Result Strata Management Pty Ltd v Commissioner for Fair Trading; Lee v Commissioner for Fair Trading [2025] NSWCATOD 68

1. Following the receipt of complaints, the Commissioner conducted an investigation into allegations against Mr Lee and RSM. On 15 January 2025 the Commissioner issued Show Cause Notices to Mr Lee and RSM pursuant to s 195 of the Property and Stock Agents Act. On the same day the strata management licences of Mr Lee and RSM were suspended for 60 days until 16 March 2025 and the Commissioner appointed a manager to RSM pursuant to ss 126 and 127 of the Property and Stock Agents Act.
2. On 17 January 2025 Mr Lee and RSM applied to the Tribunal for a stay of the suspension of their licences. Those applications were dismissed as the Tribunal did not have jurisdiction to review the suspensions of the licences.
3. Following receipt of submissions from Mr Lee and RSM, further Show Cause Notices were issued by the Commissioner on 13 March 2025 and the licences of Mr Lee and RSM were suspended for a further 60 days.
4. On 8 April 2025 Mr Lee and RSM commenced proceedings in the Supreme Court of New South Wales, Common Law Division, Administrative Law List. The Commissioner states that the Summons and an affidavit of Mr Lee sworn 8 April 2025 were submitted to her as submissions in response to the second Show Cause Notices.
5. As noted above, on 9 May 2025 the Commissioner issued the decisions to take disciplinary action against Mr Lee and RSM and their licences were cancelled. The manager appointed on 16 March 2025 pursuant to ss 126 and 127 of the Property and Stock Agents Act, Grant Thornton Australia Pty Ltd, remains appointed to manage RSM's business. If a stay is granted Mr Lee intends to resume management of RSM's business.

1. The Tribunal can only deal with the stay applications (and the substantive applications) if it has jurisdiction to review the disciplinary decisions made on 9 May 2025 under the Property and Stock Agents Act. The Commissioner does not dispute that the disciplinary decisions are administratively reviewable decisions under the relevant provisions of the Administrative Decisions Review Act 1987 (ADR Act), and the Property and Stock Agents Act. I am also satisfied that the decisions are administratively reviewable decisions as defined in the ADR Act: see ss 7 and 9.
2. The Commissioner argues, however, that the Tribunal's administrative review jurisdiction under s 30 of the Civil and Administrative Tribunal Act 2013 is not enlivened as Mr Lee and RSM have not sought internal review of the disciplinary decisions as required by s 55(3) of the ADR Act.
3. Section 55(1) of the ADR Act provides that an application to the Tribunal for administrative review may only be made by an "interested person". Mr Lee and RSM are certainly "interested persons" who may apply for review. Section 55(3) of the ADR Act provides that an application to the Tribunal for administrative review may not be made unless the person has duly applied for such an internal review and the review is taken to have been finalised under s 53 (9). Neither Mr Lee nor RSM have applied to the Commissioner for internal review of the disciplinary decisions.
4. Section 55(4) of the ADR Act allows the Tribunal to deal with an application for administrative review of an administratively reviewable decision even though the applicant has not duly applied for an internal review if the Tribunal is satisfied that:

(a) the applicant made a late application for the internal review in circumstances where the person dealing with the application unreasonably refused to consider the application and the application to the Tribunal was made within a reasonable time following the administratively reviewable decision of the administrator concerned, or

(b) it is necessary for the Tribunal to deal with the application in order to protect the applicant's interests and the application to the Tribunal was made within a reasonable time following the administratively reviewable decision of the administrator concerned.

1. Section 55(4)(a) is not relevant in the circumstances of this case. Mr Lee and RSM must therefore satisfy the two limbs of s 55(4)(b). Their applications to the Tribunal were made 10 days after the Commissioner issued the disciplinary decisions and were therefore clearly made within a reasonable time following the decisions. The Commissioner argues, however, that Mr Lee and RSM fail to satisfy the first limb of s 55(4)(b) because they have not demonstrated that it is necessary for the Tribunal to deal with their applications in order to protect their interests. This argument is based on the fact that the manager appointed to RSM has been in place since 15 January 2025 and remains so.
2. The Commissioner relies upon an affidavit of Scott Andrew Martin, a Chartered Accountant and Senior Manager (Financial Advisory) at Grant Thornton Australia. Mr Martin states that, to the best of his knowledge, there are no strata plans or building management committees (BMCs) currently under the management of RSM. He gives details of the transfer of the management of strata plans and BMCs to new managing agents. To that end, the Commissioner argues, there are no immediate interests to protect.
3. At the hearing Mr Lee stated that two strata plans and one BMC have agreed to return to management by RSM if a stay is granted. According to Mr Martin's affidavit management of these two strata plans and the BMC has been transferred to Compass Strata. Mr Lee agrees that is the case but maintains that they wish to return to management by RSM. At the hearing Mr Lee also expressed concerns about depletion of the assets of RSM while the manager is in place.
4. Whether any strata plans or BMC's would return to RSM's management is a moot point, there being no evidence other than Mr Lee's statement at the hearing that that is the case.
5. Nevertheless, I am satisfied that it is necessary for the Tribunal to deal with the applications to protect the interests of Mr Lee and RSM. Mr Lee states he has been in the strata industry for more than 10 years and has held a strata managing licence since 2017. The investigation into the complaints and the issuing of the Notices to Show Cause have taken some time. The manager was appointed in January this year but it is not until now that Mr Lee and RSM have been able to challenge any disciplinary decision (there being no such decision until 9 May 2025). In the meantime, Mr Lee states, RSM has suffered financially and its lease of business premises terminated. He states that the company's operational accounts, as distinct from trust accounts, have been frozen and, as a result, there is no access to money which has resulted in severe financial distress.
6. While the Commissioner argues that the company is preserved while it is under management and that if Mr Lee and RSM are successful in overturning the disciplinary decisions, clients would be free to return, I am satisfied that, in the meantime, the financial, reputational and other interests of Mr Lee and RSM are clearly affected. I am satisfied it is necessary for the Tribunal to deal with the applications in the absence of internal review in order to protect Mr Lee's and RSM's interests.

