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Be careful – Wrong jurisdiction means you can win, but still loose

The Supreme Court has recently ordered a lot owner who succeeded in litigation against an owners corporation to pay the owners corporation’s costs because the dispute between the parties could have been dealt with by NCAT. This is one of the first times a litigant has been punished by an adverse costs order for approaching the Supreme Court for relief which could have been given by NCAT. (EB 9 &10 Pty Ltd -v- The Owners – SP 934 [2018] NSWSC 464. )

Normally, the loser of a court case is ordered to pay the legal costs of the winner. This is the usual rule that applies to most litigation. However, in this case, the Supreme Court took a different approach. Even though the owners corporation lost the case, the Court ordered the lot owner to pay the owners corporation’s costs.

The strata legislation gives the NSW Civil and Administrative Tribunal (NCAT) broad power to resolve Strata disputes. This means that NCAT is able to make orders to resolve most types of strata disputes including disputes between lot owners and owners corporations. This reflects the intention of the NSW Parliament that NCAT should sort out most strata disputes, not the Supreme Court.

Development Bond Information

Developers are required to lodge a 2% bond for residential and mixed-use high-rise strata buildings of 4 or more storeys.

The proposed amendments to the building bond is to enhance the ability of the Department of Fair Trading to verify the building contract price (which is the basis of the bond) and to clarify the role of the building inspector in the scheme.

Below are the proposed amendments:

  • Developers must lodge a building bond before applying for the occupation certificate.
  • The owners corporation and the developer must agree on the amount to be released from the bond to meet the costs of fixing identified building defects.
  • New powers for the Department of Fair Trading which will enable the verification of the amount of the contract price or building bond.
  • New entry to premises and search warrant powers.
  • An increase in the maximum penalty for failing to lodge the building bond from $22,000 to $1.1 million.
  • An offence for to provide false / misleading information to the Secretary in relation to the contract price or the building bond.
  • New ‘good faith’ liability protection for building inspectors, and the professional associations that appointed them, which excludes them from liability for anything done or omitted to be done in ‘good faith’ in conducting an inspection.

To see more information on the Regulations Amendment, use the link below:

http://www.fairtrading.nsw.gov.au/biz_res/ftweb/pdfs/About_us/Have_your_say/Strata_building_bond_and_inspections_scheme_Regulation_amendments_table.pdf

Please also view the Department of Fair Trading for even more information.

http://www.fairtrading.nsw.gov.au/ftw/About_us/Have_your_say/Strata_Building_Bond_and_Inspections_Scheme.page

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