Time Fair Trading and NCAT were sin-binned

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It’s been a while since I said this – and it’s something I should put in my diary for every three months or so – but isn’t it time the NSW Government did something about NCAT and the whole tribunal system.

And by “something” I mean, have a Fair Trading system that actually supports people (rather than just “advising” them) and a Tribunal whose verdicts can be trusted.

Or do away with both of them and come up with something that actually works.

Recently, we’ve seen the unedifying spectacle of three verdicts by Members of the NSW Civil Administrative Tribunal, two of which challenged the very validity of basic by-laws … and won.

But those verdicts were challenged on appeal, and both of them were overturned by the Appeals panel. After months of bitter in-fighting, and hundreds of thousands of dollars wasted on legal fees, it’s “as you were.”

In the interim, at least two communities have been torn apart, and individuals on both sides have suffered a great deal of personal stress as they strove to protect what they saw as essential elements of their lifestyles.

I’m not going to mention what the issues were – there’s no point in picking the scabs off those wounds – but suffice it to say that in three separate instances, owners challenged by-laws on the grounds that they were “harsh, unconscionable and discriminatory”.

NCAT appeals panel

In two of the original cases, the Tribunal decreed that the by-laws were invalid, in a third its Member disagreed and upheld a complaint against the owner concerned. Everyone then trotted off to the NCAT Appeals Panel which, after several months of deliberation, came down on the side of the by-laws.

Meanwhile, as I said, there was much distress and expense on both sides.  The fact that some of the “winners” are now considering punishing the other side by extracting maximum costs plus fines from the “losers”, only exacerbates a problem that should never have existed in the first place.

As an aside, why the Tribunal would award costs against a party that it had originally agreed with, then changed its mind, is beyond me?

Was there no point at which the ordinary Members of the Tribunal, hearing the original cases,  couldn’t have contacted one of his or her senior Members and asked their opinion on something with potentially as far-reaching consequences as the ability to challenge by-laws that upset some individuals (and are there any that don’t?).

But when you start to unpick the NCAT knitting, the whole holy fabric starts to unravel very quickly.

For a start, questions have to be asked about the calibre of the people who sit in judgement of us mere strata mortals.  And then there are serious doubts about the quality of advice – if any –  that they get from their high-ups.

Validity

In this specific case, the by-laws concerned had been examined by the then Ministry Better Regulation and Innovation (aka Fair Trading) and updated but not revoked. Doesn’t that tell you something about their validity?

Well, apparently not, because two NCAT Members struck them down and, in one case, but for a general meeting vote lost by a slender 0.1%, it would never have gone to appeal and might never have been reinstated.

But forget the specifics of the strata schemes involved and whether or not the challenges and appeals were valid, the whole structure of the Tribunal and Fair Trading is shaky to say the least.

Anyone in NSW who is in dispute with their neighbours or their committee (or vice versa) is obliged to first seek mediation at Fair Trading (Consumer Advice in Victoria).

In my experience, and other Flatchatters’, if you contact Fair Trading for advice, they refer you to the law.  That’s all you get – “section so and so says such and such” and no matter how many times you wail “but what does it meeeeean?’ the response will be the same:  little advice and no support.

So you go through the torture of mediation where the Fair Trading bod resolutely refuses to take sides even when they must know one side or the other is wrong. 

Little advice, no support

I once had the unedifying experience of complaining about a neighbour playing painfully loud music at ridiculous hours (2 and 3am) only to be told by the mediator that I could complain about the volume or the time but not both.

Just as an aside, it led to this tragi-comic exchange:

“You seem to think you know more about strata law than I do,” she said.

“I would put money on it,” I replied.

OK, having received little advice and no support, you pursue the matter at NCAT and … well … who knows? You may find yourself in front of one of those exceedingly rare creatures who knows the law, understands the dynamics of strata politics and might even have lived in strata (highly unlikely).

More likely you will encounter someone who has never lived in an apartment, let alone served on a strata committee, and doesn’t appreciate the importance of by-laws as the glue that holds strata communities together.

