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Residential Focus

14 July 2021

#Property, Planning & Development

Published by:

Stephanie Tan, Simona Njaim

Residential Focus

NCAT-related changes to the Strata Schemes Management Act 2015 take effect

On 24 February 2021, the Strata Schemes Management Amendment (Sustainability Infrastructure) Act 2021 (NSW) (Amendment Act) commenced. The Amendment Act received assent on 24 February 2021 and amends the Strata Schemes Management Act 2015 (NSW).

As suggested by the title, the main focus of the Amendment Act relates to sustainable infrastructure. However, the amendments also make changes to the existing section 228 and introduce a new section 247A. This article focuses on these two specific amendments, commencing 1 July 2021, and how they directly impact owners corporations in NSW Civil and Administrative Tribunal (NCAT) proceedings.

Section 228(2)(c) – notice of applications

Under the Amendment Act, section 228(2) (of Division 3 – Procedures for applications to Tribunal) regarding notice of applications to Tribunals was amended to include a new subsection (c) which requires an owners corporation to immediately serve a copy of any NCAT application to all lot owners of that strata scheme.

The amendments are shown in subsection (c) below:

"228   Notice of applications to Tribunal

(1)  The registrar must give the named parties to the application, and the owners corporation, a copy of an application for an order (other than an order imposing a monetary penalty).

(2)  On receipt of an application, an owners corporation given notice of an application for an order must—

       (a)  immediately cause a copy of the application to be prominently displayed on any notice board required to be maintained by or under the by-laws on some part of the common property, and

       (b)  so display the copy for the period specified in the notice for the making of submissions, and

       (c)  immediately serve a copy of the application on each owner of a lot in the strata scheme except an owner who is a named party to the application.”

Everyone deserves notice

Before this amendment, an owners corporation was only required to display any notice of an NCAT application on a notice board in the common property area for a specified period of time. In effect, many lot owners who do not inspect notices regularly may not be aware of the commencement of NCAT applications, particularly larger strata schemes. The onus on the owners corporation to keep each lot owner (who is not a named applicant in the NCAT application) informed on such applications have now increased and will need to be considered as part of its ordinary business.

This amendment does not operate retrospectively and does not apply to NCAT applications served on the Owners Corporation before 1 July 2021.

Section 247A

Under the Amendment Act, section 247A titled “Civil penalties for contravention of orders” was inserted as a new provision under Division 5 – General provisions relating to Tribunal powers and orders. Under section 247A, parties can make an application to the Tribunal for a monetary penalty of an amount up to 50 penalty units (the equivalent of $5,500) for contravention of an order.

An application of this kind is not limited to the parties in which the original order relates, but also extends to lot owner(s) or person(s) having an interest in that order, regardless of whether they are a party. Further, if the original orders give effect to an agreement arising out of a mediation, the parties to that mediation may also make an application for a contravention of that order.

Notably, a person cannot be punished twice for contravention of the section, a contravention for a civil penalty provision of the Civil and Administrative Tribunal Act 2013, or a contempt of the Tribunal.

Section 247A is set out as follows:

“247A  Civil penalties for contravention of orders

(1)  The Tribunal may, by order, require a person to pay a pecuniary penalty of an amount of up to 50 penalty units for contravention of an order under this Act (the original order).

(2)  An application for the order may be made—

      (a)  by the applicant for the original order, or

      (b)  by the owners corporation, owner or other person having or acquiring an estate or interest in a lot in the strata scheme to which the order relates, or

      (c)  in the case of an order that gives effect to any agreement or arrangement arising out of a mediation session, by either party to the mediation.

(3)  A person is not liable to be punished twice if the person’s act or omission constitutes both a contravention for the purposes of this section and—

      (a)  a contravention for the purposes of a civil penalty provision of the Civil and Administrative Tribunal Act 2013, or

      (b)  a contempt of the Tribunal.”

Importantly, the new section 247A links to the existing section 248 regarding the recovery of unpaid civil penalties which states that “any civil penalty imposed by the Tribunal as a result of a contravention of an order under this Act that is to be paid by an owner of a lot to the owners corporation may be recovered under this Act as if it were an amount of unpaid contributions”.

Don’t take orders too lightly, you might face a fine

This amendment enables all parties to proceedings, including interested parties, to enforce orders made in NCAT against contravening parties by way of a monetary penalty. This avenue of relief was not previously available. Before this amendment, NCAT could issue orders and fines for non-compliance with by-laws, but could not make orders for the contravention of such orders.

In addition, monetary penalties for contravention of orders could only be imposed via Section 77 of the Civil and Administrative Tribunal Act 2013 (NSW), which only allows an authorised official (being the Minister or a person with the Minister’s written consent or authority) to make such an application.  

This was considered a loophole that allowed owners and owners corporations to essentially ignore orders made by NCAT as there was little or no immediate consequence for doing so. Section 247A now puts pressure on parties to comply with NCAT orders, on the threat that a monetary penalty can now be imposed, on application by various interested parties. The section will operate retrospectively, applying to all NCAT orders made before 1 July 2021, but only where the contravention occurs after 1 July 2021.

What do these changes mean for owners corporations?

If your scheme, or a lot owner(s), has become a party to NCAT proceedings, notification of applications needs to go to every lot owner. Your strata committee or managing agent (particularly in larger schemes) should discuss and arrange processes and protocols on getting these notices out expeditiously.

Where orders are made in NCAT, it would serve the scheme well to note all important dates, terms of the order and when compliance expires, whether the order is made for or against the scheme. The scheme may also want to inform interested parties if the orders favour the scheme. If a scheme is unsure of its rights and obligations, we recommend that the scheme seeks appropriate legal advice when dealing with issues of compliance with NCAT orders.

