Nothing Great Is Easy

Ethics was once described to me as the difference between right and right. 

This is something I've come to understand and accept later in life. 

When you choose to do what might be technically right and follow that path, over what's also right but the more difficult path, you have almost certainly acted unethically. 

This is the nub of the Netstrata case as outlined in the McGrathNicol report released this week. 

Among the myriad of issues the report deals with, perhaps the most sensational is the fees paid to a wholly owned subsidiary insurance brokerage that attained insurance for the bulk of the schemes Netstrata managed. In the 27 months covered by the investigation more than $7.4 M was funnelled back to Netstrata from their brokerage company as 'business management fees' and the like. 

Netstrata maintain that this was not a commission the law required them to disclose, and so they didn't. 

For some time to come, and probably at significant further cost to Netstrata and the taxpayers of NSW, lawyers will argue the correctness of this claim. Who knows how the courts will rule, if indeed it gets to court at all? 

For my money, absent a definition in the current law of a commission, and having regard to the ordinary meaning of the word commission, which you must under the rules of statutory interpretation, I would toss this argument out faster than rotting prawn shells in my refrigerator. 

So, there we have it - a classic case of the difference between right and right. 

What happens now will be defining for the strata management sector. 

And it doesn't turn on the outcome of whatever prosecution or plea-bargaining deal the DFT does with the accused. 

What matters is whether the rank and file of strata managers choose the path that's right, or the path that's right. 

What also matters is the path the peak body for strata managers, Strata Community Association, take to put their house back in order. 

A strong national association for strata managers is essential for professionalisation. 

The SCA (NSW) update following the release of the report this week was anything but strong. It tells members nothing of the remit of the consultants it has engaged, or how the revised policies will address the underlying issues. Also, the issues raised in the report are not NSW centric. The Netstrata practises exposed by the report, and described as ‘disturbing’ by the NSW Commissioner for Fair Trading, are widespread across the nation. 

Nothing less than very deliberate corrective action by management companies, and strong action by the SCA, will advance the cause of the professionalism of strata management. 

In the words of a great swimming hero of mine, Captain Matthew William Webb: Nothing great is easy.