accordance with the terms of the Community Scheme Management Agency Agreement annexed to the application filed herein and shown as to commence from 15 August 2014.

4.  The Tribunal notes that Len Robinson Strata and Community Management Agents has agreed to refund to the community association all management fees received by it in respect of a period between 14 August 2014 and 22 December 2014 inclusive. Such refund is to be made as soon as possible.

Catchwords:

Compulsory appointment of manager for community association.

Legislation Cited:

Section 85 Community Land Management Act 1989

Category:

Principal judgment

Parties:

Sarah Trissie Nocom (applicant)
Community Association DP270469 (respondent)

Representation:

The applicant appeared in person
Ms Tilbrook appeared for the respondent
Mr Bacon – solicitor appeared for the applicant in a related claim

File Number(s):

SCS 14/60213

Publication restriction:

Nil

REASONS FOR DECISION

1. By an application filed on 17 December 2014 the applicant, as the owner of Lot 151 in DP270469 sought various orders including a declaration that all members of the executive committee had vacated office and an appointment of a person to convene and hold a meeting of the association to elect an executive committee. In an amendment to the application the principle relief she sought was the appointment of a managing agent pursuant to s 85 of the Act. In an application filed on 17 December 2014 Murray Mitchell, the owner of Lot 47 in DP270469 sought the appointment of a different compulsory strata manager for deposited plan 270469. Both applications contended that the management structure of the scheme was not functioning satisfactorily although at the Hearing, Mr Bacon, solicitor for Mr Mitchell submitted in the alternative that the scheme was now functioning appropriately and that it would be proper for the association to reappoint its own executive committee to manage the scheme.

2. The community association was registered on 22 December 2005 and there had been several amendments to the registered plan owing to further subdivision. At present the unit entitlements schedule of the scheme shows that it comprises some 176 Lots.

3. On 15 August 2013, upon the application of one Mary Falvey orders were made pursuant to s 85 of Community Land Management Act 1989 appointing Len Robinson Strata and Community Management Pty Ltd to act as managing agent for the community association for a period commencing 15 August 2013 and ending on 14 August 2014. The managing agent was directed to exercise all functions of the association including all functions of the chairperson, secretary and treasurer of the community association. In that application it was claimed that six of the seven members of the executive committee had resigned and that the association had not been able to appoint a new committee since. It was claimed that Ms Abela and Mr Mitchell had made it difficult for the committee to function and for decisions to be made. It was claimed at that time that as a result of the difficulties, matters were delayed including work to the tennis court and flood lighting. Allegations were made that Ms Abela and Mr Mitchell had been difficult to deal with and that the then current managing agent, United Strata Solutions were seeking to resign from their role because their position had become untenable due to the enormous amount of correspondence between the Lot owners and the threatening and abusive emails they received on behalf of various parties.

4. The initial appointment came to an end in August 2014 and for a period of time Mr Mitchell and Ms Abela sought an appointment as members of an executive committee, along with Mr A Farrugia. There were some concerns as to whether the meeting at which the executive committee was appointed had been validly convened as it was held after due notice had been given by Len Robinson Strata and Community Management Pty Ltd at a time when the authority to act as managing agents had come to an end. The validity of earlier meetings were put into issue by Mr Bacon on behalf of Mr Mitchell and similar claims could properly be made against the meeting in which an executive committee was appointed.

5. Shortly after the executive committee commenced to act they took steps to notify the bank for the association that the managing agents no longer had authority to operate any accounts. As a result of that notification the bank froze the accounts of the association for a period between 14 November 2014 and 23 December 2014.

6. As a result of these actions the essential services for the association and creditors of the association were unable to be paid and the security service threatened to discontinue its operations until such time as payment was guaranteed.

7. In the circumstances the applicant herein approached the Tribunal and obtained an interim appointment of a managing agent from 23 December 2014. The appointment was made in favour of Len Robinson Strata and Community Management Pty Ltd and that appointment was extended further from 23 March 2015 to 23 June 2015.

8. Concerns expressed by Mr Mitchell for the purposes of his application related to, what was claimed to be, misuse of funds by the managing agent and in particular the authorisation and writing of cheques for payment of managing agents fees at a time when the appointment as managing agents had ceased and before a further interim appointment was made. Mr Mitchell also expressed a concern at the rates of charge of Len Robinson Strata and Community Management Pty Ltd and the fact that it was only seeking appointment for a period of 5 years rather than a substantially lesser period.

9. Between 15 August 2014 and 23 December 2014 it is clear that there were significant disputes between lot owners and members of the executive. Meetings were postponed and a meeting scheduled for 5 December 2014 was unable to be properly convened owing to protests relating to the lack of authority of the committee and the failure of the committee to notify the Lot owners that they had obtained legal advice.

