Voluntary payments Archives

The Supreme Court of WA decides “unfinancial” doesn’t mean powerless: owners fight back

Owning the majority of the unit entitlement in a small strata scheme does not, by itself, authorise a co-owner to sign contracts for the strata company — and unpaid levies don’t make an owner “unfinancial” if the fund they were levied for was never validly established.

In Zhao v The Owners of 5 Wimbledon Street Beckenham Strata Scheme 40695 [2026] WASC 328, the Supreme Court of WA allowed an appeal from the State Administrative Tribunal (SAT), overturning findings that had validated strata management contracts, a legal costs agreement, and an administrative fund in a two-lot strata scheme.

The scheme in question comprises just two lots. The appellants own Lot 2 (46% unit entitlement); the respondent owns Lot 1 (54%). From about July 2020 the appellants stopped paying strata levies and disputed the strata company’s management, including strata management contracts and a legal costs agreement signed only by the respondent. In August 2025 the Tribunal found against the appellants on every issue, validating those contracts and authorising the establishment of an administrative fund with retrospective effect.

The appellants, unrepresented, appealed. Despite filing the appeal 24 days late, the Supreme Court granted an extension of time, finding no prejudice to the respondent. The appellants argued that the respondent had no authority to sign the contracts, that unpaid levies did not make them “unfinancial” absent a validly established administrative fund, and that the Tribunal had no power to establish such a fund. The Supreme Court largely agreed.

The Court found that:

the respondent’s signature alone was not valid execution of the strata management contracts or the legal costs agreement, and their larger unit entitlement made no difference — the AGM resolution only authorised the council (that comprised both owners) to act jointly, and no vote by unit entitlement was ever demanded;
even where an owner is genuinely “unfinancial”, that only removes their right to vote on an ordinary resolution — it doesn’t affect council membership or their authority to execute documents; and because the by-laws didn’t require an administrative fund, the levies said to be owed were never validly raised, so the appellants were never actually “unfinancial”;
the Tribunal had no power to order the strata company to operate an administrative fund when resolving a general dispute — that requires a specific application under s 140(3) of the Strata Titles Act 1985 (WA), which was never made.

The Court granted the extension of time and leave to appeal, allowed the appeal, set aside the Tribunal’s declarations and orders, and remitted the matter to a differently constituted Tribunal for reconsideration — declining to substitute its own orders.

The key takeaway: majority unit entitlement is not a substitute for proper authorisation, and a strata company cannot treat an owner as “unfinancial” — with the voting consequences that follow — on the strength of levies that were never validly raised. Small (two-lot) schemes should ensure administrative funds, contracts and costs agreements are all put in place strictly in accordance with the Strata Titles Act 1985 (WA).

If you need advice or assistance in respect of strata company governance, contract execution, or Tribunal or Supreme Court proceedings, please do not hesitate to contact the team at our Perth office.

This article was first published on 7 September 2026 and was written by Ray Santos, Lawyer in our Perth office.

BCCM Act body corporate meetings committee conduct psychosocial hazards public nuisance Queensland strata Summary Offences Act

Nuisance in the Third Space

Body Corporate Managers are regularly abused by lot owners and even committee members — often at Body Corporate meetings, in the form of offensive, obscene, indecent or abusive language, or threatening language and gestures.

Your right to exclude the offender depends on who owns the land on which the meeting is held. The meeting location, in most cases, must be within 15 km of the scheme, and sometimes meetings are conducted on the scheme land itself.

But what happens when you can’t practically exclude the abuser — for example, where the abuser is an essential committee member, or even the Chairperson?

In modern workplace law, ‘sucking it up’ is not an option — this kind of abuse is a workplace psychosocial hazard for the body corporate manager.

When courtesy and candour don’t work, and ejection from the meeting is not an option, can something else be done?

What is the ‘third space’?

Most body corporate meetings are conducted in the ‘third space’ — a term coined by urban sociologist Ray Oldenburg for social environments separate from home (the first space) and work (the second space), where people gather, build community and find a sense of belonging. Parks, cafes, community centres and pubs can all qualify as third spaces.

