Warring strata companies leave Carlton apartment block with slow lifts, disgusting carpets, cracked windows

A years-long fight for control of the owners’ corporation of a Carlton apartment block has left residents scrambling for cash to fund urgent maintenance for ageing lifts, cracked concrete and broken windows.

Owners at the 18-storey Vic Apartments tower, on the corner of Victoria and Leicester Streets, have been hit with levy notices from two competing owners’ corporation managers, amid ongoing concerns about poor governance and dysfunction for years, according to tribunal documents.

The dispute stems from claims made by real estate agent David Wu and his owners’ corporation, Paragon, that they were appointed the legitimate manager of the building following a June 2021 annual general meeting by one committee (made up of owners).

But, in the same year, Simon Saint John’s Above OCM claimed to have been appointed the owners’ corporation manager at a different AGM held in October, by a committee made up of different owners.

Jarrod Folino, an owner-occupier in the tower since its completion in 2014, said that as the fight had dragged on the building had suffered: “The carpets and walls are disgusting.”

Folino, 42, also pointed out the lifts are ageing and so slow that about 5.30pm on weekdays there is a queue of residents to get upstairs.

Concrete beams also show signs of cracking on the outside of Folino’s balcony, but he said it was not worth asking to have this fixed, because there was no maintenance budget.

“My ceiling got flooded as well. And some of the owners’ windows are cracking,” he said.

The building, which has about 360 apartments, is mainly occupied by international students due to its proximity to the University of Melbourne and RMIT University.

Leading strata lawyer David McKenzie, an expert asked to review the state’s strata laws, said the case highlighted deficiencies in the Owners Corporations Act.

He said the Victorian Civil and Administrative Tribunal “doesn’t really have the firepower to extract penalties through costs orders to actually bring these people into line”.

The possibility of a costs order can be a deterrent as it forces one party to pay another party’s legal bills.

A three-day hearing about the owners’ corporation dispute was held in late August. VCAT vice president My Anh Tran has reserved judgment in the case, and will determine if an independent administrator should be appointed to hold the next building AGM.

Lawyers for Saint John’s Above OCM alleged Paragon and Above OCM were both issuing levy notices in 2022.

“What has transpired is that Paragon is issuing levies to the lot owners, as well as what the [other] owners’ corporation are issuing [in] levies,” an affidavit dated this March and lodged by Phillip Leaman, lawyer for Above OCM, said.

“This obviously became problematic over the end of December and early January and there was a lot of misinformation.”

In July 2022, VCAT ordered that Wu’s Paragon be restrained from “performing any and all of the functions” of an owners’ corporation manager. The company was ordered to hand over levy cash and financial records it did collect.

Saint John alleged Wu did not transfer levies Paragon collected to Above OCM. Wu said he refunded the owners directly, but Saint John said there was no proof of that.

Leaman, for Above OCM, said in his affidavit: “Through Paragon, Mr Wu has issued fee notices and collected monies on behalf of the OC, despite having himself placed in issue before the tribunal whether any committee was validly appointed.

“Viewed as a whole, this conduct is not consistent with a genuine attempt to assist the OC or its members to overcome governance difficulties. Instead, it reflects a deliberate effort to maintain control, secure a continuing revenue stream, and exert ongoing influence over the affairs of the OC notwithstanding the tribunal’s supervisory role,” he said.

According to Saint John’s affidavit, dated March 26, the OC was struggling to meet the costs of “necessary maintenance and rectification works”.

“The OC has significant ongoing financial obligations it is required to meet each month. This includes the requirement to pay $61,807.86 for its insurance premium.

“Urgent lift works are required in accordance with the OC’s approved maintenance plan. In addition, essential services maintenance, including cleaning, caretaking, lift servicing, mechanical ventilation maintenance, and pest control, must continue to be carried out to ensure the proper operation and safety of the property,” he said.

“The OC has been unable to meet the costs of these necessary maintenance and rectification works.”

Wu has denied Saint John’s claims in his own affidavits, alleging that evidence is false.

Above OCM’s VCAT documents alleged Wu has conflicts of interest.

Wu is a director of the company that developed the building, is a director of Paragon – the owners’ corporation manager competing for control of the building – and acts as a real estate agent and proxy for about 60 lot owners.

Wu declined to comment on questions from The Age.

“Given the proceedings have recently concluded and the tribunal has yet to deliver its findings, I do not consider it appropriate to provide substantive comment on the allegations or matters currently before the tribunal at this stage,” he said.

Saint John also declined to comment.

VCAT orders from January 2024 show an external administrator, Alice Ruhe, was appointed to prepare a budget and engage an external auditor to investigate “alleged discrepancies in the financial records” of the owners’ corporation. She was employed from that time until July 2025. Above OCM has since been attempting to manage the building.

Those orders noted: “The owners’ corporation has not had a functional committee, but has been managed, in ‘caretaker mode’.”

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Angelica Snowden is a senior reporter on The Age’s City team.Connect via email.AdvertisementAdvertisement