As Summer Heats up so do the air conditioning complaints!

Summer is here and it’s predicted to be a hot summer season with temperatures in the high 30’s and some days even reaching 40’s.

It’s the time of year when lot owners and tenants look to install and use air conditioners to relieve themselves from the oppressive heat.

Did you know air conditioners are high on the list for strata disputes?

Air conditioners can cause all types of complaints in strata such as:

• What if the noise of the unit upsets the peace and quiet?
• Who’s responsible for maintenance?
• What if the unit leaks water into another apartment?
• Is it in line with the appearance of the lot?
• and much more!

A Good By-law Addressing Air Conditioning Units is Important

For these reasons it’s important that you have a good by-law in place regulating the installation and use of them  that covers the following (and much more):

• What type of air conditioning equipment is appropriate?
• Where can the unit be installed?
• Will council approval be required?
• Will owners corporation approval be required?
• Will it be installed on common property?
• Will a by-law be required for individual lots, or can it be covered under a general by-law?

A good by-law will ensure that your summer is as stress free as possible and reduces (and hopefully eliminates) any strata disputes in relation to air conditioners.

Adrian Mueller I BCOM LLB FACCAL I Partner

Since 2002 Adrian has specialised almost exclusively in the area of strata law. His knowledge of, and experience in strata law is second to none. He is the youngest person to have been admitted as a Fellow of the ACSL, the peak body for strata lawyers in Australia. Profile I Linked

Contact Us

For all strata law advice including by-laws, building defects and levy collections contact our specialist NSW and Sydney strata lawyers here or call 02 9562 1266, we’re happy to assist.

Will your by-laws need updating in line with the new Strata Laws?

Since last week’s article where we spoke about ‘phase 1’ of the strata law reforms, the proposed amendments to the Strata Schemes Management Act 2015 (NSW) have been released.

Below we explain the new proposed strata laws and share the timeline for their introduction here.

Original Owners Votes

•  If a scheme comprises of more than two lots the proposed amendments provide that the value of a vote cast by an original owner, usually a developer, of a strata scheme may be reduced.

Strata Committees

• Committee member removal now only requires an ordinary resolution and once removed they’re not eligible to be on the committee for 12 months.
• Where it is called for, an election for a committee can take place at any general meeting, not just the AGM.
• A call for nominations to the committee must be included in the general meeting notice.
• A member with a conflict of interest must be excused from voting and discussion on that matter.

Strata Managers

• Must provide notice to the owners corporation 6 months prior to expiration of their agency agreement.
• Fair Trading can recommend to NCAT that a compulsory agent be appointed to manage dysfunctional strata schemes.

Internal Funds Transfer

• Under the proposed amendment for internal funds transfers, the owners corporation must, within three months of the transfer, decide at a general meeting, if the funds should be repaid, and if yes, how it should be done – via a simple reverse transfer or by special levy.

Emergency Repair Levies

• The proposed amendments will reduce from 30 days to 14 days the time period for payment of a special levy for urgent repairs. This amendment is for necessary building repairs to mitigate any serious and imminent threats to the health and/or safety of building occupants.

Work Quotes

• Multiple quotations for works exceeding $30,000 will now be required for all schemes – small and large – Also, the comparative quotations will need to be for people or companies that are not connected with each other.

Pets

• A pet bond or fee can no longer be charged by the owners corporation.
• A by-law cannot impose unreasonable burdens on people with assistance animals.

By-laws

• Under proposed changes, owners corporations may consolidate the by-laws for the scheme only by special resolution – whether or not a by-law has been amended, repealed or added.
• Two lot strata schemes do not need to pass a resolution to issue a ‘Notice to Comply’ regarding a by-law breach.

Books and Records

• The strata roll and other mandatory records must now be kept electronically.

Rentals

• Rental agents will be required to give tenants and lessees a copy of a strata scheme’s by-laws and strata management statement on commencement of a lease and whenever documents are updated if they are not provided by the landlord or head tenant.
• Rental agents will have to provide the owners corporation notice that a lot has been leased or subleased if the notice hasn’t been provided by the landlord or head tenant.
• Tenants can give notice of the lease to the owners corporation if the landlord, head tenant or rental agent fails to do so. In giving notice of the lease or sublease the regulations may prescribe the documents or other evidence a tenant must provide.