While some meetings are held on scheme land, it’s rare for them to be held within a lot (a first space) unless the scheme is small. Body corporate managers often conduct meetings at their own business premises instead (a second space).

If meetings are held on site, they’ll usually be on common property — the barbecue area, poolside, or a dedicated multipurpose room — i.e. a third space. This is typical, cheap and accessible. But is there an argument for using a different third space instead?

The law is evolving

There have been important advances this year in the law of nuisance within community titles schemes. Adjudicators have decided that section 167(1)(a) of the Body Corporate and Community Management Act 1997 captures not just private nuisance but also public nuisance. Public nuisance is a creature of the common law.

This matters because traditional private nuisance is only actionable by an individual whose use and enjoyment of their land is substantially and deleteriously affected by a neighbour’s use of theirs — a private cause of action between neighbours. Bodies corporate don’t have standing in such disputes, but may gain standing where the private nuisance also amounts to public nuisance; see Il Palazzo [2026] QBCCMCmr 82 (16 March 2026) at [137].

A body corporate can take action against a lot owner or occupier whose conduct amounts to a public nuisance — one so widespread or indiscriminate that it would be unreasonable to expect one person alone to stop it, rather than the community at large taking action; see Palmhurst [2026] QBCCMCmr 88 (23 March 2026) at [49] to [53].

So section 167 of the BCCM Act could help regulate bad behaviour at meetings held in a third space (e.g. on common property) — but only where the conduct clears the bar for private nuisance, or is so offensive and widespread that it amounts to public nuisance. Both are high bars, and even if met, relief is likely to be slow, given how snowed under the Departmental Adjudicators currently are.

Is there a better way currently available?

Section 6 of the Summary Offences Act 2005 makes it an offence to commit public nuisance — including behaving in an offensive, threatening or violent way. The maximum penalty is a fine of up to 10 penalty units, or $1,727.

That rises to $4,317.50 where there are circumstances of aggravation — including committing the offence in the vicinity of licensed premises — or the Magistrates Court can impose up to 6 months’ imprisonment.

A public place means a place that is open to, or used by the public, whether or not on payment of a fee.

A breach of section 6 is a simple offence, prosecuted under the Justices Act 1886 as a summary proceeding — including privately. In other words, a body corporate can bring the prosecution itself.

Putting it into practice

Worked example: Instead of using the BBQ area, a body corporate hires a public meeting room from the local council, within 1 km of the scheme and adjacent to a licensed restaurant. The body corporate holds its general meeting there at 1 pm on a day that the restaurant is open. Lot owners attend in person or by teleconference; the meeting is recorded in audio and video. Midway through, one lot owner launches a tirade against the chairperson, the body corporate manager, and the committee — replete with references to the chairperson’s race and the manager’s religion, and ‘suggestions’ that they, and the rest of the committee, are going to pay for what they’re doing. Another lot owner tries to calm things down and is pushed back into their seat, and told to stay there or they’ll get more of the same.

This conduct could be reported to police, but doesn’t have to be for action to be taken — the body corporate can commence a private prosecution itself. The offender has acted in an offensive way (offensive, obscene, indecent or abusive language: tick) and a threatening way (threatening language: tick).

On these facts, there are up to 4 separate counts of public nuisance — the offensive language, the threatening language, the further threat to the intervening lot owner, and the physical push as violent behaviour. Each carries the maximum fine of up to $4,317.50 (given the proximity to licensed premises), so all 4 (4 × $4,317.50) could mean fines of up to $17,270, or even jail time.

Even if the Court was conservative and imposed 30% of the maximum fines available ($5,181, for example on the basis of a first offence and previous good character) it would be open to the body corporate to apply to the Court to receive half the fines ($2,590.50) when the State Penalties Enforcement Registry collects them, plus costs (noting that the scale is not very generous).

The takeaway

Departmental adjudications under the BCCM Act are becoming more common, and perhaps for that reason they are slow — and these days, an offender’s response can be drafted in a jiffy using AI. The prospect of having to go through that process is probably as fear-inducing as the threat of being beaten with a stale celery stalk.

