Understanding Jurisdiction in Owners Corporation Disputes: Recent Decisions Explained

Owners Corporations (OCs) play a vital role in managing shared property and ensuring smooth operations within subdivisions. However, disputes often arise when lot owners fail to pay fees and charges levied by the OC. A critical question in such cases is: which forum has jurisdiction to resolve these disputes?

Recent decisions in Owners Corporation v Buckley [2024] VMC 12 and Owners Corporation v Nguyen & Ors [2025] VMC 12 have clarified this issue, with significant implications for OCs and lot owners alike.

The Legal Framework: Owners Corporations Act 2006 (Vic)

The Owners Corporations Act 2006 (Vic) (OCA) governs the management, powers, and functions of owners corporations in Victoria. It also provides mechanisms for resolving disputes, including recovery of unpaid fees and charges from lot owners.

Key provisions include:

Section 30(1): Grants OCs the general power to recover money owed in any court of competent jurisdiction.

Section 30(2): Specifies that recovery of money owed by lot owners is subject to sections 31, 32, and Division 1 of Part 11, which refer exclusively to the Victorian Civil and Administrative Tribunal (VCAT).

Division 1 of Part 11: Outlines VCAT’s jurisdiction and powers in resolving owners corporation disputes, including mandatory considerations of fairness, oppressiveness, and prejudice.

Case 1: Owners Corporation v Buckley [2024] VMC 12

In this case, the Magistrates’ Court was asked to determine whether it had jurisdiction to hear claims by an OC to recover unpaid fees from a lot owner. The OC argued that it could bring proceedings in the Magistrates’ Court under section 30(1) of the OCA, while the lot owner contended that such disputes must be heard by VCAT.

Decision

Magistrate Greenway held that the Magistrates’ Court does not have jurisdiction to hear claims for recovery of money owed by lot owners under the OCA.

Key reasons included:

• Section 30(2) of the OCA imposes specific requirements for recovery of money owed by lot owners, including compliance with sections 31, 32, and Division 1 of Part 11, which refer exclusively to VCAT.

• The Magistrates’ Court’s jurisdiction under section 100(1) of the Magistrates’ Court Act 1989 (Vic) is subordinate to the specific provisions of section 30(2) of the OCA.

Outcome

The Magistrates’ Court lacks jurisdiction to hear claims for recovery of money owed by lot owners based on final fee notices issued under the OCA.

Case 2: Owners Corporation v Nguyen & Ors [2025] VMC 12

The Nguyen case involved a similar jurisdictional question, with the OC seeking to recover unpaid fees from lot owners in the Magistrates’ Court. The lot owners relied on the reasoning in Buckley to argue that the Magistrates’ Court lacked jurisdiction.

Decision

Magistrate Hoare reaffirmed the reasoning in Buckley and concluded that the Magistrates’ Court does not have jurisdiction to hear such claims.

Magistrate Hoare stated:

“There is a clear and unmistakeable implication to alter or remove the Court’s jurisdiction with respect to claims for recovery of money owed by a lot owner under the OCA”

The decision expanded upon the analysis in Buckley by:

Examining Statutory Provisions: Magistrate Hoare provided a detailed analysis of sections 30(1) and 30(2) of the OCA, highlighting inconsistencies between the Magistrates’ Court’s jurisdiction and the requirements under the OCA.

Reaffirming Legislative Intent: The decision emphasised the legislature’s intent to create a specialised dispute resolution mechanism through VCAT.

Clarifying Practical Consequences: Allowing concurrent jurisdiction would create confusion for lot owners and OCs, undermining the clarity and efficiency of the dispute resolution process.

Outcome

The Magistrates’ Court lacks jurisdiction to hear claims for recovery of money owed by lot

owners under the OCA.

Key Takeaways for Owners Corporations and Lot Owners

Exclusive Jurisdiction of VCAT: Both decisions confirm that VCAT has exclusive jurisdiction to hear claims for recovery of money owed by lot owners under the OCA. OCs must comply with the notice provisions in sections 31 and 32 before initiating proceedings in VCAT.

Specialised Dispute Resolution: The OCA’s framework ensures that disputes are resolved by a specialist tribunal, with mandatory considerations of fairness, oppressiveness, and prejudice.

Clarity and Consistency: These decisions reinforce the importance of a clear and consistent dispute resolution process, reducing confusion for lot owners and OCs.

Conclusion

The decisions in Buckley and Nguyen & Ors provide valuable clarity on the jurisdictional framework for OC disputes. By confirming VCAT’s exclusive jurisdiction, these rulings ensure that disputes are resolved in line with the legislative intent of the OCA.

OCs and lot owners should carefully consider these decisions when navigating disputes over unpaid fees and charges. If your OC needs support in recovering unpaid fees or contributions through VCAT, our team is here to help. We provide comprehensive assistance, from drafting compliant notices to representing you at the Tribunal. Contact us on 03 9450 9400 to find out how we can assist.