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company title disputes
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Errol
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09/05/2018 - 11:36 am
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Hello, as an owner of a NSW company title unit, I read with interest a post from early 2013 in which was heralded the presentation of a bill to enable company title disputes to be heard in the local court jurisdiction.

Can anyone please tell me if this bill has actually been legislated and if it is now operational?

I’ve tried searching the NSW Parliament and Local Court websites but without success

Any guidance appreciated!

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Paul2000
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13/05/2018 - 9:16 am
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The bill you refer to is the Local Court Amendment (Company Title Home Unit Disputes) Bill 2013.

This bill gave the right to hear these matters in the local court whereas previously the only forum to resolve a Company Title dispute was the Equity Division in the Supreme Court. This is because the law covering company title is Federal Legislation. This was one of the driving forces which gave rise to the Strata Titles legislation in 1961. Under Strata law disputes concerning common property etc. can be resolved (if you are lucky) in the CTTT [now NCAT]. So even very trivial matters in a Company Title property would need to go to the Supreme Court of NSW, which is as expensive as it sounds.

The 2013 bill expands the jurisdiction of the Local Court to deal with a range of disputes similar to those which NCAT can hear in relation to Strata units. One major challenge for company title unit holders was that the only forum to resolve a dispute was the Supreme Court of NSW, whereas in the case of a Strata scheme a dispute involving owners who are using common property or simple disagreements over pets, finishes or awnings can be resolved in the NSW Civil Administration Tribunal (NCAT). 

This problem has existed for over a century and it was in part to address this difficulty that the State enacted Strata titles legislation in 1961 to allow for a cheap, quick and simple forum for dispute resolution.

The amendment bill expands the jurisdiction of the Local Court to deal with a range of disputes similar to those which NCAT can hear in relation to strata units.

In the case of a lease this will still be covered by the Residential Tenancies Act. Disputes between a company unit holder and the tenant are still covered by that Act and will still be heard by the NCAT.

Disputes over the sale of company shares including the mortgages of those shares, transfers, forfeiture of shares or the winding up of the corporation are still matters for the Equity Division of the Supreme Court.  It should be noted that the Local Court’s powers in relation to orders for payment of money are limited to the Court’s jurisdictional limit, currently $100,000, so if a dispute involves an amount in excess of this figure it will still require the Plaintiff to approach the Supreme Court.

The Local Court will also have wide powers to require a person to do, or refrain from doing any act in relation to the unit; to declare the rights and obligations of any party arising under the constitution of the corporation or under a contract; declaring the meaning of any term in the constitution or an agreement; and declaring whether any such term is void, invalid or otherwise unenforceable.

Some excerpts from the Bill.

Section 34A Insert after section 34: 34A Jurisdiction in company title home unit disputes

 (1) The Court has jurisdiction to hear and determine proceedings involving company title home unit disputes.

  (2) A company title home unit dispute is a dispute between interested parties about any of the following matters:

 (a) the health, safety and security of persons occupying or visiting the land owned by a company title corporation or residential premises located on that land (including, for example, safety of children on the premises and waste disposal),

 (b) the common property on the land owned by a company title corporation (including, for example, parking and vehicle access, repair and maintenance, design and appearance),

 (c) the use of residential premises located on the land owned by a company title corporation occupied by a shareholder of the corporation (including, for example, external appearance of premises or the keeping of pets),

  (d) the behaviour of persons occupying or visiting the land owned by a company title corporation or residential premises located on the land (including, for example, noise), Local Court Amendment (Company Title Home Unit Disputes) Act 2013 No 6 Schedule 1 Amendment of Local Court Act 2007 No 93 Page 4

 (e) the refusal by a company title corporation to allow a shareholder of the corporation to grant a lease or licence to use or occupy premises located on the land owned by the corporation, (f) administrative matters relating to the running of a company title corporation (including, for example, levies).

 (3) However, a company title home unit dispute does not include the following:

 (a) a dispute arising under a residential tenancy agreement to which the Residential Tenancies Act 2010 applies,

 (b) a dispute arising under a lease to which the Landlord and Tenant (Amendment) Act 1948 applies,

 (c) a dispute about the sale, transfer or other disposition of shares in a company title corporation or the forfeiture of such shares,

 (d) a dispute about any matter that is a superior court matter within the meaning of the Corporations Act 2001 of the Commonwealth.

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Errol
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14/05/2018 - 9:04 am
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Thanks Paul2000

So can you tell me if this is now actual, operational law

ie disputes appropriate for hearing in the Local Court (such as you’ve given examples of) can now be heard in the Local Court

Errol

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JimmyT
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14/05/2018 - 11:10 am
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Errol said
So can you tell me if this is now actual, operational law

It’s there in the Act See for yourself.

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Errol
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14/05/2018 - 2:51 pm
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Good-oh, thanks very much!

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Paul2000
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14/05/2018 - 3:36 pm
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Yes Errol. Local Courts now have this jurisdiction following the 2013 amendment I mentioned. What is the issue you are concerned with?

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Errol
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14/05/2018 - 8:25 pm
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Nothing specific Paul, it’s just that this issue is raised from time to time and it’s always been an article of faith that any dispute would have to go to the Supreme Court

I can now confidently tell board members that it’s now not such a drastic step should disputes have to be resolved legally

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JimmyT
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14/05/2018 - 10:04 pm
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I have to confess this one has slipped past me. I remember it being mooted but don’t recall anyone ever announcing it was law.

I’d be interested to hear if anyone has taken a company title issue to their district court and how they fared.

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Paul2000
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16/05/2018 - 3:55 pm
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Jimmy – the referall is made to the Local Court, not the District Court. Different jurisdictions.

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