In contrast, most people go their whole lives without being the subject of a sworn complaint, and a summons to appear for their conduct in a criminal proceeding. The offender also gets to marinate in that fear — starting from when they receive the general meeting notice, which contains the special resolution authorising their prosecution. Once the resolution is passed, the offender also gets to know exactly what their fellow lot owners think of them and their behaviour.

If your body corporate manager won’t countenance nuisance in their second space, and a meeting must be held in a third space, don’t automatically reach for the onsite, common property option. If you’ve had enough of a disruptive lot owner or committee member and want to send a clear message outside their comfort zone, consider the alternative.

Need help? If your body corporate is dealing with this kind of behaviour, get in touch.

This article was first published on 2 September 2026. It’s written by Michael Kleinschmidt, Legal Practitioner Director from our Sunshine Coast office.

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SAT decides who pays to fix a non-compliant balcony

Lot owners — not the strata company — generally bear the cost of rectifying non-compliant alterations within their own lot, even where the alteration was made by a previous owner decades earlier.

In The Owners of Kingsway Gardens (Strata Scheme 4) and Wilkinson [2026] WASAT 94, the State Administrative Tribunal (SAT) considered a dispute over an enclosed balcony in one of Perth’s oldest strata schemes. The particular question was: Who is responsible for making the balcony compliant with current fire-safety standards?

Kingsway Gardens is a 75-lot strata scheme in West Perth, registered in 1968. A fire-compliance review identified 37 non-compliant balconies across the scheme. All owners except Mr and Mrs Wilkinson, the owners of Lot 9, either rectified their balcony or gave an undertaking to do so. The strata company applied to SAT seeking orders requiring Mr and Mrs Wilkinson to bring their balcony into compliance with the National Construction Code (NCC), or reinstate it to its original condition, at their own cost.

Mr and Mrs Wilkinson argued that the strata company should bear those costs, relying on an email in which the strata company insurance broker told the insurer that the “council” had agreed to pay for the rectification work. SAT rejected this argument, finding that this representation was conditional on the insurer agreeing to renew cover — not an unconditional promise to pay.

The SAT found that:

· the balcony (and its enclosure) sits wholly within the boundary of Lot 9, and is not common property;

· despite extensive searches going back to 2016, no building licence or approval could be found for the balcony’s enclosure, which was built by a previous owner sometime between 1968 and 2015;

· without that approval, the alteration is “unauthorised work” under the Building Act 2011 (WA), meaning it must now meet current NCC fire-separation requirements rather than the lesser standards in force when the work was actually done; and

· because the balcony forms part of the lot rather than common property, the strata company has no power — and no obligation — to fund the rectification work. That cost falls on the current lot owners.

SAT ordered Mr and Mrs Wilkinson to reinstate the balcony to its original condition within 90 days, at their own cost, including obtaining any necessary approvals from the City of Perth.

The key takeaway: liability for non-compliant work within a lot follows the lot, not the person who caused it or the strata company — a current owner can be left to fix and fund a defect they didn’t create, and informal assurances to an insurer won’t easily shift that burden elsewhere.

If you need advice or assistance in respect of strata company balcony compliance, insurance obligations, or SAT proceedings, please do not hesitate to contact the team at our Perth office.

This article was first published on 26 August 2026 and was written by Ray Santos, Lawyer in our Perth office.

Building defects

What is a Building Defect? Melbourne Property Owner’s Guide

Building defects can have significant financial and operational consequences if not addressed early.

Obtaining timely legal advice can help protect both individuals and Owners Corporations, while informing the most appropriate path to rectification or recovery.

Bugden Allen advises on building defect inspections in Melbourne, offering support across all aspects of building defect matters.

Whether the issue involves water ingress, structural cracking, defective cladding or non-compliant building work, our aim is to help resolve defects as early as possible.

We offer specialist legal advice across the property lifecycle, including all levels of building defect matters.