Service of Documents

• The regulations may provide for the service of documents, including by prescribing additional methods of service.

Meetings

• General Meeting Notices – time period for notices increases from 7 days to 14 days.
• Company Nominees – number of votes to be limited in a similar way to the way proxy votes are limited.
• AGM – Delivery of development documents by the developer must be done 14 days before the first AGM.

Community Titles

• Most of the above proposals will also apply to Community Title regulations.

Strata Renewals

• Allowing a strata renewal committee to operate for 2 years instead of 1 year to reflect the length of time it can take for that committee to develop a strata renewal proposal.
• Permitting the Land and Environment Court to allow a collective sale of a strata building to proceed even though some of the preliminary steps associated with the sale have not been followed correctly (eg; inadequate meeting notice periods) if that has not resulted in a substantial injustice.

• Allowing dissenting owners who do not object in good faith to have costs awarded against them (eg; where an objecting owner is a developer who is trying to obstruct a collective sale to another developer)

More information

NSW Government – https://www.nsw.gov.au/media-releases/critical-reforms-to-strata-laws

Amendment Bill – https://www.parliament.nsw.gov.au/bills/Pages/bill-details.aspx?pk=18511

Timeline – https://www.parliament.nsw.gov.au/bill/files/18511/SPI%20-%20Strata%20Legislation%20Amendment%20Bill%202023.pdf

Adrian Mueller I BCOM LLB FACCAL I Partner

Since 2002 Adrian has specialised almost exclusively in the area of strata law. His knowledge of, and experience in strata law is second to none. He is the youngest person to have been admitted as a Fellow of the ACSL, the peak body for strata lawyers in Australia. Profile I Linked

Contact US

For all strata law advice including by-laws, building defects and levy collections contact our specialist NSW and Sydney strata lawyers here or call 02 9562 1266, we’re happy to assist.

The NSW Strata Reforms Phase 1

The NSW Government is moving ahead with phase one of the reforms to strata laws providing benefit to those living in strata. The first phase includes:

• Providing transparency – with collective sales and renewal processes
• Removing restrictions on pets – residents with pets will no longer be required to pay fees, bonds or for insurances for the joy of having a pet
• Requiring multiple quotes – ensuring competitive pricing is obtained for goods and services
• Giving Fair Trading approval to ask NCAT – to appoint compulsory strata managing agents to help manage dysfunctional strata schemes

Some Significant Changes…

Some of the more significant changes include:

Strata Committees

• Committee member removal now only requires an ordinary resolution and once removed they’re not eligible to be on the committee for 12 months
• Where it is called for, an election for a committee can take place at any general meeting, not just the AGM
• A call for nominations to the committee must be included in an AGM notice
• A member with a conflict of interest must be excused from voting and discussion on that matter

Strata Managers

 Must provide notice to the owners corporation 6 months prior to expiration of their agency agreement.

• Fair Trading can recommend to NCAT that a compulsory agent be appointed to manage dysfunctional strata schemes

Meetings

• General Meeting Notices – time period for notices increases from 7 days to 14 days
• Company Nominees – number of votes to be limited in a similar way to the way proxy votes are limited
• AGM – Delivery of development documents by the developer must be done 14 days before the first AGM

Quotations

• Multiple quotations for works exceeding $30,000 will now be required for all schemes – small and large

Pets

• A pet bond or fee can no longer be charged by the owners corporation
• A by-law cannot impose unreasonable burdens on people with assistance animals

Books/Records

 Must now be kept electronically

Strata Renewals

• Allowing a strata renewal committee to operate for 2 years instead of 1 year to reflect the length of time it can take for that committee to develop a strata renewal proposal
• Permitting the Land and Environment Court to allow a collective sale of a strata building to proceed even though some of the preliminary steps associated with the sale have not been followed correctly (e.g. inadequate meeting notice periods) if that has not resulted in a substantial injustice.
• Allowing dissenting owners who do not object in good faith to have costs awarded against them (e.g. where an objecting owner is a developer who is trying to obstruct a collective sale to another developer)

 More information:

NSW Government – https://www.nsw.gov.au/media-releases/critical-reforms-to-strata-laws

Amendment Bill – https://www.parliament.nsw.gov.au/bills/Pages/bill-details.aspx?pk=18511

Adrian Mueller I BCOM LLB FACCAL I Partner

Since 2002 Adrian has specialised almost exclusively in the area of strata law. His knowledge of, and experience in strata law is second to none. He is the youngest person to have been admitted as a Fellow of the ACSL, the peak body for strata lawyers in Australia. Profile I Linked

Contact Us

For all strata law advice including by-laws, building defects and levy collections contact our specialist NSW and Sydney strata lawyers here or call 02 9562 1266, we’re happy to assist.

