Goodbye Strata Adjudications?

Introduction

The Strata Schemes Management Act 2015 was passed by the NSW Parliament in October 2015. The commencement date is yet to be proclaimed.

This article is concerned with the impact the new Act will have on strata disputes and their resolution in strata schemes.

The Adjudication Procedure under the Strata Schemes Management Act 1996 (“SSMA1996”)

The current Adjudication procedure under Chapter 5 of the SSMA 1996 can be summarised as follows:

  • The complainant (aka the Applicant) lodges an Application for Adjudicator’s Orders seeking relief under a specific section or sections of that Act against the Respondent party. The Applicant must pay a filing fee to lodge their Adjudication Application at the Tribunal’s Registry.

  • The Registry will write to the parties requiring the filing of written submissions in support of or against the Applicant’s Application (as the case may be).

  • The parties (including any interested parties) typically have 4 weeks to lodge any responding written submissions for or against the Applicant’s Adjudication Application (subject to any extensions of time granted by the Divisional Registrar).

  • The Applicant has the right to lodge further submissions in reply to the Respondent’s submissions within a further 7 days (subject to any extensions of time granted by the Divisional Registrar).

  • After the submission period closes, the parties’ submissions (including any interested parties’ submissions) are referred to an Adjudicator for determination on the papers. It can take 8 to 12 weeks to receive an Adjudicator’s decision on the papers.

  • If a party is dissatisfied with the Adjudicator’s decision e.g. there is a dismissal of the Applicant’s Adjudication Application, an appeal lies to a single Tribunal Member against an order of the Adjudicator. In the circumstances of a dismissal, the Applicant must lodge their notice of appeal and grounds of appeal not later than 21 days after the order takes effect.

  • The Appeal is normally conducted as a hearing. In some circumstances, it may also be determined on the papers.

Adjudications to be Abolished under the Strata Schemes Management Act 2015 (“SSMA2015”)

It is remarkable that under the SSMA2015 Adjudications will be abolished and that the power to make orders and settle disputes in relation to the operation and management of strata schemes will be given to Tribunal Members at a hearing.

Some commentators are of the view that Adjudications offer a cost effective way to finalise strata disputes and that its abolishment is likely to increase parties costs by having to seek legal representation at a final hearing which also involves the calling of witnesses and their cross examination, etc.

It is the author’s view that the abolishment of Adjudications and its replacement with Tribunal hearings will, in the majority of cases, give the parties an opportunity (commercial or otherwise) to genuinely attempt to resolve their dispute earlier on in the Tribunal proceedings rather than to engage in or be drawn into a protracted dispute and final hearing which will also raises the issue of a cost order for the losing party.

Conclusion

It is important to remember that while the Tribunal hearing process may appear simple, there is a tendency for complex legal issues to suddenly arise. Therefore, it is recommended that a party to a dispute or potential dispute obtain legal advice as soon as possible so that they know that they have put their best case forward the first time.

This article has been prepared by specialist strata lawyer Michael Pobi of Pobi Lawyers.

The information contained in this article is general information only and not legal advice. The accuracy and completeness of this article (and its contents) should be checked by obtaining independent legal advice before you take any action or otherwise rely upon its contents in any way.