In this article, we discuss the definition of a building defect, along with some of the specific issues you may come across and what they mean for you.

What is a Building Defect? Understanding the Basics

A building defect is a fault, deficiency or non-compliance in building work that affects the quality, safety, functionality or value of a building.

Defects can be structural or non-structural, and may arise from defective design, workmanship, materials or non-compliance with applicable building legislation, the National Construction Code, Australian Standards or the terms of the building contract.

Building defects can range from relatively minor cosmetic issues through to serious structural failures or safety concerns.

They may become apparent shortly after construction is completed or develop over time as the building ages or is exposed to environmental conditions.

In Victoria, homeowners, Owners Corporations and other eligible parties may have legal rights to pursue builders and other responsible parties where defective building work has occurred.

In many cases, legal action for defective building work can be commenced within 10 years of the date the occupancy permit is issued, the certificate of final inspection is issued, or the building work is completed.

This will depend on the circumstances of the claim and the applicable legislative framework.

Building defect disputes can involve breaches of statutory warranties, contractual obligations, the Building Act 1993 (Vic), or non-compliance with the National Construction Code.

Determining the cause of a defect, identifying the responsible parties and understanding the available legal remedies often requires both technical and legal expertise.

There are numerous variables to consider legally when addressing any type of building defect.

These can determine who is responsible for rectification, who can bring a claim, and which parties may be liable.

Bugden Allen works alongside building consultants and other technical experts to understand the nature of a defect and its legal significance.

Building Defect Categories & Common Building Defects in Australia

Building defect matters can arise from a wide range of structural or non-structural issues affecting residential, commercial and mix-use developments. While every matter is unique, some of the more common building defects we encounter include:

Structural defects: faults affecting load-bearing elements such as foundations, slabs, columns, beams, retaining walls and roof framing.
Waterproofing defects: failures in waterproofing systems, membranes, flashings or seals that result in water ingress, moisture damage, timber decay, corrosion or mould growth.
Building service defects: defects involving electrical, plumbing, gas, fire safety or mechanical systems that affect the safe operation of the building
Building envelope defects: issues affecting roofs, windows, cladding, balconies, façades and external walls that allow water penetration or compromise the building’s performance.

In many cases, multiple defects are interconnected.

For example, a waterproofing failure may lead to structural deterioration, corrosion or mould growth, while inadequate structural design can result in movement that causes cracking and water ingress.

Identifying the underlying cause of a defect often requires an investigation by independent building consultants or engineers before legal liability can be properly assessed.

Building Defect Liability Period

In Victoria, building work must comply with the Building Act 1993 (Vic), the Building Regulations 2018 (Vic), the National Construction Code (NCC) and the relevant Australian Standards.

Where building work fails to meet these requirements, it may constitute defective or non-compliant building work and give rise to a range of legal remedies.

The timeframe for pursuing a building defect claim depends on the nature of the defect, the legal basis of the claim and the legislative framework that applies.

In many cases, domestic building claims can be brought within 10 years of the date of the occupancy permit, certificate of final inspection or completion of the building work, although different statutory regimes and limitation periods may apply depending on the circumstances.

Where defective work involves a failure to comply with the NCC or other applicable building standards, property owners may have access to regulatory remedies through the Building and Plumbing Commission (BPC).

This includes inspections and rectification orders where appropriate.

The introduction of Victoria’s Home Warranty Insurance Scheme on 1 July 2026 has also changed the insurance framework for eligible domestic building claims where a builder has passed away, disappeared or become insolvent.

Bugden Allen can help identify which regime applies to your specific matter, and who you should be engaging with regarding your building defects.

Every case is different, so it’s important to gather all the necessary information before taking legal action.

Reach out to us today.

Building Code Violations & Compliancy Issues

Building code violations and non-compliance issues occur when work falls below implied warranty standards or breaches the Building Act 1993 (Vic) or the National Construction Code (NCC).

These typically require distinct legal resolution pathways, depending on the complexity of the matter.

