North East Developments Pty Limited v The Owners - Strata Plan No. 53374 [2007] NSWSC 1063

Reported Decision : (2007) NSW Titles Cases 80-121

New South Wales Supreme Court

CITATION : North East Developments Pty Limited v The Owners - Strata Plan No. 53374 [2007] NSWSC 1063

HEARING DATE(S) : 20/09/2007

JUDGMENT DATE : 27 September 2007

JUDGMENT OF : Associate Justice Malpass

DECISION : I set aside the decision of the Local Court. The proceedings are remitted back to it for further hearing. The defendant is to pay the costs of the appeal. If so entitled, it is to have a certificate under the Suitors Fund Act. The exhibit may be returned.

CATCHWORDS : Statutory construction - levying of contributions - order made under s183 - when it takes effect and when unit entitlement is amended - recording in Register

LEGISLATION CITED : Strata Schemes (Freehold Development) Act 1986 (NSW) Strata Schemes Management Act 1996 (NSW)

PARTIES : North East Developments Pty Limited (Pl) The Owners - Strata Plan No. 53374 (Def)

FILE NUMBER(S) : SC 10202/07

COUNSEL : Mr C. R. C. Newlinds SC / Mr B. Kremer (Pl) Mr P. W. Gray SC (Def)

SOLICITORS : Andreones Pty Limited Lawyers (Pl) David Le Page (Def)

LOWER COURT JURISDICTION : Local Court

LOWER COURT FILE NUMBER(S) : 2981/06

LOWER COURT JUDICIAL OFFICER : Lulham LCM

LOWER COURT DATE OF DECISION : 18/12/2006

- 10 - IN THE SUPREME COURT OF NEW SOUTH WALES COMMON LAW DIVISION

ASSOCIATE JUSTICE MALPASS

27 SEPTEMBER 2007

10202/07 North East Developments Pty Limited v The Owners - Strata Plan No. 53374

JUDGMENT 1 HIS HONOUR: Strata Scheme No. 53374 (the Scheme) is a freehold strata scheme comprising ten Lots. The plaintiff is the owner of Lots 9 and 10 in the Scheme. Mr and Mrs Symond are directors of the plaintiff. The defendant is the Owners Corporation for the Scheme. 2 The Scheme was registered on 30 September 1996. Lots 9 and 10 then each had a unit entitlement of 108 units out of an aggregate unit entitlement of 1000. Such entitlement was registered in the Schedule of unit entitlement in the folio of the Register comprising the common property (the Register). 3 On 14 August 2000, the Strata Schemes Board (the Board) made an order reallocating the unit entitlements among the Lots. As a consequence, Lots 9 and 10 each had a unit entitlement of 122 units. 4 The order was made by the Board on the application of the owners of five units. It was made pursuant to s183 of the Strata Schemes Management Act 1996 (NSW) (the Act). It is a provision that empowers the making of an order allocating unit entitlements among lots that are subject to a strata scheme. There is no issue between the parties that the allocation power contemplates a reallocation. 5 The defendant was the nominal respondent to the application. It was unsuccessfully opposed by the plaintiff. Notice of the order was served on the defendant on 15 August 2000. 6 On 4 September 2000, an Annual General Meeting of the defendant was held. Mr and Mrs Symond were present (as was their solicitor, Mr Andreone). The unit owners unanimously resolved to approve a budget in respect of the administrative fund or sinking fund, which was calculated having regard to the reallocation of unit entitlements. 7 The Register remained unaltered until 3 March 2006, when the Registrar-General varied it to conform to the reallocation that took place on 14 August 2000. 8 Between 14 August 2000 and 3 March 2006, the defendant levied contributions upon the plaintiff for the Scheme's administrative fund and sinking fund on the basis that the plaintiff was liable to pay 244/1000ths of the amount required for each of those funds. The amounts levied were paid by the plaintiff. 9 In March 2006, Mr and Mrs Symond discovered that the Register had remained unaltered until 3 March 2006. A letter dated 10 March 2006 was written to the solicitors of the defendant demanding recovery of overpayments in respect of levies. The plaintiff brought proceedings in the Local Court to recover the difference between the amount paid and the amount he claims he was required to pay (216/1000ths) in respect of the levies (the sum of $40,745.22 plus interest). The proceedings were heard by Lulham LCM. The Magistrate found in favour of the defendant. 10 Broadly speaking, there were two issues before the Magistrate. One was a question of statutory construction. The other concerned a defence of equitable estoppel. There was no dispute between the parties that, save for these two issues, the plaintiff was entitled to repayment of what was claimed by it. The decision of the Magistrate turned on the issue of statutory construction. It did not deal with the issue of equitable estoppel. 11 By Summons filed on 12 January 2007, the plaintiff brings an appeal to this Court against the decision. The appeal is brought as of right. The plaintiff alleges error in point of law. It bears the onus of satisfying the Court that there has been error in point of law that justifies the disturbing of the decision. 12 The appeal was heard on 20 September 2007. Both parties were represented by Senior Counsel. There were written submissions, which were supplemented by oral argument.