Background

In the recently handed down decision of Read v The Owners – Strata Plan No. 5362 [2024] NSWCATCD 27, the Tribunal (NCAT) was faced with considering an application for the appointment of a compulsory strata managing agent under section 237 of the Strata Schemes Management Act 2015 (the Act) and section 238 of the Act for the removal of Strata Committee members.

The Applicants argued that the Strata Committee was dysfunctional, that certain members of the Strata Committee, along with their associates, had engaged in serious misconduct and engaged in proxy fraud i.e. manipulated proxy forms so that they could secure their positions on the Strata Committee.

The Tribunal’s Decision

In relation to the request for an order under section 237 of the Act for the appointment of a compulsory strata manager, the Tribunal held that the evidence did not sufficiently prove that the Strata Committee was dysfunctional or that there was a failure in the management structure of the Owners Corporation. Although the Tribunal noted that there were personal conflicts and animosities between the Applicants and the Strata Committee members, the Tribunal found that this was not enough to justify appointing a compulsory strata managing agent. The Tribunal ultimately refused to make the order appointing the compulsory strata managing agent.

In relation to the request for an order under section 238 of the Act, the Tribunal held that the removal of Strata Committee members is a serious matter and requires compelling reasons. The Tribunal held that they failed to demonstrate that the Strata Committee members had failed in their duties or engaged in misconduct to a degree that warranted their removal. Therefore, the Tribunal refused to make such an order.

In relation to the allegations of proxy fraud, the Tribunal held that the evidence, including statutory declarations and affidavits, did not clearly prove that any fraudulent activity occurred, applying the standard of proof set out in Briginshaw v Briginshaw (1938) 60 CLR 336, which requires serious allegations such as fraud to be clearly proven to the satisfaction of the Tribunal, taking into account the gravity of the accusation.

Conclusion

The decision highlights the importance of clear evidence and the high threshold required to appoint a compulsory strata managing agent and remove Strata Committee members under the Act. The issue of personal disputes alone are not sufficient to make such an order.  Additionally, allegations of fraud must be clearly proven.  If you need any assistance or advice, please contact us.

Should you require advice or assistance in filing a claim with the Tribunal for the removal of strata committee members, don’t hesitate to seek informed legal advice. For further support and specialised guidance on these matters, reach out to Michael Pobi at Pobi Lawyers on (02) 8324 7565.

Disclaimer

This article published by Pobi Lawyers is for general information purposes only and should not be relied upon as specific legal advice. You should obtain your own legal advice specific to your circumstances before you take any action or otherwise rely upon the contents of this article. The content of this article is subject to change.