144. 5 highlights from 2018


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One Reply to “144. 5 highlights from 2018”

  1. Just been listening to the best of 2018 and noted the revisit of the donation issue.
    My particular OC has for many, many, years been passing motions to donate to charity, i.e. the Westpac helicopter, the RFS and the SES.
    In all it is no large amount but the bottom line is the legislation implies these types of motion cannot be validly passed.

    Extract from draft NCAT submission on the issue (1996 version of the Act)
    Donating money to third party entities, including charity and non-profit organisations cannot be considered as a legitimate expenditure of the owners corporation which could be estimated under ss 75(1) and 75(2) (quoted above in paragraph 23). Therefore, since ss 68(1)(a) and 71(1)(a) of the Strata Schemes Management Act prohibit moneys being paid out of the administrative and sinking funds respectively if they were not “payments of the kind for which estimates have been made under section 75” (subsections (1) and (2) thereof respectively), such donations cannot be paid out of the owners corporation’s funds as they could not be authorised to be estimated under ss 75(1) and 75(2).

    As well, the making of such donations is not an incident of an exercise of any of the functions of the owners corporation under the Strata Schemes Management Act and therefore the expenditure of the donations cannot be authorised under s 68(1)(d). There is no other provision in the Strata Schemes Management Act which could authorise the expenditure contemplated.

    Case law included such matters as:
    Humphries v Proprietors Surfers Palms North Group Titles Plan 1955 (1994) 179 CLR 597 at 613 (McHugh J):

    Lawson & Clarke v Owners Corporation SP 61788 (Strata & Community Schemes) [2011] NSWCTTT 270 (27 June 2011):

    In APX Projects Pty Limited v The Owners – Strata Plan No. 64025 [2015] NSWSC 1250

    This brings us to the question of the capacity of by laws to ‘circumvent’ the Act and to complement or supplement the Act.

    At this point I would ask have you read Cathy Sherry, Strata Title Property Rights: Private Governance of Multi-Owned Properties, Routledge, London, 2017, 320pp ?

    As much as the legislation needs to be more fluid in some areas by laws are not the answer to problems that come back to deficiencies in the legislation.

    Personally I think a donation by law would be contrary to the purpose of the Act, at the very least it would be supplemental which is not the purpose of delegated legislation.

    Complement / Supplement
    Dixon CJ, Williams, Webb & Fullagar JJ … such a power (to make regulations) will not support attempts to widen the purpose of the Act, to add new and different means of carrying them out or to depart from or vary the plan which the legislation has adopted to attain its ends …
    … the objection is that the regulation is an attempt not to complement but to supplement the plan of the legislation … it is not confined to the same field of operation as the provisions of the Act
    Shanahan v Scott (1957) 96 CLR 245 High Court of Australia

    Supplement: something that is added to something else
    Complement: a thing that contributes extra features

    My suggestion to my OC has been if you want to donate to charity then pass a hat around because it is not for a OC to tell owners who they will donate money to and how much, even if the decision at the time is unanimous.

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