Authors: Stephanie Tan & Simona Njaim

In the media

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Australian PCI: Construction expansion hit with high prices and capacity squeeze
The Australian Industry Group/Housing Industry Association Australian Performance of Construction Index fell by a further 2.8 points to 55.5 in June, trending lower after hitting a record high in March (readings above 50 indicate expansion in activity, with higher results indicating a faster expansion). Download the full report (05 July 2021).  More...

Detached dwelling approvals remain elevated in May
The Australian Bureau of Statistics released its monthly building approvals data for detached and multi-units data covering all states and territories. Detached approvals are expected to remain elevated for several more months as approval authorities work through the remaining HomeBuilder projects (05 July 2021).  More...

HIA: Loans for new home building remain elevated but below peak
"Confidence in the broader housing market is strong, supported by low interest rates and ongoing house price growth,” added MsLillicrap. This has seen the number of loans for established homes increase by 10.3 per cent in the three months to May, reaching the third highest level since the series began in 2002 (02 July 2021).  More...

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Timber supply can't keep up with demand as housing boom comes after Black Summer bushfires
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New tool to determine quality and trustworthiness of NSW residential buildings
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Published – articles, papers, reports

Australian Bureau of Statistics
05 July 2021: Building Approvals, Australia.

Practice and courts

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ABCB consultations

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A discussion paper in response to the Building Confidence Report is now open for public comment. Responses to questions in the discussion paper are welcomed until 19 July 2021. Read more here.

WMTS-040: Public comment draft round 1
This technical specification sets out requirements for metallic and plastics bodied waste pipe outlets and gratings, separate or integral, for sanitary plumbing applications. Closes 3 August 2021. Read more here.

ABCB: Improvements to the code’s structure and format will be implemented for NCC 2022
To guide users through the changes, the ABCB has developed a range of supporting resources that will be released in stages leading up to the publication of the NCC 2022. The first stage of articles and resources are being released here.

Update: National Construction Code (NCC) 2022 public comment draft (stage 1)
Please note The Australian Building Codes Board wishes to advise that consultation on stage 1 of National Construction Code 2022 public comment draft has now been extended until 11 July. Read more here.

Adoption of NCC 2022 to be delayed
The delayed adoption will also see adjustments to key dates in the amendment cycle process for NCC 2022 to allow stakeholders time to participate. These adjusted dates include:
May – July 2021: NCC 2022 public comment draft released for public consultation.
May 2022: NCC 2022 preview published here.
If you have any questions regarding the delayed adoption of NCC 2022, please submit an online enquiry.

Comcare consultation: Proposed change to plant registration – removal of a condition
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Conflicts of interest – savings and transitional arrangements
Clause 71 of the regulation introduces savings provisions for certain conflict of interest situations where the certifier was appointed before 1 July 2020 and the work will be completed before 1 July 2022. The provisions relate to council-certified developments and to developments where the certifier gave advice on how to comply with the BCA deemed to satisfy provisions. For all the changes, access the amendment regulation here.

New mandatory standards for building rectification
The standard will be reviewed and updated prior to the 1 July 2021 commencement of the Government’s game changing building reform agenda underpinned by the Design and Building Practitioners Act 2020. The first Practice Standard will initially apply to certifiers working on residential apartment buildings, where the majority of problems and complaints have been received. The Practice Standard for registered certifiers is available on the Fair Trading NSW website.

Building Information Modelling (BIM) for WHS management
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Cases

PlumbCorp Group Pty Ltd v Paras [2021] NSWCATAP 207
(1) Leave to appeal refused. (2) Appeal dismissed.
APPEAL – whether expert evidence requires reference to the Experts Code of Conduct – leave to appeal – criteria for granting leave.
Home Building Act, 1989 (NSW); Fair Trading Act, 1987 (NSW); Civil & Administrative Tribunal Act 2013.

Noel v Intelpools Pty Ltd [2021] NSWCATAP 199
CONSUMER LAW – consumer guarantees – supply of services – when cause of action arises.
Australian Consumer Law (Cth); Civil and Administrative Tribunal Act 2013 (NSW); Fair Trading Act 1987 (NSW); Home Building Act 1989 (NSW).
Cases cited: Al-Daouk v Mr Pine Pty ... noted that the claim was not brought under the Home Building Act 1989 (NSW) because “it is well outside the statutory ... well outside the statutory warranty period for a home".

Heys v Balmain Projects Pty Ltd [2021] NSWCATAP 192
BUILDING AND CONSTRUCTION – Home Building Act 1989 – statutory warranty – proceedings for breach – time in which proceedings to be commenced – calculation of time – applicability of section 36 of the Interpretation Act 1987.
ADMINISTRATIVE LAW – particular administrative bodies – NSW Civil and Administrative Tribunal – discretionary decision on practice and procedure – failure to take into account relevant matters.

Legislation

NSW

Regulations and other miscellaneous instruments
Environmental Planning and Assessment Amendment (Major Projects) Regulation 2021 (2021–356) – published LW 1 July 2021.
Mining Amendment (Standard Conditions of Mining Leases–Rehabilitation) Regulation 2021 (2021–360) – published LW 2 July 2021.

Environmental planning instruments
State Environmental Planning Policy (Exempt and Complying Development Codes) Amendment (Low Rise Housing Diversity Code) 2021 (2021–366) – published LW 2 July 2021.

Bills assented to
Building Legislation Amendment Act 2021 No 21 – assented to 05 July 2021.

Disclaimer
The information in this publication is of a general nature and is not intended to address the circumstances of any particular individual or entity. Although we endeavour to provide accurate and timely information, we do not guarantee that the information in this article is accurate at the date it is received or that it will continue to be accurate in the future.

Published by:

Stephanie Tan, Simona Njaim

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