Dispute Resolution procedures in the Owners Corporations Act

The Supreme Court considered the meaning of dispute resolution procedures set out in Part 10 the Owners Corporations Act 2006 and the implications of not following those procedures prior to filing proceedings in the Tribunal in Shearman v Owners Corporation No 1 417405Y [2016] VSC 551.   

The decision confirms that a failure to follow dispute resolution procedures in the Act does not deprive the Tribunal of the ability (or jurisdiction) to hear and determine an application but it is a factor to be considered by the Tribunal in deciding whether to exercise its discretion to dismiss or strike out the application.

The owners corporation did not have an obligation to comply with the dispute resolution procedures under the Act because the lot owner had not activated that process by making a complaint.  The practical effect of this is that where a potential breach of the Act comes to the owners corporation’s attention, the owners corporation can apply straight to VCAT for orders relating to the breach so long as no complaint has already been made by a lot owner, occupier or manager to the owners corporation about the alleged breach.

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