High Court bowls over NCAT (NSW) powers to make decisions
The High Court of Australia has recently ruled that the New South Wales Civil and Administrative Tribunal (NCAT) did not have the power to resolve a dispute between residents of different States: Burns v Corbett; Burns v Gaynor [2018] HCA 15. Australia’s Constitution reserves the power to resolve those disputes with the Courts.
This may have significant repercussions for dispute resolution in Australia’s strata industry and may have catastrophic consequences for the day to day operations of owners corporations and bodies corporate throughout the States and Territories.
The basis of the decision is relatively simple. Where the dispute involves people who reside in different States or Territories to each other, only the Courts can deal with that dispute and the specialist Tribunal lacks the jurisdiction to deal with it.
What this means is where any party to a dispute resides in another State/Territory outside of NSW, NCAT cannot hear the dispute and it will need to be taken to a Court. In Strata, NCAT has wide power to hear disputes under the Strata Schemes Management Act 2015 and the Home Building Act 1989.
Owners Corporations now need to consider where the person they are taking action against is located to work out whether they go to NCAT or a Court (in most cases the Supreme Court).
This High Court decision deals with NCAT in NSW but the concept may have widespread consequences not only in NSW. Each State and Territory will now need to consider their own Tribunal powers.
For example in QLD most strata disputes are resolved by:
- adjudicators in the Office of the Commissioner for Body Corporate and Community Management; or
- the Queensland Civil and Administrative Tribunal (QCAT).
However, unlike NCAT, QCAT (which deal with “complex disputes”) has been held to be a court of record so has been treated as a court of the State: Owen v Menzies & Ors; Bruce v Owen; Menzies v Owen [2012] QCA 170. That means QCAT may be unaffected by this High Court decision. However the Owen case was considered way before this High Court decision.
Further, under the Body Corporate and Community Management Act 1997 (Qld) ( BCCM Act ), only adjudicators have jurisdiction to resolve “non-complex disputes”, which is the significant majority of disputes that arise in the strata living environment in Queensland and include by-law contraventions, disputes about the reasonableness of a body corporate’s decision; and compliance with the BCCM Act (such as with the conduct of a committee or general meeting).
The question is whether this High Court decision will affect most of these strata disputes or not. It will probably only affect disputes that involve a resident of another state – for example, an investor owner who resides inter-state. It may mean that only a Court, not an adjudicator, may resolve a strata dispute involving the inter-state owner.
What should Owners Corporations/Bodies Corporate do?
What owners corporations / bodies corporate should do depend on whether they have already commenced action or intend on commencing action soon.
Where they have commenced action in NSW, they should seek urgent advice about the impact of the High Court decision on their particular case (whether a matter needs to be restarted etc). In all other State/Territories, advice should be sought to see if the High Court Decision would have any implication.
Where the owners corporation/bodies corporate has not commenced action,
It should:
- obtain advice on the potential impact of the case on the proposed dispute
- determine which jurisdiction is relevant
- consider alternate dispute resolution options
What is Grace doing?
Grace is seeking to co-ordinate input from stakeholders in all States/Territories on the impact to their legislative system in association with its role as National Partner of SCA National. Following this, formal legal advice will be considered and approaches made to the relevant Government Departments to see what action can be taken to alleviate stakeholder impact and to clearly define how matters are to be dealt with.
In the meantime, we recommend that owners corporations and bodies corporate take care to determine whether any parties to a dispute they are involved with reside inter-state. If the dispute involves an inter-state party, you should encourage the owners corporation/body corporate to take legal advice.
Watch this space…