Victorian Apartment Owners Prepare Class Action Against Bluestone OCM
Apartment owners in Victoria are preparing to file a lawsuit against Bluestone OCM, a major strata management firm. The impending writ, to be lodged in the Supreme Court of Victoria, alleges misleading conduct, unconscionable behavior, and breaches of the Owners Corporations Act.
Allegations of Misconduct
The legal action is led by Wilbur Tong on behalf of his family's apartment at Marina Tower in Docklands. It seeks to represent all lot owners in Victorian strata schemes managed by Bluestone since 2020 who may have received misleading fee notices.
The Tong Family's Case
Tong's family reportedly fell behind on owners corporation levies during COVID-19. They claim to have paid $24,000 in levies between late 2022 and mid-2024. Despite these payments, Bluestone allegedly pursued an overstated debt of $8,000. A statement issued in November 2024 declared a debt of over $13,400, which Tong states included significant legal and 'recovery' costs, with no levies outstanding at that time.
Tong's family was also issued a "special fee" of about $5,500 for anticipated legal costs, which they interpreted as a deposit for future legal action against them.
Tong views these actions as an abuse of power, stating that average owners may not understand the financial reporting or their legal rights.
Scope of the Action
Bluestone OCM manages over 45 apartment buildings, including prominent structures like Australia 108 and Premier Tower.
Bluestone OCM Denies Allegations
Bluestone OCM has denied any wrongdoing. The company stated it is "guided by ethical, transparent and service-focused principles" and maintains "robust policies and oversight processes" to ensure fair and lawful practices.
The company states it is "guided by ethical, transparent and service-focused principles" and maintains "robust policies and oversight processes."
Broader Industry Scrutiny in Victoria
The class action coincides with increased scrutiny of strata and owners corporation laws in Victoria. Instances of excessive administrative and debt recovery fees have previously been ruled unlawful by VCAT.
In response to concerns, the Labor government commissioned an independent review of strata laws. An expert panel delivered its recommendations in early December, addressing issues such as unethical management conduct, undisclosed commissions, hardship provisions for owners, and the 100% agreement threshold for collective asset sales. The review also examined short-stay accommodation rules and modernizing voting structures.
The Minister for Consumer Affairs is reviewing the panel's recommendations and plans to release the government's response alongside the review.
Potentia Litigation Seeks More Plaintiffs
Potentia Litigation, the law firm representing the plaintiffs, is actively seeking other affected lot owners in Bluestone OCM-managed properties before formally lodging the legal action in late February.