Network Strata Services (Netstrata) is due to appear before the Supreme Court of NSW at Queens Square in Sydney this week. The first day of a two-day listing was originally scheduled for Monday but is now scheduled for Tuesday. The court date marks the start of a criminal prosecution with direct relevance to the strata insurance sector. NSW Fair Trading filed the charges against Netstrata and its director and licensee in charge, Stephen John Brell (pictured), alleging multiple breaches of statutory obligations under the Property and Stock Agents Act 2002 (NSW).
Netstrata is one of the state's largest strata operators, managing around 1,000 properties across NSW. The regulator alleges the firm failed to adequately disclose or manage conflicts of interest involving related-party service providers, received undisclosed financial benefits, and provided false or misleading information to NSW Fair Trading.
For insurance intermediaries operating in the strata space, the prosecution sharpens a question that has circled the sector for two years: How conflicts tied to commissions, related-party placements and referral arrangements get disclosed to owners corporations. Acting NSW Fair Trading Commissioner Andrew Floro said "strata managing agents play a critical role in the governance and financial management of strata schemes across NSW," adding that "this prosecution aims to hold Netstrata and its Director and Licensee in Charge to account should the offences be established."
The charges follow a 2025 review by McGrathNicol, commissioned by NSW Fair Trading, which raised concerns over transparency at Netstrata and made 22 recommendations, alongside earlier ABC reporting on the firm's fee structures. Our earlier coverage of the McGrathNicol review's transparency findings traced how that inquiry fed into today's court listing.
Netstrata has confirmed it will defend the charges. Brell has stepped aside as managing director "while a current legal process plays out," with founder Ted Middleton returning as acting managing director. A company spokesperson told Insurance Business that "as these matters are now subject to a formal court process, Netstrata is limited to what it can say," while pointing to work done since the McGrathNicol review began: "We have since implemented, or are implementing, that review's recommendations, most of them ahead of schedule." The spokesperson added that "in addition to those recommendations, Netstrata proactively made many changes of its own, including a total zero-commission policy."
The prosecution also lands against a backdrop of active industry scrutiny. Tyrone Shandiman, chair of the Australian Consumers Insurance Lobby (ACIL) and a strata insurance specialist, has welcomed the broader regulatory push, saying "it's encouraging to see NSW Fair Trading continuing to take decisive action in the strata sector," and that "of all the governments and regulators we've engaged with over recent years, NSW has been the most publicly active in tackling transparency, governance and conflicts of interest."
Brokers advising owners corporations will be watching closely for how the court and the regulator define acceptable disclosure standards for related-party arrangements, a question with implications for insurance placement practices across the strata sector.