Now, following the long overdue demise of the CTTT, a few years ago, its replacement, NCAT, was supposed to provide a streamlined service in which lawyers wouldn’t be required. The intention was that you represented yourself, albeit with support and advice, and if you wanted to hire a lawyer, you had to apply for leave to do so and the other side had to agree. Ha!

The system is so lawyer-dependent now that in an ancillary case to those I referred to above, the Member decided to grant leave to have legal representation retrospectively, despite the fact that the plaintiff was representing himself.

It gets worse.  Suppose your committee takes an owner to the Tribunal for, say, running short-term lets in breach of your by-laws.

The Tribunal rules in your favour, issuing orders that the neighbour must, take their property off the internet list.

The neighbour appeals but loses.  They are told to delist their property but they fail to do so. 

So you go back to the Tribunal and ask for a financial penalty to be imposed for failure to obey the order.  The Tribunal agrees but the neighbour doesn’t pay.

Now you have to go to your local court to get an order to the neighbour to pay the penalty.  So much hassle, so many legal fees; at what point do you just say “stuff it!” and let it go? Or start using “unconventional” means to stymie the holiday letting host?

How much easier would it be if the original Tribunal member could just say, “do this or cop a fine of x amount”? Oh, and let’s say that amount doubles if the miscreant appeals and loses.

How much easier would it be if Fair Trading (Department of Better Regulation) and NCAT (Attorney General’s office) actually spoke to each other, rather than saying “don’t talk to us, talk to them” when you ask a question about strata law.  And they do, every time, believe me.

Scrap mediation

So here’s my plan to fix everything in one fell swoop.

Firstly, you take strata out of Fair Trading and put it in the A-G’s office, as they’ve done in Queensland (where, admittedly, it used to be in the department of horseracing and wine promotion … no joke!)

Then you scrap mediation and set up a strata disputes panel system where every case is heard initially by a panel of three people comprising one current or former strata committee member, a strata manager and a strata lawyer.

Every case is limited to 10 minutes of argument, for and against, and 10 minutes of deliberation.  The panel can decide who’s right and who’s wrong with a set scale of penalties for non-compliance.

If either party chooses to appeal the ensuing verdict to the Tribunal, they agree to pay all reasonable costs for both parties, should they lose. The Tribunal verdict also comes with a penalty attached for non-compliance.

If they want to appeal the Tribunal decision, it would be at their local or district court, depending on the amounts involved.

The system would be simple, progressive and faster.  And you wouldn’t be running round in circles arguing the same points over and over and getting nowhere.    

As for those cases where the validity of a by-law is being questioned, that should be a different system in which senior Tribunal members look at the law, not the “he-said, she-said” of individual strata disputes. 

But, in the first instance, let the people who know strata decide on the rights and wrongs of disputes. And let the less wise old heads of the Tribunal shuffle off to well-deserved retirement where they can’t do any more harm.  

8 Replies to “Time Fair Trading and NCAT were sin-binned”

  1. Avatar Jimmy-T says:

    This is now being discussed in the Flat Chat Forum

  2. Avatar Ziggy says:

    I absolutely agree with everything Jimmy has said re NCAT and Fair Trading.

    I had to attend NCAT hearings a number of times last year on the one issue. The member knew zip about Strata law, what the role of the Owners Corporation or the Strata Committee were, made binding legal decisions that he himself broke at follow up hearings, allowed someone to attend a hearing having been told they lied in a previous one, and failed to really understand why I was there in the first place.

    Not good enough! Get rid of both of them.

