Dispute resolution for schemes

What is a scheme dispute?

The types of disputes which might be dealt with by SAT for community schemes are listed below.

• A dispute between scheme participants about:
  • The community development statement.
  • The scheme documents, including the validity of scheme by-laws.
  • The performance of, or the failure to perform, a function conferred or imposed on a person by the Act or scheme by-laws.
  • An alleged contravention of the Act (other than an offence).
  • A resolution or decision of a community corporation or the council of a community corporation, including its validity.
  • The appointment or election of a member of the council or an officer of a community corporation, including its validity.
  • Any other matter arising under the Act or the scheme by-laws.
• A dispute between an applicant for the registration of a community titles scheme or amendment of a community titles scheme and a person whose consent to the application is required, or who may object to the application, relating to the consent or objection.
• A dispute between a person (other than the Western Australian Planning Commission or a local government) and the community corporation regarding that person’s refusal to provide approval or consent to amend or repeal certain scheme by-laws (other than exclusive use by-laws), in circumstances where their approval or consent is required.
• A dispute between an infrastructure owner and a community corporation about a matter connected with a common property infrastructure easement.
• A dispute between an original subdivision owner and a community corporation about a matter arising under Part 6 of the Act (Original subdivision owner).
• A dispute between an applicant under section 94 and the community corporation about a matter arising under Part 8 Division 1 Subdivision 6 of the Act (Provision of information).
• A dispute between a scheme manager, or former scheme manager, of a community corporation and the community corporation about:
  • A matter arising under Part 9 of the Act (Scheme managers).
  • The scheme management contract.
  • The performance of, or the failure to perform, a function conferred or imposed on the scheme manager.
• A dispute between a buyer or prospective buyer of a lot in a community scheme and the seller of the lot about a matter arising under Part 10 of the Act (Protection of buyers).
• A dispute of a class specified in the regulations.

Who is classified as a scheme participant?

The State Administrative Tribunal has the power to resolve scheme disputes between scheme participants.

Scheme participants are defined in the Act as:

• A community corporation in the community scheme.
• A person who is appointed as an administrator of a community corporation in the community scheme.
• A member of a community corporation in the community scheme.
• The occupier of a lot in the community scheme.
• The registered mortgagee of a lot in the community titles scheme.
• A member of the council of a community corporation, or an officer of a community corporation, in the community scheme, who is not a member of the community corporation.

SAT's procedures relating to community corporations

The State Administrative Tribunal may authorise a member of a community corporation in the scheme to make an application on behalf of the community corporation, if it finds that a community corporation has unreasonably refused to make an application to SAT.

SAT can also authorise expenditure from a fund of the community corporation to be used for legal advice and/or legal action for the proceedings.

Each member of the community corporation, each mortgagee of a lot who has given written notice of the mortgagee’s interest to the community corporation and occupier, that would be affected by a SAT order, is entitled to a copy of the notice of an application to SAT to which the community corporation is a party. If the applicant is not the community corporation, the obligation to provide the copy or notice of an application falls on the community corporation rather than the applicant.

Dismissing an application

SAT may dismiss an application brought under the Act using its powers under section 47 of the State Administrative Tribunal Act 2004 (SAT Act) if it believes the proceeding is:

• frivolous, vexatious, misconceived or lacking in substance
• being used for an improper purpose, or
• an abuse of process.

The Act provides that SAT may also use its power under section 47 of the SAT Act to dismiss an application under the Act:

If it is satisfied that:

• The nature and gravity of the dispute is such that it is reasonable to expect the parties to resolve the dispute without referral to SAT.
• The purpose of the application is to harass or annoy, or to cause delay or detriment, or is otherwise wrongful.

If it is not satisfied that:

• The nature of the dispute is more than trivial and warrants recourse by the applicant to SAT.
• The applicant’s interest in the matter is more than trivial and warrants recourse by the applicant to SAT.

Summary decision

The State Administrative Tribunal may make a final decision in proceedings under the Act at a directions hearing if it considers that appropriate.

Declarations SAT can make

The State Administrative Tribunal may make a declaration concerning a matter in the proceeding.

Without limitation, SAT may make a declaration that:

• A specified person has or has not contravened a specified provision of the Act or the scheme by-laws.
• A specified scheme by-law is or is not invalid.
• A specified decision or resolution of a community corporation is or is not invalid.
• A specified appointment or election of a member of a council of a community corporation, or an officer of a community corporation is or is not invalid.
• A settlement date for a contract for the sale and purchase of a lot was, or was not, validly postponed under the Act
• A contract for the sale and purchase of a lot was, or was not, validly avoided under the Act.

Only a legally qualified member of SAT (or a Tribunal made up of a legally qualified member and other members) can make a declaration.

Orders SAT can make

Without limitation, the orders SAT may make include:

• Requiring a scheme document to be amended in a specified manner.
  