SUBMISSIONS BY INTERESTED PARTIES

10. Some 19 submissions were received from parties in response to the notice issued by the Registrar in respect of the present application and the related application of Mr Mitchell. It is not necessary to go into the detail of each response but it is sufficient to observe that all of the submissions provided by interested parties supported the application of Ms Nocom and the further appointment of Len Robinson Strata and Community Management Pty Ltd. There were no submissions in support of Mr Mitchell’s application or the appointment of One Strata as the nominated managing agents.

DECISION

11. Section 85 of the Community Land Management Act 1989 provides;

85 order by tribunal appointing managing agent

(1)   the Tribunal may, by order, appoint a managing agent;

(a)   to perform all the functions, or

(b)   to perform specified functions, or

(c)   to perform all the functions other than specified functions of an association or of a strata corporation.

Subsection (2) authorises persons including a person who has an estate or interest in a development Lot, mobile lot or strata Lot within the scheme to make an application, while Subsection (3) provides that an order may be made by the Tribunal, whether or not on an application, where it is satisfied that the managing structure of the scheme would be affected by the order is not functioning or is not functioning satisfactorily.

12. Subsection (4) requires that the appointee must hold a licence required by law to be held by a managing agent performing the functions to which the appointment relates and must have consented to the appointment.

13. 13   Having considered the submissions and evidence provided by Mr Mitchell on the one part and Ms Nocom in relation to the present application, along with the submissions of other interested parties the Tribunal is satisfied that the scheme is not and has not been functioning satisfactorily. It appears to some extent that the difficulties which resulted in the appointment in 2013 have came to light again involving the same parties on the management committee almost as soon as the compulsory appointment ceased. The operation of the scheme deteriorated to the point where bank accounts were frozen and creditors were not being paid.

14. 14   Although it has been suggested by Mr Bacon on behalf of Mr Mitchell that the scheme could now function appropriately, without the intervention of strata managing agents, it seems clear that all parties supporting Ms Nocom’s application are anxious that a continuing period of total management be provided. The progress in the restoration of the function of the scheme was evident immediately after an interim order for appointment of the previous managing agents was made. The evidence gives rise to a strong inference that if a controlling management facility was not imposed by the Tribunal, for at least a period of 12 months then the position could quickly deteriorate again.

15. 15   It is significant to note that Mr Mitchell did not seek to withdraw his application for compulsory appointment of strata manager but rather simply sought to appoint his own choice of strata manager in that position. Mr Mitchell (chairperson) and Ms P Abela (secretary) are proprietors and licensees of their own strata management company (Key Strata Management Pty Ltd) and it is a matter of some concern that they chose to embark on a course of action which resulted in the funds of the scheme being frozen by the bank and points being taken at meetings which sought to exclude an option of reappointing Len Robinson Strata and Community Management Pty Ltd as an alternative to be managing agent selected by Mr Mitchell.

16. 16   Whilst Mr Mitchell was seen to criticise the managing agents for writing cheques after their period of appointment had expired it is apparent that the writing of these cheques was essential to ensure that the scheme continued to operate with no manager appointed and with the appointed executive having no power to operate the bank account. The matter has now been brought under control following the interim appointment of the previous strata managers but that, in my view could hardly be described as an appropriate course to simply allow an executive committee which also included Mr Mitchell and Ms Abela to continue to operate without any further supervision or support.

17. 17   In the circumstances it is appropriate to grant the appointment sought by Ms Nocom in her application but limited to a period of 12 months.

18. 18   There is one further matter of concern which should be addressed prior to the formal appointment being made. It is noted that the managing agents continued to draw cheques for a fee through until December 2014 when they were again authorised to act on an interim basis. Ms Tilbrook who acted as the manager during the end of any period was questioned concerning the matters and she conceded that the company was not authorised to claim management fees between 15 August 2014 and 23 December 2014. Having obtained instructions from her principal she indicated that Len Robinson Strata and Community Management Pty Ltd would refund any fees to which they were not entitled within that period and that undertaking was given to the Tribunal. It is proper to note that undertaking in the orders of the Tribunal. I am satisfied that it is appropriate to make the appointment sought limited to a period of 12 months from 13 August 2015 or until the 2016 annual general meeting is held, whichever is the sooner. It is noted that the 2016 annual general meeting is due to be held before 30 June 2016.

J A Ringrose

General Member

Civil and Administrative Tribunal of New South Wales

27 July 2015

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: 04 September 2015