Australia City Properties Management Pty Ltd v The Owners – Strata Plan No 65111 [2020] NSWSC 1505

Supreme Court New South Wales

Medium Neutral Citation: Australia City Properties Management Pty Ltd v The Owners – Strata Plan No 65111 [2020] NSWSC 1505 Hearing dates: 3-6; 11-12 August 2020 Date of orders: 28 October 2020 Decision date: 28 October 2020 Jurisdiction: Equity Before: Darke J Decision: Declarations and orders to be made as summarised at [277] – [280]. Catchwords: LAND LAW – strata title – building manager – duration of caretaker agreement – agreement made in 2001 provides for 10 year term with options for three additional 5 year terms – legislation introduced in 2003 regulates appointments of caretakers and duration of caretaker agreements – effect of legislation including transitional provisions upon variations to caretaker agreement made in 2010 and 2015 – variations provided for additional options for further terms – held that agreement as varied not an agreement the duration of which is protected by transitional provisions – held that agreement as varied has maximum duration of 10 years from date when agreement as varied authorised caretaker to act under it – Strata Schemes Management Act 1996, s 40B and Sch 4 Part 4, cl 12 – effect of transitional provisions of Strata Schemes Management Act 2015, ss 66-70 and Sch 3 cll 3, 15 LAND LAW – strata title – owners corporation – meetings of owners corporation – voting by proxy – voting by a proxy who is a caretaker – where vote would confer or assist in conferring a material benefit on the proxy – where proxies held by persons said to be acting on behalf of caretaker as its agent – the provision that invalidates certain votes by a proxy who is a caretaker held to apply only to votes by the caretaker itself as proxy – Strata Schemes Management Act 1996, Sch 2 Part 2 cl 11 LAND LAW – strata title – building manager – cl 9.3 of caretaker agreement gives owners corporation the right to terminate the agreement if caretaker guilty of gross misconduct or gross negligence in performing its responsibilities – numerous allegations of misconduct or negligence including overcharging, standing for election to executive committee, improper use of electricity and failures in respect of fire safety – held that caretaker was guilty of gross misconduct in taking supply of electricity paid for by owners corporation over 18 year period – held that caretaker was guilty of gross misconduct or gross negligence in failing to promptly report to executive committee about unresolved faults in fire alarm system – owners corporation entitled to terminate caretaker agreement under cl 9.3 – right to terminate exercised by executive committee of owners corporation – right to terminate validly exercised despite no advance approval of general meeting of owners corporation – action of executive committee later ratified by resolution passed at general meeting – caretaker had not in the meantime terminated the agreement for repudiation by owners corporation – upon termination under cl 9.3 parties bound to follow regime laid down by cl 10 of agreement – owners corporation in breach of cl 10 by taking possession of caretaker lot, but conduct held not to be repudiatory – caretaker entitled to damages and compensation pursuant to usual undertaking as to damages for deprivation of possession of caretaker lot – Strata Schemes Management Act 2015, s 68(3) Legislation Cited: Strata Schemes Management Act 1996 (NSW), s 40B; Sch 2 Part 2, cl 11; Sch 4 Part 4, cl 12 Strata Schemes Management Act 2015 (NSW), ss 66-70, Sch 3, cll 3, 15 Cases Cited: 2 Elizabeth Bay Road Pty Ltd v The Owners – Strata Plan No 73943 (2014) 88 NSWLR 488; [2014] NSWCA 409 Berry v CCL Secure Pty Ltd (2020) 94 ALJR 715; [2020] HCA 27 Commissioner of Taxation v Sara Lee Household and Body Care (Australia) Pty Ltd (2000) 201 CLR 520; [2000] HCA 35 DCT Projects Pty Ltd v Champion Homes Sales Pty Ltd [2016] NSWCA 117 Electricity Generation Corporation v Woodside Energy Ltd (2014) 251 CLR 640; [2014] HCA 7 European Bank Limited v Evans (2010) 240 CLR 432; [2010] HCA 6 Hughes v NM Superannuation Pty Ltd (1993) 29 NSWLR 653 Koompahtoo Local Aboriginal Land Council v Sanpine Pty Ltd (2007) 233 CLR 115; [2007] HCA 61 Mount Bruce Mining Pty Ltd v Wright Prospecting Pty Ltd (2015) 256 CLR 104; [2015] HCA 37 Scott v Ennis-Oakes [2020] NSWCA 239 The Owners Strata Plan No 57164 v Yau (2016) 18 BPR 36,095; [2016] NSWSC 1056 The Owners Strata Plan No 57164 v Yau (2017) 96 NSWLR 587; [2017] NSWCA 341 Waldorf Apartment Hotel The Entrance Pty Ltd v Owners Corporation SP 71623 [2010] NSWCA 226 Wigan v Edwards (1973) 1 ALR 497 Category: Principal judgment Parties: Australia City Properties Management Pty Limited (First Plaintiff/Cross-Defendant) Bo Yun Wang (Second Plaintiff) The Owners - Strata Plan No. 65111 (Defendant/Cross-Claimant) Representation: Counsel: Mr N J Kidd SC with Mr S R Meehan (Plaintiffs/Cross Defendant) Mr S Free SC with Mr O Jones (Defendant/Cross-Claimant)