Keeping a pet in some strata schemes can be costly when schemes charge an additional fee or bond for the joy of having a pet!

The good news is that the NSW Government as part of the reform has labelled these fees and bonds as being costly, unreasonable, and unnecessary as lot owners already pay levies.

Owners already pay for the upkeep of their strata schemes including the cost of insurance to cover damage to common areas as part of their levies.

The reform is part of phase one of the NSW Government’s review to ensure we have a more transparent and fairer strata system.

This week the NSW Government will move forward on critical reforms implementing changes to ensure the system is fairer and transparent… https://www.nsw.gov.au/media-releases/critical-reforms-to-strata-laws

So, will there be a blanket ban on pet fees and bonds under the reforms for strata laws governing community living arrangements?

ARE YOUR PET BYLAWS CURRENT? DO YOU NEED A REVIEW?

Adrian Mueller I BCOM LLB FACCAL I Partner

Since 2002 Adrian has specialised almost exclusively in the area of strata law. His knowledge of, and experience in strata law is second to none. He is the youngest person to have been admitted as a Fellow of the ACSL, the peak body for strata lawyers in Australia. Profile I Linkedin

Contact Us

For all strata law advice including by-laws, building defects and levy collections contact our specialist NSW and Sydney strata lawyers here or call 02 9562 1266, we’re happy to assist.

A Short Term Accommodation Levy for NSW?

Key tourism area’s across NSW are weighing in on Victoria’s short term rental accommodation (STRA) levy, agreeing that bed taxes were essential..

However, they’re concerned about the lack of details  on how the levy would work across platforms such as Airbnb and Stayz across NSW.

Is your Short Term Accommodation By-law Current?

Levy or no levy it’s important to ensure that your STRA by-laws are up to date and in line with you local council short term rental accommodation regulations, especially coming up to the festive season?

DOES YOUR SHORT TERM RENTAL ACCOMMODATION NEED A REVIEW?

Will NSW be the next state to impose a short term rental accommodation levy? Read on…

Adrian Mueller I BCOM LLB FACCAL I Partner

Since 2002 Adrian has specialised almost exclusively in the area of strata law. His knowledge of, and experience in strata law is second to none. He is the youngest person to have been admitted as a Fellow of the ACSL, the peak body for strata lawyers in Australia. Profile I Linked

Contact Us

For all strata law advice including by-laws, building defects and levy collections contact our specialist NSW and Sydney strata lawyers here or call 02 9562 1266, we’re happy to assist.

Lot Owners who Breach By-laws

An owners corporation is able to take legal action in NCAT against an owner who breaches its by-laws.

There are typically two types of legal action the owners corporation can take against the owner.

First, the owners corporation can apply to NCAT for an order to require the owner to comply with the by-laws or to stop breaching them.  Second, the owners corporation can ask NCAT to impose a monetary penalty on the owner if the owner has breached a by-law after being given a notice to comply with the by-law.

However, what happens when an owners corporation seeks both an order to stop an owner breaching a by-law and a penalty in the same legal action?  Can NCAT do both at the same time?

A recent decision by NCAT’s Appeal Panel sheds light on that issue.

Introduction to By-law Breach Case

Tania Brown lives in a unit in a strata building in NSW.  Ms Brown keeps dogs in her unit.

The building is governed by a by-law which requires owners and occupiers of lots to obtain owners corporation approval to keep dogs in their units.  The owners corporation alleged that Ms Brown had not obtained any approval to keep her dogs and that her dogs barked and caused a nuisance to other residents.

On 3 December 2021, the owners corporation issued Ms Brown with two notices to comply with by-laws.

The first notice alleged that Ms Brown had breached the noise by-law by allowing her dogs to constantly bark which disturbed the peaceful enjoyment of other residents.

