Bondlake Pty Ltd v The Owners - Strata Plan No 60285 [2005] NSWCA 35

Reported Decision : 62 NSWLR 158

New South Wales Court of Appeal

CITATION: Bondlake Pty Ltd v The Owners - Strata Plan No 60285 [2005] NSWCA 35

HEARING DATE(S): 24 February 2005

JUDGMENT DATE: 2 March 2005

JUDGMENT OF: Handley JA at 1; Giles JA at 2; McColl JA at 41

DECISION: (1) Appeal allowed; (2) Set aside the declaration and order for costs made by Pearlman AJ on 5 November 2004; (3) Summons filed on 12 March 2003 dismissed; (4) Respondent pay the costs of the summons and the appeal and have a certificate under the Suitors Fund Act if otherwise qualified.

CATCHWORDS: Contract - whether void for illegality - Strata Schemes Management Act 1996 - "initial period" when developer controls owners corporation prior to lot owners having control - s 113(1)(b) prohibits owners corporation from incurring a debt for an amount exceeding the amount then available for repayment of the debt from administrative fund or sinking fund - owners corporation entered into caretaker agreement under which fee was payable - incurred a debt - nothing in funds - whether prohibition on entering into contract meant it was void for illegality - question of construction of s 113 - gave claim over against original which presupposed owners corporation was liable for the debt - qualified sanction for contravention - unlikely invalidity intended - invalidity could operate harshly on innocent persons - on proper construction, not void. D

Fitzgerald v F J Leonhardt Pty Ltd (1997) 189 CLR 215; CASES CITED: Hurst v Vestcorp Ltd (1988) 12 NSWLR 394; Yango Pastoral Co Pty Ltd v First Chicago Australia Ltd (1978) 139 CLR 410.

Bondlake Pty Ltd - Appellant PARTIES: The Owners - Strata Plan No 60285 - Respondent