This week’s blogpost is contributed by Mark Atkinson, legal specialist in Strata Law. Visit Atkinson Legal for more information or to make contact.
The appointment of an administrator to a strata company pursuant to Section 102 Strata Titles Act 1985 is a drastic remedy of last resort.
The State Administrative Tribunal will be reluctant to appoint an administrator if it believes that the strata company is “endeavouring to address necessary issues confronting the strata company”: Huning and the Owners of Glengarry 240 Mill Point Road, South Perth, Strata Plan 2684 [2010] WASAT 40. Only if it is clear to the Tribunal that the strata company is refusing, failing or unable to carry out its functions, will the Tribunal consider appointing an administrator.
Consequently, most cases before the Tribunal involve a dispute as to whether or not an administrator should be appointed. Given that this is a remedy of last resort, the Tribunal has appointed an administrator on only three occasions.
The recent Tribunal decision of The Owners of 43 Kinsella Street Joondanna Strata Plan 14493 and Sjepcevich [2014] WASAT 15 concerned lot owners who agreed that an administrator should be appointed. That was where any agreement ended. The lot owners disagreed as to who should be appointed and the period of appointment. The parties each proposed a nominee. This gave the Tribunal an opportunity to consider the functions expected of an administrator to this strata company before deciding who would be the most suitable person to take on the role. These functions, as described by the Tribunal, were:
General administration of the scheme
Securing the services of a strata manager for the period after the lapse of the administrator’s appointment
Obtaining records of expenditure and the auditing of books
Consideration of legal proceedings, including the validity of contracts and resolutions and
Management decisions for the short, medium and long-term.
In this decision, the administrator chosen from the nominees was given plenary powers as provided for in Section 102(2)(a). The term of appointment, remuneration and an indemnity were also included in the orders.
If the appointment of an administrator looks inevitable, strata companies should endeavour to at least agree on a proposed administrator. As the Tribunal said this should be someone who is
“suitable, qualified, a specialist in the strata title field, and independent to the dispute.”
This was the case in Hockey & Anor and Owners of Mount Bakewell Resort Strata Plan 18228 [2013] WASAT 64 where the Tribunal found that the strata company had become so dysfunctional that it was clear that an administrator was needed. The applicants proposed that Mark Atkinson of Atkinson Legal be appointed as administrator. The Tribunal decided that Mark Atkinson was “eminently well qualified and suitable for appointment as administrator based on his legal qualifications and experience in the strata industry.”
Atkinson Legal specialises in strata law and are well equipped to answer the many issues raised by owners, strata companies and their councils, managers and sales agents. Seek advice early to avoid the problems experienced by these strata companies.