The second notice alleged that Ms Brown had breached the keeping of animals by-law by having 4 large dogs within her unit without the approval of the owners corporation.

Prior to those notices being issued, Ms Brown had agreed to remove the dogs by 1 December 2021 in a settlement agreement made at a mediation conducted by NSW Fair Trading.

By-law Breach Legal Action

The owners corporation alleged that Ms Brown did not remove the dogs contrary to the settlement agreement and had continued to breach the by-laws after it issued the two notices to comply against her.

Consequently, the owners corporation commenced legal action in NCAT against Ms Brown.  In that legal action the owners corporation sought an order for Ms Brown to remove her dogs and a further order that Ms Brown be penalised $1,100.00 for contravening the by-laws after the notices to comply were issued against her.

In July 2022, the NCAT case was listed for a hearing at which the owners corporation was successful and orders were made, by the consent of Ms Brown and the owners corporation, to require Ms Brown to pay an $1,100.00 penalty to the owners corporation and remove all but one dog from her unit.  The order imposing the penalty would not apply if Ms Brown removed the dogs by 19 July 2022.

The Appeal Against NCAT

Shortly afterwards, Ms Brown filed an appeal against the orders made by NCAT, even though she agreed to those orders being made.  Despite that, Ms Brown’s appeal was successful.

The orders made by NCAT were set aside and the case was sent back to NCAT for a further hearing.

A Mixed Bag?

During the course of the appeal, NCAT’s Appeal Panel considered whether it was possible for an owners corporation to seek in the same proceedings in NCAT both an order to require an owner to comply with a by-law (in this case by removing dogs from a unit) and a further order for a monetary penalty to be imposed on the owner.

The Appeal Panel concluded that this was not possible essentially for three reasons.

First, different procedural rules apply to a mixed application seeking general orders and the imposition of a penalty because, for example, the rules of evidence do not apply to an application for general orders but, in contrast, the rules of evidence do apply to proceedings for the imposition of a penalty.

The Appeal Panel considered those different rules indicated that the Legislature intended that separate proceedings would need to be brought by an owners corporation to seek general orders and the imposition of a penalty.

Second, the Appeal Panel held that procedural fairness could not be afforded to the parties in mixed proceedings where different rules of evidence applied and a party could claim civil penalty privilege when giving evidence in proceedings for the imposition of a penalty but doing so would disadvantage that party in proceedings seeking general orders for compliance with the by-law.

Third, the Appeal Panel noted that different appeal rights exist in relation to an application for general orders and an application for the imposition of a penalty.  General orders can be challenged by way of an internal appeal to NCAT’s Appeal Panel whereas an appeal against a penalty needs to be filed in a Court.

The Appeal Panel concluded that the Legislature did not intend that an owner would be required to lodge two appeals to different bodies to challenge general orders and penalties made against him or her in the same proceedings in NCAT.

It was for these reasons that the Appeal Panel ordered the owners corporation to start again in NCAT and to only seek a general order to require Ms Brown to remove all but one of her dogs, not a penalty.

Conclusion

The decision of the Appeal Panel means that an owners corporation can no longer file one application in NCAT seeking both orders to require an owner or occupier of a lot to comply with a by-law and for a penalty to be imposed on the owner or occupier.

Instead, the owners corporation will either need to decide whether it wants to seek general orders or a penalty and commence one set of proceedings to seek either remedy or alternatively file two separate applications in NCAT, one seeking general orders for compliance with the by-law and the other seeking the imposition of a penalty.

No doubt commencing two separate proceedings would add to the time, cost and complexity of the case and quite possibly render it commercial unviable for an owners corporation to seek both general orders and a penalty against an owner or occupier who breaches its by-laws.

Case Name: Brown v The Owners – Strata Plan No. 82527 [2022] NSWCATAP 328

Adrian Mueller I BCOM LLB FACCAL I Partner

Since 2002 Adrian has specialised almost exclusively in the area of strata law. His knowledge of, and experience in strata law is second to none. He is the youngest person to have been admitted as a Fellow of the ACSL, the peak body for strata lawyers in Australia. Profile I Linked

Contact Us

For all strata law advice including by-laws, building defects and levy collections contact our specialist NSW and Sydney strata lawyers here or call 02 9562 1266, we’re happy to assist.

