Dispute Resolution

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GUEST OBSERVER
The Strata Schemes Management Act 2015 (NSW), which is now expected to commence on 1 October 2016, makes some significant changes to the existing statutory dispute resolution procedures that strata manager’s, owners corporations and lot owners should be aware of. These are detailed below but first, we look at the existing dispute resolution process.
The Current Dispute Resolution Process
The current Act, the Strata Schemes Management Act 1996 (NSW), requires most strata disputes to be mediated prior to an application being accepted by the NSW Civil &amp; Administrative Tribunal (NCAT) registry. There are a few exceptions including applications for interim orders and applications for the compulsory appointment of a strata manager. Mediations are usually conducted by mediators from the Office of Fair Trading. Mediations can take between one to three weeks to arrange.
Adjudicator’s Orders 
If an agreement was not reached at mediation, or, if the mediation agreement has been breached, in most instances the next step is to file an application for Strata Scheme’s Adjudicator’s orders. These applications are “heard on the papers”. This means that the applicant, respondent and any interested parties must file written submissions and evidence in accordance with the timetable provided by the NCAT registry. Evidence is usually by way of a statutory declaration. To view submissions made by interested parties you must contact the NCAT registry and make arrangements to view the file. NCAT copying fees will apply if you wish to make copies. After the closing date for submissions, an Adjudicator is assigned and they review the filed documents and make a written decision which is then posted out to the parties.
If you wish to appeal the decision of an Adjudicator then you must file an application for NCAT orders. Strict time limits apply and legal advice should be sought on the date the order takes effect and the time limit for filing an appeal. Leave to appeal outside of time can be applied for however it can be difficult to obtain. Costs orders are not available in this type of application.
Interim Orders 
These are Adjudicator’s orders that are made on an urgent and usually ex parte (meaning without the other party being present) basis. They are generally reserved for matters where an order is required to preserve the status quo prior to an Adjudicator making final orders. Interim order applications must be filed together with applications for Adjudicator’s orders.
Tribunal Orders
Applications for Tribunal orders are filed with the NCAT Registry. The Registry serves the application and a notice of directions hearing. Unlike Adjudicator’s orders, the parties must attend NCAT for hearings. Applications can be made for telephone hearings in some circumstances.
There is no right of appearance in NCAT and leave to appear must be sought at either the first directions hearing or in writing beforehand. At the first direction hearing, orders setting out a timetable for the progression of the matter are made. These will include dates when submissions and evidence are due. The Registry will also re-list the matter, for a further directions hearing or for final hearing.
Although the rules of evidence do not apply (except in civil penalty matters such as for a breach of a notice to comply) the proceedings are similar to court proceedings in that both parties are to appear and argue their case before a NCAT member. The Member may restrict each parties’ time to provide arguments and adduce its evidence. At the end of arguments the Member may reserve their decision or give an oral decision when the arguments have closed. You have the right to request written reasons for the decision.
Appeals are strictly limited both in time and the types of appeals that can be made. We recommend you seek legal advice before instituting any appeal.
 The new NCAT Process
The Strata Schemes Management Act 2015 provides for a new dispute resolution process. Owners Corporations can establish their own independent dispute resolution process and the NCAT is given wider powers. Mediation is still required however prior to applying for orders for most types of matters.
Arguably the largest change is that there will be no more applications for Adjudicator’s orders and all applications must be made for Tribunal orders. This means that all applications will now be heard in person (or if leave is granted over the telephone) and parties will need to attend the NCAT to present their arguments and evidence. Leave to appear is still required and the same provisions of the Civil &amp; Administrative Tribunal Act 2013 (NSW) apply to applications for leave. The process for Tribunal orders detailed above will remain the same although it is expected that there will be an increase in the number of matters listed at each directions hearing (meaning more time should be set aside to attend directions hearings) due to all matters now being heard by the Tribunal.
The ability to appeal from a Tribunal decision is unchanged. 
Allison Benson is legal practitioner director, Kerin Benson Lawyers and can be contacted <a href="https://kerinbensonlawyers.com.au/">here</a>.
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jchancellor-FAypfDUnLy