1. Section 60 of the ADR Act empowers the Tribunal to stay a decision pending the outcome of the review. The principles relevant to the exercise of the discretion are set out in QLD Protection Security Pty Ltd v Commissioner of Police, NSW Police Force [2018] NSWCATAP 113. Those principles can be summarised as follows:

(1) whether the order is appropriate to secure the effectiveness of the determination of the application for review

(2) whether the order is desirable taking into account:

(a) the interests of any persons who may be affected by the determination of the application for review

(b) any submission made by or on behalf of the administrator who made the decision to which the application relates

(c) the public interest.

(3) the applicant's prospects of success on the application for review.

1. The circumstances that are relevant in any particular case to the considerations identified above may well overlap or be interrelated.
2. In AVS Group of Companies Pty Ltd v Commissioner of Police [2010] NSWCA 81 at [129] the Court of Appeal held that securing the effectiveness of the determination of the application involves matters such as ensuring that the lapse of time before the determination is actually made does not deprive the review of practical point. The Court went on to say that it also involves considering the possibility that the result of the review might be that the decision is affirmed, with the consequence that, if stay is granted, the decision has not been implemented during the period of the stay.
3. The allegations against Mr Lee and RSM in their management of various strata plans and BMCs include:

(a) failure to ensure that an owners corporation building and common property was insured

(b) failure to disclose to an owners corporation the nature of defects which prevented insurance being renewed

(c) failure to ensure compliance with critical fire and safety obligations

(d) failure to disclose conflicts of interest

(e) failure to attend to or disclose to owners debts/unpaid invoices of contractors and vendors resulting in multiple unpaid debts

(f) failure to conduct an Annual General Meeting in accordance with proper procedure

(g) failure to provide information regarding trust accounts when required

(h) failure to include two agenda items requested by a strata committee chairperson to be included in the Extraordinary General Meeting

(i) failure to disclose litigation commenced against a strata plan

(j) failure to seek approval prior to engaging legal representation

(k) failure to notify all lot owners of an application to the Tribunal for compulsory appointment of new strata manager

(l) failure to include the mandatory term clauses in Agency Agreements dated 6 March 2023 and 25 May 2023 regarding termination without payout in circumstances where another manager is compulsorily appointed

(m) failure to respond to direction from a compulsorily appointed strata manager to provide strata records to facilitate the transfer of management functions

(n) overcharged for debt recovery processes in the amount of approximately $29,000 over a two year period

(o) issued Concerns Notice without sufficient particularisation

(p) issued invoices without a legitimate basis nor evidence supporting the allegation of damage to common property

(q) sections in the Strata Management Agency Agreements dated 6 March 2023 and 25 May 2023 were not compliant with the statutory limitation period

(r) holding secret ballot without appropriate authority

(s) consistently breached rules of conduct

(t) used threatening language

(u) aggressive, intimidatory and unprofessional email sent to lot owners

(v) charged tees for services not rendered

(w) gave misleading and false representations regarding the Strata Schemes Management Act 2015 and the jurisdiction of the Tribunal

(x) issued an invoice for strata insurance commission contrary to the motion being lost

(y) lack of understanding as to when fees can be lawfully charged

(z) blocked access to a strata committee's secretary to the owners corporation record

(aa) exceeded authority re monetary amount for works

(bb) renewed insurance contrary to owners corporation vote

(cc) charged fees for attendance at the Tribunal when RSM was the respondent

(dd) invoiced a Strata Plan $6,000 in relation to a private matter (personal AVO)

(ee) received strata insurance commission despite being instructed not to renew the insurance

(ff) provided incorrect information about accessing owners corporation records under the Strata Schemes Management Act

(gg) conducted an unauthorised meeting on 1 July 2020 and resolved to take out a $700,000 loan on behalf of the Building Management Committee.