Strata Lot Owner and Owners Corporation in Dispute

Is it legitimate for a lot owner to pressure an owners corporation not to sue her or defend legal action she takes against the owners corporation?  And what happens when the lot owner oversteps the mark?  Can the owner be held in contempt of court?  A recent NCAT case considered that very issue.

Background

There is an apartment building on Sydney’s lower North Shore which contains 6 lots.  For several years, the owners corporation and a lot owner have been in dispute about various matters.  The dispute culminated in proceedings being commenced by both the owners corporation and the owner in NCAT against each other.  The owners corporation alleged that the owner engaged in conduct which was intended to intimidate, harass and deter the owners corporation from defending the proceedings she had commenced in NCAT against the owners corporation or to improperly induce a settlement of those proceedings.  The owners corporation applied to NCAT to have the owner referred to the Supreme Court for contempt or a finding that the owner was in contempt of NCAT and that she be punished and restrained from communicating with representatives of the owners corporation in certain ways.

Owner’s Conduct

The conduct of the owner which the owners corporation considered constituted contempt included threats of disciplinary action against the owners corporation’s solicitor made by the owner, communications by the owner which impugned the professional and mental capacities and motives of the owners corporation’s solicitor, contact by the owner with partners of the firm at which that solicitor worked concerning the conduct of the solicitor, contact by the owner with employers of strata committee members and references to family members of the strata committee members made by the owner in various communications.  The case of the owners corporation was that those communications by the owner impermissibly sought to pressure the owners corporation into deciding not to defend, or to settle, the proceedings in NCAT that the owner had commenced against the owners corporation.

The Law

A person can commit a contempt of court if he or she seeks to dissuade a litigant from prosecuting or defending proceedings by making unlawful threats, by abuse or by misrepresenting the nature of the litigation.  The law distinguishes between proper and improper pressure in punishing interference with litigants.  The question is whether the pressure sought to be applied in a particular case can be described as improper which, in turn, depends on all the circumstances of the case.  Improper pressure can interfere with the administration of justice and that is why it can constitute a contempt of court.

The Outcome

NCAT concluded that whilst some of the owner’s communications were inappropriate and included abusive emails that were puerile in their tone and content, the owners corporation did not prove that those communications caused the representatives of the owners corporation to be intimidated or caused the owners corporation to capitulate or settle the proceedings the owner had commenced against it.  In other words, even though the owner may have engaged in conduct which was intended to intimidate the owners corporation or its solicitor to discourage them from defending the proceedings, the evidence did not establish that the owner had been successful in doing so or had deterred, or was reasonably likely to deter, the owners corporation from defending the proceedings the owner had commenced against it or from prosecuting the proceedings it had commenced against the owner.  Consequently, NCAT concluded that it had not been established that the owner committed a contempt and therefore refused to refer the owner to the Supreme Court.

Anything Else?

The NCAT case contains an interesting, albeit brief, discussion of the consequences for an owner who sends threatening, rude or offensive communications to representatives of an owners corporation.  NCAT concluded that the owner’s communications may expose her to the risk of defamation proceedings and observed that communications which attempt to threaten, intimidate or influence witnesses are unlawful under the Crimes Act 1900 and that use of telecommunications devices, such as emails, that threaten or harass any person also constitutes criminal conduct under the Crimes Legislation Amendment (Telecommunications Offences and other Measures) Act (No. 2) 2004.  That indicates that representatives of the owners corporation who receive abusive, rude and offensive communications from an owner are not without remedy.

Case: The Owners – Strata Plan No. 38308 v Gelder (No. 2) [2023] NSWCATEN 7.

Adrian Mueller I BCOM LLB FACCAL I Partner

Since 2002 Adrian has specialised almost exclusively in the area of strata law. His knowledge of, and experience in strata law is second to none. He is the youngest person to have been admitted as a Fellow of the ACSL, the peak body for strata lawyers in Australia. Profile I Linked

Contact Us

For all strata law advice including by-laws, building defects and levy collections contact our specialist NSW and Sydney strata lawyers here or call 02 9562 1266, we’re happy to assist.