• Requiring a structural element by reference to which a lot in a community titles (building) scheme is defined to be reinstated following its damage, destruction, or removal.
• Determining the form and location of utility conduits to provide specified utility services subject to a utility service easement.
• Requiring an original subdivision owner to pay a specified amount to a community corporation, being the whole or a part of the remuneration or the value of a benefit that the original subdivision owner failed to disclose as required under the Act.
• Determining action that must be taken or refrained from being taken by a member of a community corporation under the Act.
• Authorising a specified person to convene and preside at a general meeting of a community corporation:
  • As the first annual general meeting.
  • To appoint or elect members of the council or officers of the community corporation.
  • For some other specified purpose.
• Order authorising a specified person to convene and preside at a meeting of the council of a community corporation:
  • To appoint or elect officers of the community corporation.
  • For some other specified purpose.
• Removing a specified person from office as a member of the council of a community corporation or as an officer of a community corporation
• Appointing a specified person as a member of the council of a community corporation or as an officer of a community corporation to replace a person removed from office.
• Varying or terminating a scheme management contract.
• Requiring a scheme manager to pay a specified amount to a community corporation, being the whole or part of the remuneration or the value of a benefit that the scheme manager failed to disclose to the community corporation.
• Requiring a community corporation to take specified action or to refrain from taking specified action in the performance or exercise of its functions, including orders to:
  • Sell or acquire real or personal property.
  • Enter into, vary or terminate a contract, including a contract for services or amenities to the community corporation or its members.
  • Pursue an insurance claim.
  • Vary the amount of insurance cover.
  • Allow the keeping of an animal on specified conditions or prohibit the keeping of an animal on a lot or common property.
• Requiring a person to take or refrain from taking specified action to remedy or prevent further contraventions of the Act, scheme by-laws or scheme management contract.
• That the community corporation is taken to have passed or not to have passed a specified resolution required under the Act or the scheme by-laws as an ordinary resolution or special resolution.
• Requiring a party to the proceedings to pay money to:
  • A person specified in the order by way of compensation for any pecuniary loss or damage suffered.
  • Another party to a contract for the purpose of adjusting the position or rights of the parties consequentially on the termination or variation of the contract under the order.
• If a declaration is made that a contract for the sale and purchase of a lot was validly avoided under the Act, requiring a person who is holding a deposit or other moneys in trust to pay the deposit or other moneys to the former buyer
• Appointing an administrator of a community corporation (being a person who has given written consent to the appointment) to perform some or all scheme functions.

If an order made by SAT is inconsistent with the scheme by-laws, the order prevails to the extent of the inconsistency.

Interim orders of SAT

The State Administrative Tribunal may make an interim order if it is satisfied the urgency is justified. An interim order remains in force for the period specified in the order (not exceeding three months) and may be renewed by a further order of SAT for subsequent periods (not exceeding, in any case, three months).

Judicial or legally qualified member

The power of SAT to make an order is exercisable only by a judicial member (or by the Tribunal made up of a judicial member and other members) if the order:

• Affects a title to land.
• Is an order confirming a termination resolution under the Act.
• Is of a class required by the regulations to be made by a judicial member.

Limitations on orders

On a proceeding under the Act, SAT cannot make an order:

• Requiring a community development statement to be amended.
• Requiring an amendment to the schedule of unit entitlements, unless it is satisfied that if unit entitlements were to be allocated at the time of the order the schedule of unit entitlements would require amendment.
• That the community corporation is taken to have passed a resolution for:
  • Termination of the scheme.
  • Fixing or varying contributions unless satisfied that the contributions fixed by the community corporation are inadequate or excessive.
  • Fixing or varying the interest rate applicable to contributions unless satisfied that the interest rate fixed by the community corporation is unreasonable.
  • Determining arrangements for payment of contributions in instalments unless satisfied that the arrangements allowed by the community corporation are unreasonable.
• That the amount of insurance cover be varied unless satisfied that the amount is inadequate or excessive.
• To allow or prohibit the keeping of an animal unless satisfied that the community corporation has acted unreasonably.
• For compensation for personal injury or death.
• For the payment of money to resolve a dispute between a buyer or prospective buyer and the seller of a lot about a matter arising under Part 10 of the Act (other than to order repayment of the deposit or other money).
• Make an order in circumstances prohibited under the regulations.

Administrator of community corporation

An order of the State Administrative Tribunal appointing an administrator of a community corporation may specify conditions of appointment, such as limiting the functions the administrator is authorised to perform.

If an administrator is appointed, no person other than the administrator may perform a function that the administrator is authorised to perform. The performance of the function has the same effect as if carried out by the person who would have been entitled or required to perform the function if the order had not been made.

The State Administrative Tribunal may vary or revoke the appointment of an administrator.

An administrator of a community corporation appointed by SAT must, after performing a function under the order:

• Make a written record specifying the function and the manner of its performance.
• Serve the record on the community corporation.

Contributions for money payable by community corporation

If SAT makes an order that requires a community corporation to pay money on the application of a party to the proceedings or on its own initiative, it may:

• Direct that the money (and any expenses and costs of making the payment) must be paid out of contributions levied in relation to the lots or tier parcels and in the proportions, specified in the order.
• Direct the community corporation to levy contributions in accordance with the order.
• Prohibit the community corporation from levying a contribution that would be payable by another party to the dispute.

Enforcement of order to act

If SAT is satisfied that an order to act has not or has been only partially complied with by the person to whom the order was given, it may:

• Vary, revoke or substitute the order to act.
• Make an order that the person, to whom the order to act was given, pay the applicant money as compensation for the failure to act or refrain from acting.

Internal review of orders or declarations

If SAT makes an order or declaration without a judicial member and the order or declaration is of a class specified in the regulations to be made by a judicial member, a party to the proceeding may apply for internal review of the order or declaration.

However, an application for this kind of review can only be made if:

• leave is given by SAT, and
• the application is made within 28 days after the order or declaration is made, or within an extension of that period given by the President of the State Administrative Tribunal.

An internal review of an order or declaration requires SAT to consist of:

• a judicial or senior member who is a legally qualified member, and
• other such members, if any, as the President of the SAT considers appropriate.

On an internal review of an order or declaration, SAT may affirm, vary, or set aside the order or declaration and substitute it with another.

Ordering a person to act for lot owner

SAT may make orders where the owner of a lot cannot be located or the owner lacks capacity to vote or consent to a matter.

These orders can be to:

• Dispense with the requirement for the owner to vote or consent on a matter.
• Authorise the Public Trustee under the Public Trustee Act 1941 or another specified person (with that person’s consent) to exercise all or specified powers of the person under the Act as the owner of a lot.