Common code violations include:
Waterproofing failures
Fire safety non-compliance
Structural inadequacy
Ventilation and energy inefficiency

In Victoria, the legal pathways for non-compliance issues and code violations can involve any of the following:

Building and Plumbing Commission (BPC): the primary regulatory body responsible for issuing formal rectification orders.
Relevant Building Surveyor (RBS): responsible for inspecting mandatory construction stages.
Victorian Civil and Administrative Tribunal (VCAT): where builders refuse to rectify issues, property owners can escalate matters to VCAT.

Difference Between Defects & Non-Compliance

Aspect	Non-Compliant Building Work	Standard Building Defect
Definition	Building work that does not comply with the requirements of the Building Act 1993 (Vic), the National Construction Code (NCC), relevant Australian Standards, approved plans or permit conditions.	A fault, deficiency or failure in the building works that affects the quality, safety, functionality or intended performance of a building.
Legal basis	Assessed against prescribed legislative and regulatory requirements.	Assessed against the contractual obligations, accepted building practices, statutory obligations and the standard expected of a competent building practitioner.
Cause	Failure to comply with the applicable building legislation, code, permits or approved documentation. Deviation from code requirements, unapproved variations, or work completed without required permits/approvals	Defective design, poor workmanship, unsuitable materials, construction errors or inadequate supervision.
Overlap	Non-compliant building work is often defective, but this is not always the case.	A building defect may exist even where the work complies with the NCC or other regulatory requirements.
Example	Combustible cladding installed contrary to NCC fire performance requirements or work completed without the required building approval.	A waterproofing failure resulting in water ingress despite the original design complying with the applicable building standards.
How it’s identified	Building surveyor inspections, compliance audits, expert reports or comparison against approved plans, permits and the NCC.	Building inspections, engineering assessments, destructive testing or defects becoming apparent over time through cracking, movement or water ingress.
Typical remedy	Rectification to achieve compliance, regulatory action or rectification orders issued by the Building and Plumbing Commission.	Rectification, damages or other remedies available under contract, statute or common law
Relevant claim	Claims or regulatory action under the Building Act 1993 (Vic) and related legislation.	Claims arising under contract, statutory warranties, negligence or other applicable causes of action.

The key distinctions between non-compliance and building defects are important to be made aware of, as the two concepts are related but not identical.

Non-compliance focuses on whether building work meets the requirements of the Building Act 1993 (Vic), the National Construction Code and other legislative standards.

A building defect is a broader concept, referring to work that is faulty, unsafe or not fit for its intended purpose.

In practice, many building defect disputes involve both defective and non-compliant work.

However, it is possible for building work to be non-compliant without causing an obvious defect, or for a defect to arise even where the work technically complies with the applicable codes and standards.

Understanding the distinction is essential when determining liability, identifying the responsible parties and selecting the appropriate legal pathway for resolving a building dispute.

Seeking legal advice on a building defect claim can help you identify the best path forward.

Identifying Building Defects in Melbourne Properties

Building defects are not always immediately apparent.

While some issues become obvious shortly after construction is completed, others may take months or even years to emerge as the building settles or is exposed to weather and everyday use.

Some common signs of a potential building defect include:

Cracking in walls, ceilings or foundations
Doors and windows that stick or no longer close properly
Uneven floors
Roof leaks or water ingress
Water stains, dampness or mould

At Bugden Allen, we recommend engaging a licensed professional to carry out a comprehensive investigation.

We can assist you throughout this process and guide you through the next steps if a defect is identified.

