Choosing Between Two Mandatory Strata Managers
Dunstan v The Owners - Strata Plan No 79749 [2023] NSWCATCD
GoStrata’s CaseWatch is a short, sharp and easy-to-understand review of important and interesting Court and Tribunal decisions affecting Australian strata title stakeholders.
Quick Read
This 2023 decision by NCAT is about a dispute in a 13 townhouse Malua Bay [NSW south coast] strata title building about who should be appointed as their mandatory strata manager. After the strata building experienced damage due to unapproved work to retaining walls and drainage that required substantial repairs it was largely destroyed in the December 2019 bushfires. Disagreements between strata owners about what to do led to NCAT appointing a mandatory strata manager in 2022. But that didn’t resolve things despite a $10M partial insurance payout because the total required works were likely to cost up to $23M, the strata manager spent $1M on disputed work and other expenses, there were problems getting strata records and ongoing differences between the strata owners. By 2023 two strata owner groups were back to NCAT asking it to re-appoint a mandatory strata manager, except that one group wanted the existing manager to continue and the other wanted a new one. The key issue for NCAT was therefore if a mandatory strata manager was appointed who should it be. After reviewing what had [and hadn’t] happened during the past year and applying the decision in Foo v Frew, NCAT appointed a different mandatory strata manager because it decided that there were issues about the knowledge and actions of the previous strata manager, most strata owners wanted a different strata manager, and the issues facing the strata building warranted the change. So, despite being unique situation, the decision is a rare opportunity to see how NCAT thinks about competing potential strata managers.
Implications
The key implications of this strata case are as follows.
The principles NCAT should apply when appointing a manager under s 237 are stated in the NCAT decision in Foo v Frew.
Even if all strata owners want a mandatory strata manager, NCAT must still satisfy itself about the s 237 criteria.
In this case, the unresolved future of the strata buildings future 4 years after the bushfires and the disagreement between strata owners was enough to show it wasn’t functioning properly.
Plus, the absence of current insurance was a failure to comply by the strata building with a key strata duty.
Where there is a choice of mandatory strata managers a range of factors are relevant including; knowledge of strata laws; experience; relative costs [incl of a new manager getting up to speed]; and strata owner preferences.