Property 101:  Dispute resolution and NCAT

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Adjudication
The process of determining an adjudication application. Adjudicators consider written material submitted by parties, and undertake further investigations if required. Adjudication does not involve a hearing.
Adjudicator
A professionally qualified, independent decision-maker who determines adjudication applications under the BCCM Act. In making decisions, adjudicators are not subject to direction (for example, by the Commissioner or Attorney-General).
See also Specialist Adjudicator
Administrator
A person appointed by an adjudicator to undertake specified functions of a body corporate, committee or committee member, such as calling a general meeting of the body corporate.
Affected person 
A person named by an applicant as being affected by the outcome sought in a conciliation or adjudication application. 
Appeal           
An application by a person aggrieved by an order to overturn the order. Adjudicator’s orders can be appealed to QCAT on a question of law and referee’s orders can be appealed to the Magistrates Court. The BCCM Office is not a party to an appeal and has no role in the appeal.
Applicant
A person who applies for conciliation or adjudication under the BCCM Act or for an order of a referee under the BUGT Act.
Application
A request, made in the required form and accompanied by the prescribed fee, for conciliation or for an order of an adjudicator or a referee.
Amendment
A request by an applicant to change or add to their application. Amendments require the approval of the commissioner, which may be subject to conditions if sought after parties have been invited to make submissions.
BCCM Act
Body Corporate and Community Management Act 1997.
BCCM Office 
Office of the Commissioner for Body Corporate and Community Management.
Body corporate
The legal entity created when a community titles scheme is established. All lot owners are automatically members of the body corporate. The ‘body corporate’ is different from the ‘committee’ elected to administer it on a day-to-day basis or a ‘body corporate manager’ engaged to assist with administrative duties. Distinct from a ‘body corporate manager’.
Body corporate manager
A manager (individual or a company) may be appointed by a body corporate to provide administrative services (for example, sending out levy and meeting notices). Distinct from a ‘body corporate’.
BUGT Act
Building Units and Group Titles Act 1980.
Case management 
The assessment of an application to determine if it meets the requirements of the body corporate legislation, and the management of applications through to their referral to conciliation or adjudication.
Commissioner
Manages the dispute resolution and information services provided by the BCCM Office. The Commissioner makes decisions about the case management of applications under the BCCM Act, but does not consider the merit of an application, make orders, or review orders.
Complex dispute
A dispute which can only be determined by QCAT or a specialist adjudicator. Includes certain disputes about contractual matters and lot entitlement issues.
Conciliation   
A process in which the parties to a dispute meet with a conciliator to try and reach agreement on how to resolve the dispute.
Conciliator     
An impartial dispute resolution professional who assists parties to resolve their dispute. The conciliator does not decide the merits of a dispute or how to resolve it.
Conciliation agreement       
The written document signed by the parties to a conciliation application, detailing the things they have agreed on. It is a good will agreement and is not legally enforceable.
Consent order          
An order made in the terms agreed to by the parties. A consent order can be enforced but cannot be appealed.
Declaratory order    
An application for an order about an operational matter where there is no dispute and no respondent (e.g., requests to change the financial year end date). A declaratory order is not appropriate where there is a dispute over an issue or an applicant is seeking an interpretation of or a ruling on a legal issue.
Dispute resolution recommendation         
A decision of the commissioner or delegate as to how an application should be resolved (e.g. conciliation or adjudication).
Dismissal       
A decision of the commissioner or an adjudicator not to decide an application that is within the jurisdiction, on the basis that it would be better determined in a court or tribunal of competent jurisdiction. 
Emergency application        
An application that can be referred to an adjudicator to determine without the usual submissions process, usually if there is no dispute (eg. if a body corporate seeks urgent authorisation of spending).
Expeditable application      
An application for final orders that may be progressed more quickly, either because there is no dispute or because of the urgency of the circumstances.
Extension       
Extra time which may be allowed on the due date to provide information, make a submission, or reply to submissions.
Interim order
A temporary order which puts an action on hold or keeps things as they are until a final order can be made about the dispute. Interim orders are distinct from expeditable applications. 
Jurisdiction    
The legislative power of a conciliator to conciliate an application; or an adjudicator or referee to decide an application.
Order  
The written decision of an adjudicator or referee to determine an application, accompanied by a statement of reasons. An order may grant or dismiss the orders sought, or made alternative orders. An order is legally binding and enforceable. It is an offence to contravene an order.
See also Interim order, Declaratory order and Consent order 
Parties to a dispute  
Those named in an application as being involved in a dispute – the applicant, respondent and affected persons.
QCAT  Queensland Civil and Administrative Tribunal. QCAT determines appeals of adjudicators’ orders and complex disputes, as well as disputes about debts owed by owners to a body corporate. 
Referee           
A professionally qualified, independent decision-maker who determines applications for orders under the BUGT Act 
Regulation module   
Each community titles scheme is registered under one of five regulations (subordinate legislation) made under the BCCM Act which helps determine the procedures applicable to that scheme.
Rejection       
A decision of the commissioner to end an application, for example because it is not within jurisdiction, or the applicant has not attempted self-resolution or conciliation, or the applicant has not supplied requested information.
Reply to submissions           
A written response made by an applicant to the submissions made about their application. 
Respondent  
A person named by an applicant as the person against whom the outcome in an application is sought. 
Self resolution           
Attempts to resolve a dispute before lodging an application. Self-resolution is compulsory for all applications.
Specialist adjudicator          
A professionally qualified, independent decision-maker who determines adjudication applications, particularly complex disputes, under the BCCM Act. Appointed by the commissioner at the request and with the agreement of the parties to the dispute.
Submission   
Written comments on an application made by a person invited to make a submission. Submissions cannot be confidential.
Withdrawal   
A request by an applicant not to proceed with an application. An application must be withdrawn in writing.
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jonathanchancellor-7SQnKwU6yx