Strata be Warned of Telecommunications Providers

Earlier this year we wrote about an increasing rise of telecommunications providers who are licensed under the relevant Commonwealth telecommunications legislation, using their powers to gain compulsory access (at no cost to them!) to owners corporation’s buildings.  In that article (Pushy Telco’s and Owners Corporations) we drew to the attention of owners corporations that such telecommunications providers use the processes set out in the Telecommunications Act and the Telecommunications Code of Practice and in particular, the use of a Notice to Inspect and a Notice to Install.  We pointed out in that article that if an owners corporation does not respond within very precise timeframes to these Notices, then the owners corporation loses its ability to object to the proposals set out in those Notices,  and they lose their ability to require the relevant telecommunications provider to consider any alternatives.

Ongoing Developments Since Our Original Article

Since the time of our original article, it has been clear that the activities of these telecommunications providers (which go by various names,  including GigaComm, and Servicestream) has continued, with more and more Notices to Inspect and Notices to Install coming to our attention.

Owners Corporations Act or Lose your Rights

Telecommunications service providers have written to us unhappy that they are being challenged,  and they have suggested that they are only utilising the rights which they have under the telecommunications legislation.  What they fail to comprehend is that landowners (such as owners corporations) also have rights to object to the proposals by telecommunications service providers, and certain rights  to require telecommunications service providers to properly justify these proposals.

To be clear, if an owners corporation wishes to question a proposal which they receive from a telecommunications service provider, then it is essential and critical that the owners corporation acts in a timely and immediate fashion to ensure that a properly draft Notice of Objection is served on the telecommunications service provider, or the owners corporation may be stuck with whatever proposal the telecommunications service provider wishes to proceed with.

Unsure What to do…

If your owners corporation requires assistance with a proposal from a telecommunications service provider, we are experienced in the processes under the telecommunications legislation including in drafting Notices of Objection in compliance with that legislation.

Warwick van Ede I BEc LLM I Lawyer

Since 1990, Warwick has specialised in strata law, property law and litigation. Recognised for his expertise, he is also a NSW Law Society Accredited Specialist in Property Law. In 2021 he was selected to serve on the Property Law Committee of the Law Society of NSW. Profile I LinkedIn

Contact Us

For all strata law advice including by-laws, building defects and levy collections contact our specialist NSW and Sydney strata lawyers here or call 02 9562 1266, we’re happy to assist.

Do your strata by-laws keep pace with strata law changes?

In Nov 2016, every owners corporation was required to review its by-laws within 12 months.

Most owners corporations completed their by-law review by 2018.

Since then, there have been numerous changes to the laws affecting strata buildings.

Strata law changes affecting strata buildings

They include substantial changes to the laws regulating:

• Short term rental accommodation arrangements – a by-law can now ban short term lettings in certain circumstances;
• Pets – a by-law can no longer ban pets and by-laws that do are not enforceable;
• Renovations – the Design and Building Practitioners Act 2020 now applies to many renovations – do your renovations by-laws require owners to comply with the Act?;
• Fire Safety – news fire safety laws will be introduced to increase fire safety standards for strata buildings – do your by-laws allow your owners corporations to recover fire safety upgrade costs from owners?;
• Sustainability Infrastructure – new strata laws relax the requirement for approval of sustainability infrastructure such as solar panels and electric vehicle charging stations;
• Levy Recovery – there remains controversy about recovery of debt collection costs – do your by-laws allow these costs to be recorded in an owner’s ledger and recovered by the owners corporation?

Do your by-laws take into account these changes to the law?

If not, they might not be enforceable or they might simply be outdated.

So is it time to again review your by-laws? We have conducted 100’s of by-law reviews for owners corporations across NSW.

DO YOU NEED A REVIEW OF YOUR BY-LAWS?

Adrian Mueller I BCOM LLB FACCAL I Partner

Since 2002 Adrian has specialised almost exclusively in the area of strata law. His knowledge of, and experience in strata law is second to none. He is the youngest person to have been admitted as a Fellow of the ACSL, the peak body for strata lawyers in Australia. Profile I Linked

Contact Us

For all strata law advice including by-laws, building defects and levy collections contact our specialist NSW and Sydney strata lawyers here or call 02 9562 1266, we’re happy to assist.

An owner is entitled to appoint a “person” to act as his or her proxy at a general meeting of an owners corporation.

But does that allow an owner to appoint a company as his or her proxy rather than an individual?  The answer might surprise you.

 Is it Possible for an Owner to Appoint a Company as their Proxy?

