Owners corporations often enter into contracts with third parties for provision of services to the owners corporation and to the lot owners. A dispute may arise relating to non-performance or sub-standard performance by the third party service provider. Listed below is a step by step guide on dealing with such disputes.
Step 1
Send a lawyer’s letter of demand to the third party. There are no rules as to the content of such a letter. They can be tailored to the particular circumstances. The assistance of a solicitor will be required.
Step 2
If payment is not made, issue proceedings in the appropriate Court or Tribunal. Depending on the facts of the case, the type of claim and amount of the claim, the appropriate Court or Tribunal may be VCAT or Magistrates, County or Supreme Court. A special resolution will be required before proceedings can be issued (section 18(1) of the Owners Corporation Act). The assistance of a solicitor will be required.
Step 3
How long the application is heard after it is issued will depend upon the type of application made and the Tribunal or Court in which it is to be heard.
Step 4
There are likely to be many steps in the lead up to the hearing. These may include discovery of documents, better particularisation of the claim and mediation. The OC will require the assistance of lawyers.
Step 5
At the hearing orders will be made which may include payment of the monies owed. The OC will require the assistance of solicitors.
Step 6
If payment is still not made, enforcement proceedings will be required. Again, the assistance of a solicitor will be required.
If the lot owner is an individual the options are:
- Attachment of earnings;
- Bankruptcy application; or
- Warrant to seize chattels or real estate.
This will require the issue of further proceedings in the Magistrates, County, Supreme or Federal Court depending on the enforcement proceeding selected.
If the lot owner is a corporation the options are:
- the service of a creditor’s statutory demand for payment of a debt followed by an application to wind-up the lot owner and appoint a liquidator; or
- Warrant to seize chattels or real estate.
This will require the issue of further proceedings in the Supreme or Federal Court depending on the Enforcement proceeding selected.
More information
For more information, please contact Anton Block, Principal Lawyer and Head of Owners Corporation, on (03) 8600 8833 or ablock@kcllaw.com.au.
Note: This update is a guide only and is not intended to constitute legal advice.