Property 101: Glossary of Queensland's strata dispute resolution terms

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Fast-food franchisee SumoSalad has reportedly managed to negotiate lower rents from reluctant landlord Westfield through its tactic of insolvency laws.
The two parties are close to a mutually favourable commercial outcome, with the final details to be sorted out by early next week, Australian Financial Review columnist Tony Boyd wrote in Chanticleer.
The deal is expected to attract great attention from retailers operating in large shopping centres because it will show that it is possible to tip the balance of power from landlords back to tenants, Boyd said. 
SumoSalad co-founder Luke Baylis said on Tuesday he was negotiating better rental terms at Westfield centres, without going into details. 
SumoSalad’s boss put two of the 20 companies in his group into voluntary administration in June, escalating the tension between the fast food chain and Westfield after failed attempts over six months to negotiate <a href="https://www.urban.com.au/expert-insights/investing/71650-sumosalad-puts-two-outlets-into-voluntary-administration-in-rent-dispute-with-landlord-westfield" target="_blank">cuts in leasing charges</a>.
The two companies, Sumo Westfield Leasing Pty Ltd and Sumo Leasing Pty Ltd, were put into voluntary administration with Morgan Kelly and Peter Gothard from Ferrier Hodgson appointed voluntary administrators. 
Baylis’s contention was that SumoSalad franchisees had suffered from the opening of new food eating areas which, according to him, was designed to increase foot traffic but had cannibalised the sales of SumoSalad outlets because of increased competition.
"Using the voluntary administration law involved a more strategic approach in terms of negotiating," Baylis said.
He added that SumoSalad was well prepared for using the insolvency laws because all of its leases were held in separate companies within the SumoSalad Group. The two SumoSalad leasing companies had 63 separate leases across 25 different lessors. Westfield was responsible for 19 of them.
Kelly compared the use of the voluntary administration laws by SumoSalad to the Chapter 11 bankruptcy law in the United States. 
“You have protection from your creditors while you negotiate a commercial outcome,” he said.
"I believe the use of the laws in this way is unprecedented.” 
Kelly said in a report to creditors that many SumoSalad franchisees were not trading profitability "primarily due to high levels of rent" and led to a number of them “abandoning their sites”.
Baylis says that while the strategic use of insolvency laws had been effective, it would cost him about $250,000.
 
 
 
 
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SumoSalad close to winning lower rental deal with landlord Westfield

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<div>The newly created Australian Financial Complaints Authority, to begin operation on November 1, is a vital step to streamlining dispute resolution, according to a statement from the Australian Banking Association.</div>
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<div>They believe it will make the dispute resolution process easier to access and easier to understand for customers.</div>
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<div>CEO of the Australian Banking Association Anna Bligh said banks are strong supporters of external dispute resolution and supported streamlining the process to better help customers understand where they need to go if they have a complaint.</div>
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<div>“A fast, free and binding service which deals with disputes outside of court is the best way for a customer’s issue to be heard and quickly resolved,” Ms Bligh said.</div>
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<div>“AFCA will have increased powers including expanded scope to hear disputes from larger businesses and the ability to award compensation for direct and indirect financial loss and non-financial loss."</div>
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<div>She stated, “the Banking Code of Practice will be used by AFCA as the new benchmark for industry practice, considering in its investigations if a bank has breached the Code and therefore its contract with the customer,” she said.</div>
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<div>All ABA banks are members of the scheme therefore financially contribute to AFCA, which will ultimately be fully funded by contributions from the broader financial services industry.</div>
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Dispute Resolution

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