Building Defect Inspection Process

Step	Action
1. Document & Assess	Gather all relevant documents, including the building contract, approved plans, specifications, occupancy permit or certificate of final inspection, warranties and any correspondence. Engage a registered building practitioner, engineer or independent building consultant to inspect the property and prepare a report identifying the defects and any non-compliance with the Building Act 1993 (Vic), the National Construction Code (NCC) or applicable Australian Standards.
2. Notify the Builder	Notify the builder of the alleged defects in writing. Include the expert report, supporting photographs and a reasonable opportunity for the builder to inspect the property and rectify the defects. Maintaining clear records of all correspondence is essential should the dispute escalate.
3. Lodge a Complaint / Seek Dispute Resolution	If the builder refuses to rectify the defects or the dispute cannot be resolved, the matter may be referred to the Building and Plumbing Commission (BPC). Depending on the circumstances, the BPC may facilitate dispute resolution, investigate the complaint or exercise its statutory powers, including issuing rectification orders where appropriate.
4. Escalate to VCAT	Where the dispute remains unresolved, a claim may be commenced in the Victorian Civil and Administrative Tribunal (VCAT) or another court of competent jurisdiction, depending on the nature of the dispute. VCAT may make legally binding orders requiring rectification works, payment of damages or other appropriate relief.

Who is Responsible for Fixing Building Defects in Melbourne?

Typically, the licensed builder who signed the original building contract is responsible for fixing building defects.

This applies to both standalone houses and multi-unit complexes.

However, who is responsible for coordinating repairs can depend on the type of property and whether the defect affects common or private property:

Houses and townhouses: The original builder is responsible for defects in the property.
Common property in apartment buildings: The Owners Corporation is responsible for coordinating repairs, and can pursue the original builder where the defect falls within the statutory liability period.
Private lots within apartment buildings: Individual lot owners are generally responsible for defects within their own lot, though they may still have a claim against the original builder.

Reach out to us at Bugden Allen if you’re unsure which category your property falls under, or if disputes arise within the Owners Corporation.

We have extensive experience working alongside Owners Corporations on building defect matters, and can guide you towards an equitable resolution.

What Should You Do When Defective Building Works are Identified?

When defective building work is identified, an Owners Corporation and/or lot owners should act promptly to understand the nature and extent of the problem and protect its legal position.

The first step is to document the defect carefully. This may include photographs, a detailed description of the issue, relevant plans and reports, and records of previous repairs or correspondence.

Depending on the nature of the defect, it may also be appropriate to obtain advice from a building consultant, engineer or other technical expert before rectification work is undertaken.

For Owners Corporations, there may be additional considerations.

It is important to determine whether the defect affects common property, a private lot or shared building infrastructure, as this can influence responsibility for rectification, the Owners Corporation’s obligations and who may be entitled to pursue a claim.

The builder or other relevant party should generally be notified of the alleged defects in writing and given an appropriate opportunity to respond.

Legal advice at this stage can assist with preserving evidence, coordinating experts, identifying potentially responsible parties and ensuring that any applicable limitation periods or procedural requirements are considered.

Where a dispute cannot be resolved directly, it may be necessary to engage with the Building and Plumbing Commission (BPC) or another applicable dispute resolution process before proceedings are commenced.

If the dispute remains unresolved, the matter may ultimately proceed to VCAT or another appropriate forum.

Obtaining legal advice early can help an Owners Corporation or lot owner understand the available options and develop an appropriate strategy for investigation, rectification and, where necessary, recovery.

When to Hire a Building Defect Lawyer?

Building defects may become apparent during or shortly after construction. In some cases, however, issues may not emerge until years later.

Persistent water ingress, recurring cracking, waterproofing failures or problems affecting common building services are often the first signs that further investigation is warranted.

When defects are identified, it is important to understand not only what has gone wrong, but who is responsible and what steps should be taken next.

An Owners Corporation may need to investigate and preserve evidence of defective work while also meeting its obligations to repair and maintain common property.

Obtaining legal advice early can help to:

Determine whether the defect affects common property, a private lot or shared building infrastructure
Understand responsibility for repair and rectification
Identify the scope and location of defects
Coordinate building consultants, engineers and other experts
Preserve evidence while necessary repairs are undertaken
Identify potentially responsible parties and available claims
Assess applicable limitation periods
Engage with builders, developers, consultants and insurers from an informed position.

Early legal advice doesn’t mean litigation is inevitable.

In many cases, it enables you to make informed decisions during the defect recovery process while continuing to meet your obligations to lot owners.

Contact Bugden Allen for personalised support and advice on your building defect matter.

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