The Owners Strata Plan 30695 v Stratacorp [2005] NSWSC 405

New South Wales Supreme Court

CITATION : The Owners Strata Plan 30695 v Stratacorp [2005] NSWSC 405

HEARING DATE(S) : 7 April 2005

JUDGMENT DATE : 7 April 2005

JUDGMENT OF : McDougall J at 1

DECISION : See para [27] of judgment

CATCHWORDS : PRACTICE AND PROCEDURE - interlocutory application - where plaintiff purportedly held extraordinary meeting appointing new strata managing agent - where plaintiff sought interlocutory orders against former strata managing agent providing for delivery up of documents and payment of trust moneys to it - where plaintiff gave notice under s 105 of the Strata Schemes Management Act - whether extraordinary general meeting validly called - balance of convenience - where alternative dispute mechanism available under Act and not utilised by plaintiff - no question of principle

LEGISLATION CITED : Strata Schemes Management Act

Harry M Miller Attractions Pty Ltd v Actors and Announcers Equity Association of Australia [1970] 1 NSWLR 614 CASES CITED : MacLeod & Anor v The Proprietors Strata Plan No 6544 [1980] 2 NSWLR 691 North Wind Pty Ltd v The Proprietors - Strata Plan No 3143 [1981] 2 NSWLR 809

The Owners - Strata Plan 30695 (Plaintiff) PARTIES : Stratacorp Management Services Pty Ltd (Defendant)

FILE NUMBER(S) : SC 2145/05

G A Moore (Plaintiff) COUNSEL : G A Sirtes (Defendant)

Andreones Pty Limited (Plaintiff) SOLICITORS : David LePage (Defendant)

LOWER COURT JURISDICTION :

IN THE SUPREME COURT OF NEW SOUTH WALES EQUITY DIVISION

McDOUGALL J

7 April 2005 Ex tempore (revised 26 April 2005)

2145/05 THE OWNERS - STRATA PLAN 30695 v STRATACORP MANAGEMENT SERVICES PTY LTD JUDGMENT 1 HIS HONOUR: The plaintiff is an Owners Corporation under the Strata Schemes Management Act. On 1 July 1996 the plaintiff and the defendant entered into an agreement for the defendant to provide strata management services to the plaintiff. On 1 June 2000 the plaintiff and the defendant entered into a further agreement for the defendant to provide strata management services to the plaintiff. 2 The agreement of 1 June 2000 was for a period of three years and provided what might be called a three yearly rollover: ie, automatic extensions for further terms each of three years. It provided, among other things, for three months' notice of intention to terminate to be given prior to the expiry of the original term or any rollover term. 3 On 28 February 2005 the plaintiff held, or purported to hold, an Extraordinary General Meeting. A resolution passed, or purported to have been passed, at that meeting dealt with "Change of Strata Manager". It read as follows: "(a) (i) RESOLVED that Strata Scheme No. 30695 terminates its current agency agreement with Stratacorp Management Services Pty Limited and revokes all functions it delegated to Stratacorp Management Services Pty Limited and; (ii) That the termination and revocation have effect from the date of this meeting. (b) That, in accordance with section 27(1) of the Strata Schemes Management Act 1996 ( Act ), (i) Dynamic Property Services Pty Limited be appointed as strata managing agent of Strata Scheme No. 30695; (ii) the Owners Corporation delegate to Dynamic Property Services Pty Limited all the functions of the Owners Corporation (other than those listed in section 28(3) of the Act) and its chairperson, treasurer, secretary, and executive committee, necessary to enable Dynamic Property Services Pty Limited to carry out the 'agreed services' and the 'additional services' as defined in the written agreement, covering the period from the date of this meeting until the date determined at the 2005 Annual General Meeting , a copy of which was tabled at the meeting ( Agreement); (iii) the delegation to Dynamic Property Services Pty Limited is to be subject to the conditions and limitations in the Agreement; and (iv) the Owners Corporation execute the Agreement to give effect to this appointment and delegation; and (v) authority be given for the common seal of the Owners Corporation to be affixed to the Agreement by the secretary and any other member of the Executive Committee/2 members of the Executive Committee. ( c) That Dynamic Property Services Pty Limited be authorised and empowered to notify all tradespeople and service providers to the Owners Corporation to direct all accounts, correspondence and enquiries concerning the Owners Corporation to Dynamic Property Services Pty Limited, Suite 2, Level 5, 162 Goulburn Street, Sydney NSW 2010. (d) That the address for services of notices on the Corporation be changed to care of Dynamic Property Services Pty Limited, Suite 2, Level 5, 162 Goulburn Street, Sydney NSW 2010 and the appropriate notices under section 239 of the Act be completed, executed and lodged for registration in the Land Titles Office to record the change of address for service of notices." 4 The defendant does not accept that its employment has been terminated. This has led to an extraordinary, and quite unnecessary, situation where Dynamic Property Services is seeking to fulfil the mandate purportedly given to it at the Extraordinary General Meeting, but where the defendant retains possession of the records of the plaintiff that are in its custody and a very substantial amount, about $2 million, of the plaintiff's money in its trust account. 5 By amended notice of motion filed on 31 March 2005 the plaintiff sought, among other things, interim relief in the following terms: "2. An order that, subject to the defendant being permitted to pay the sum of $111,204.19 into Court pending the final determination of these proceedings, the defendant within 24 hours to deliver to the plaintiff: (a) All property held in relation to Strata Plan No. 30695 including but not limited to all records, accounts and documents; and (b) All remaining funds held on trust for Strata Plan No. 30695 to the bank account nominated by the, [sic]". 6 The reference to the sum of $110,204.19 is to a sum quantified by the defendant as the damage that it would sustain from what it says is the wrongful termination of the management agreement that, it says, is in place from 1 June 2003 until 31 May 2006. 7 The plaintiff put its claim on two bases. 8 Firstly, it says, it is entitled by s 105 of the Strata Schemes Management Act to production of its property. Section 105 reads as follows: "105 Owners corporation may require certain persons to produce records, accounts and property of the owners corporation