Owners in strata buildings regularly appoint other people to act as their proxies at general meetings of owners corporations.  Invariably, those proxies are individuals, often other lot owners.  But is it possible for an owner to appoint a company as his or her proxy to vote at a general meeting of an owners corporation?  If so, who is entitled to exercise voting rights on behalf of the company as proxy?  The answer lies in the Strata Schemes Management Act 2015 (Act) and other legislation.

An Analysis

An owner is entitled to appoint a “person” to act as his or her proxy at a general meeting: cl 23(3) and 26(1), Sch 1 of the Act.  However, the Act does not provide a definition of a “person”.  But it is clear that a person can be an individual or a company for several reasons.

First, the Interpretation Act 1987 says that in any Act “person” includes an individual or a company: section 3(3) and Sch 4.

Second, the expression “person” is used throughout the Act in a way that makes clear that it can include both an individual or a company.  For example:

• section 7 expressly provides that a person can be a company for the purpose of determining whether a person is connected with another person;
• section 10(2) prohibits an owners corporation delegating any of its functions to a person unless the delegation is specifically authorised by the Act and it is clear that a “person” in that context would include a strata managing agent which would typically be a company;
• section 12 allows the owners corporation to employ any person that it thinks fit to assist it exercise its functions which includes a building manager which typically carries on business through a company;
• section 22 requires a “person” who has an interest in a lot that gives the person a right to cast a vote either personally or by nominee at meetings of the owners corporation to give the owners corporation written notice of that interest – in that context, a “person” clearly includes a company which owns a lot which is able to cast a vote via a company nominee.

There are other indications from the language used in the Act that a person is not limited to an individual but can include a company.  For example:

• The Act gives a co owner of a lot (which could be company) the right to vote at a general meeting in certain circumstances: cl 23(4) and (5) Sch 1;
• An original owner (i.e. the developer) can cast a vote by means of a proxy in certain circumstances (and a developer is almost invariably a company): cl 25(5) and (6), Sch 1; and
• A building manager or strata manager can vote as a proxy provided that their vote does not result in them obtaining a material benefit (and a building manager and strata manager are typically a company): cl 25(7), Sch 1.

Moreover, the expression “person” where used in legislation has repeatedly been interpreted by the Courts to mean both an individual and a company: see In the matter of Metal Storm Limited (in liquidation) (Receivers and Managers Appointed) (No. 2) [2019] NSWSC 1682.

There are other reasons why an owner can appoint a company as his or her proxy.  For example, a company can be appointed as an attorney under a power of attorney and the appointment of an attorney is similar to the appointment of a proxy given that in both cases a person is appointing another person or company to act as his or her agent.

And in sphere of company law, a shareholder can appoint a “person” as his or her proxy to vote at meetings of a company and it is clear that the person who is appointed as the proxy can be either an individual or a company: see section 249X of the Corporations Act 2001.

Finally, there is nothing in the Act which explicitly prohibits an owner appointing a company as his or her proxy.

Who Exercises Proxy Voting Rights?

Where an owner appoints a company as his or her proxy, the company itself cannot exercise voting rights as the proxy.  So who does?

Obviously, a company that is appointed as a proxy needs to appoint an individual to exercise the powers of the company as a proxy.  That would typically be done by a written notice given by the company to the owners corporation specifically empowering the individual to act on behalf of the company as proxy at meetings of the owners corporation.  Normally, that individual would be the company secretary or a director of the company.  But as long as the person is properly authorised by the company to exercise proxy voting rights on its behalf, and the owners corporation has notice of that authority, he or she may do so.

Conclusion

Whilst it is uncommon for an owner to appoint a company as his or her proxy, that situation can arise.  When it does, an individual with the authority of the company that the owners corporation has notice of is able to exercise the company’s proxy voting rights on behalf of the owner.

Adrian Mueller I BCOM LLB FACCAL I Partner

Since 2002 Adrian has specialised almost exclusively in the area of strata law. His knowledge of, and experience in strata law is second to none. He is the youngest person to have been admitted as a Fellow of the ACSL, the peak body for strata lawyers in Australia. Profile I Linked

Contact Us

For all strata law advice including by-laws, building defects and levy collections contact our specialist NSW and Sydney strata lawyers here or call 02 9562 1266, we’re happy to assist.