  3. Avatar kaindub says:

    Hi Jimmy
    we have crossed paths a number of times in Flat Chat. I respect all that you do for the strata commnuity
    I read your piece and am inclined to agree with the sentiment, though not the precticalities
    Let me explain.
    In my opnimion there is a difference between what the law says and what “seems” sight. As an example, I am on a highway in the middle of the day , no other traffic about , and in a modern high performance car. i could travel safely at a speed above the posted speed limit, but I am not allowed to and if I am caught speeding, no matter what argument I put up, I will be fined.
    Thats the same with strata law. I think we all agree that some aspects of strata law leave us bewildered (what were they thinking?) But strata law governs the way we live in communities.
    Whilst perusing your page, I noticed an ad for another forum post. It basically said lawyers love people who want to fight “to be proven right”. If people adopt this attitude then it all comes down to a confrontation in court. Its the court that decides how the law is applied to a particular case , based on its facts. It doesnt matter who may or may not be harmed. (I have had several lawyers who have always advised me to solve problems outside of the court. You get a result you can live with)
    In regard to poor advice from NCAT staff. I suppose you have used lawyers in the past. They always can tell you what the law is as written. But they will always advise you that they can not be certain of the result if taken to court. The NCAT staff cant be expected to analyse every enquiry presented to them. Does every body always present the facts of their case upfront? No. We tend to emphasise the positive parts and deemphasise the negative parts. If you see the way a court works, they dig out all the facts of both parties and then make a decision.
    Having said that, there are some established principles in strata law which are well resolved and NCAT staff should be able to answer.
    But we often end up with a situation where the owner )lets say) says NCAT tole me such and such, when in fact NCAT is incorrect.
    I agree (but never having had to be in front of the tribunal) that better advice from NCAT is necessary (even if they say I dont know) . Additionally people should be encouraged in some cases to seek the advice of a lawyer. We all want free advice , but you know how valuable that is.
    Strata living does add a level of complexity to life, which none of us wants, but is a fact of life.
    An finally, in respect to the pet bylaw decision. I read the judgement handed down by the panel. The ruling was not about whether pet by laws were allowed. What they did was define what “harsh, unconscionable and discriminatory” meant in terms of strata. And they also went on to say that if the majority of owner wish to live a certain way (by making a bylaw) then they are as entitled to do so as someone who takes the contrary view.

  4. Avatar Ethicsfirst says:

    Jimmy, I like your streamlining proposal but I fear that the disputes panel you are suggesting would fall down at the first hurdle. In my experience it will be very difficult to find enough strata managers with sufficient knowledge and understanding of strata law to sit on the panel.

  5. Jimmy-T Jimmy-T says:

    With reference to Kaindub’s post, NCAT doesn’t offer advice, it refers you to Fair Trading. If you go to Fair Trading and ask what the Tribunal’s view on an issue is likely to be, they refer you to NCAT.
    I have literally told people in the A-G’s office that I have my finger poised over the “send” button, ready to post a story about how they and Fair Trading would rather pass the buck than give consumers a straight answer on any question that’s remotely tricky. That worked for me but I’m in a privileged position in that regard.
    From what I hear and read, NCAT is becoming as much of a joke as the CTTT ever was. It’s retired solicitors and old mates from local politics who are suffering relevance deprivation. Many of them are too timid to rock the boat by disagreeing with lawyers while others want to rewrite strata law to fit their own world view.
    The consequences in the cases I cited were somewhere in the region of $300,000 in legal fees just for everyone to end up where they started.
    Beyond a joke.

  6. Avatar Toretti says:

    The NCAT needs a specialist list, a cadre of members who know strata. It is not difficult to do. The simple fact is the quality of single level members is….woeful. This is important decision making not something to be farmed out to political mates.

  7. Avatar Toretti says:

    The performance of the Fair Trading Commissioner before the Parliamentary Inquiry into Building Quality was also….woeful. In fact, it was so embarrassing I was personally embarrassed for her and just died inside. The Fair Trading agency does not have the resources or skilled personnel to cate for the complex information needs of 80,000 + schemes and over a million people. It just isn’t set up or equipped to deliver this level of service. It is not the fault of the staff, but of the twenty years of de-regulation and the denigration and lack of understanding of strata ownership and strata living. In NSW, it is time to evolve to a more sophisticated analysis of strata housing and local communities, a constituency of people who deserve better and more innovative regulation. It requires us to establish an Office of Strata, a Strata Commissioner and dedicated policy, operation and communications staff to service this massive population. It is not surprise that we are buried in the rubble of FT, just like building defects and short term letting….the institutional arrangements are just not there. The FT spends more time on defending itself, and finding ten reasons why not to do something. It is time for the sector, the professional that serve it and the public sector arrangements to grow up and deliver fit for purpose of policy, and operational support.

  8. Avatar Colonel Schultz says:

    Waste of tax payers money as well

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