1. Mr Lee strongly argues that the findings against him and RSM made by the Commissioner and resulting in the disciplinary decisions are unjust and wrong. He accuses the Commissioner of abusing her power and insists he has acted properly. As such, Mr Lee believes that the substantive applications before the Tribunal will be successful.
2. Mr Lee refers to a recent decision of the Tribunal in PSMG Pty Ltd v Commissioner for Fair Trading [2024] NSWCATOD 117 where the Tribunal granted a stay in a matter where the strata management licences of an individual and related company had been cancelled and a manager appointed. He argues that his case is similar and a stay should be granted. There are, however, a number of factual differences in respect of the circumstances in PSMG and this matter. These go primarily to the seriousness of the alleged conduct and, in the case of PSMG, no concerns as to public safety.
3. I am not satisfied that a stay is needed to secure the effectiveness of the review. While Mr Lee states that Grant Thornton Australia has acted contrary to any requirement to preserve RSM's business, I am not satisfied that is the case. In his affidavit Mr Martin sets out the steps taken by Grant Thornton Australia since being appointed manager in January 2025. These show that the manager has taken proactive steps to manage the business and transfer the clients of the business to other licenced managers. Mr Lee refers to a downturn in profitability of RMS but that is to be expected as clients are now managed by other strata mangers. The Commissioner states that the business has been preserved and, contrary to Mr Lee's statements, is not facing liquidation.
4. There is no immediate effect upon the strata plans and BMCs previously managed by RSM if a stay is not granted. All are presently being managed by other licensees. If Mr Lee and RSM are successful in their review applications, particularly in seeking to set aside the cancellation of their licences, it will be open to them to seek the return of former clients or engage new ones. While Mr Lee refers to staff of the business, he has not provided any information to demonstrate any adverse effects upon staff (if any) still with RSM if a stay is not granted.
5. As set out above, I am satisfied that Mr Lee in particular has suffered financially and the profitability of RSM has diminished as a result of the disciplinary action taken against them. Their loss of income, however, must be weighed against all other considerations.
6. It is clear from the affidavit of Mr Martin and the Commissioner's decisions and submissions that the interests of a large number of people across many strata schemes will be affected by the applications for review. I agree with the Commissioner that significant weight should be given to protecting the interests of those living in strata schemes who have a legitimate expectation that the regulatory scheme will be adhered to by licensees. I also note the comment made by the Commissioner at the hearing that to grant a stay may result in a situation where, if Mr Lee is successful in attracting old or new clients to the business, those clients, in a relatively short period of time, may well find themselves without a licenced manager if the disciplinary decisions are affirmed on review. That would be disruptive and unsatisfactory. Of concern is that Mr Martin states that Grant Thornton Australia has, since its appointment as manager, identified further areas of concern in RSM's management of various strata plans.
7. The Commissioner refers to allegations against Mr Lee and RSM that concern public safety, particularly in relation to fire safety. I agree, while noting the allegations are disputed, matters of public safety weight heavily against the granting of a stay. The same may be said of public confidence in the integrity of the regulatory system under the Property and Stock Agents Act and the Strata Schemes Management Act 2015. The system is designed to protect the interests of people who live in strata schemes around New South Wales and, in light of the serious allegations against Mr Lee and RSM, it would be against the public interest to allow them to operate on an interim basis pending the outcome of the reviews.
8. It is always very difficult to assess an applicant's prospects of success in an administrative review application. As the Commissioner notes, parties may provide new evidence and new issues may be considered when the Tribunal is dealing with the substantive application. Mr Lee has provided a very detailed affidavit in which he challenges each of the matters relied upon by the Commissioner in the disciplinary decisions. Overall, the question of whether Mr Lee and RSM would be successful in their review applications is finely balanced.
9. The number and seriousness of the charges brought against Mr Lee and RSM and relevant concerns for public safety lead me to conclude that these matters outweigh the interests of Mr Lee and the business of RSM. I have considered whether, as suggested by Mr Lee, an undertaking or condition on the stay may meet my concerns. However, it is clear that Mr Lee is the directing mind behind the company whose sole business seems to be strata management. In the circumstances I am not satisfied that any condition, undertaking or other requirement is sufficient to protect the interests of those living in strata plans which might be managed by RSM and the potential disruption to those people if the decisions are affirmed.
10. The applications for an order staying the operation of the decisions under review are therefore refused.

(2) Matters 2025/00191090 and 2025/00191101 are listed for directions on 17 June 2025 at 11:30 am.

I hereby certify that this is a true and accurate record of the reasons for decision of the Civil and Administrative Tribunal of New South Wales.