The Owners – Strata Plan 74602 v Eastmark Holdings Pty Ltd; Eastmark Holdings Pty Ltd v The Owners – Strata Plan 74602 [2015] NSWSC 1981

Supreme Court New South Wales

Medium Neutral Citation: The Owners – Strata Plan 74602 v Eastmark Holdings Pty Ltd; Eastmark Holdings Pty Ltd v The Owners – Strata Plan 74602 [2015] NSWSC 1981 Hearing dates: 21 September – 14 October, 23 October 2015 Decision date: 24 December 2015 Jurisdiction: Equity - Technology and Construction List Before: Stevenson J Decision: Parties to make submissions as to what further matters remain for consideration and what orders should be made to give effect to these reasons Catchwords: STRATA TITLES – mixed residential, commercial, retail and car parking development – allocation of the costs of shared services – proper construction of strata management statement – whether allocation of costs of shared services under strata management statement fair and reasonable – whether strata management statement an unjust contract for the purposes of the Contracts Review Act 1980 – whether strata management statement should be re-written – whether any amendment to strata management statement should be retrospective; EQUITY – fiduciary duty – whether developer of building owed a fiduciary duty to owners corporation – whether developer in breach of fiduciary duty by reason of the registration of the strata management statement – whether there was informed consent – whether developer in breach of fiduciary duty by reason of decisions taken by meetings of the owners corporation after the strata plan and strata management statement registered; CONTRACT – whether building manager or strata manager liable to owners corporation in relation to allocation of costs of shared expenses – whether clauses in contract with strata manager limited quantum of damages and time during which proceedings to be commenced enlivened – whether owners corporation had shown damage arising from alleged breaches of contract; STRATA TITLES – whether owners corporation and owner of remaining lots were members entitled to vote at meeting of the building management committee which approved proposed relocation of shared facilities – whether owners corporation estopped by convention from asserting remaining lot owners not entitled to vote because of non-payment of interest on arrears of levies – whether owners corporation entitled to withhold consent to such proposed relocation following resolution of building management committee approving same – relationship of provisions in strata management statement concerning such resolution and provisions entitling owners corporation to withhold consent in certain circumstances – proper construction of strata management statement – whether owners corporation unreasonably withheld consent to proposed relocation of shared facilities; STRATA TITLES – levies – whether owners corporation in arrears – quantum of arrears – whether electricity recoveries properly charged to owners corporation Legislation Cited: Contracts Review Act 1980 (NSW) Conveyancing (Sale of Land) Regulation 2005 (NSW) Conveyancing (Sale of Land) Regulation 2010 (NSW) Corporations Act 2001 (Cth) Environmental Planning and Assessment Act 1979 (NSW) Evidence Act 1995 (NSW) Property, Stock and Business Agents Act 2002 (NSW) Strata Schemes (Freehold Development) Act 1973 (NSW) Strata Schemes Management Act 1996 (NSW) Cases Cited: Aequitas Ltd v AEFC [2001] NSWSC 14; 19 ACLC 1006 BP Refinery (Westernport) Pty Ltd v Hastings Shire Council (1977) 180 CLR 266 Brambles Holdings Limited v Bathurst City Council [2001] NSWCA 61; 53 NSWLR 153 Breen v Williams (1996) 186 CLR 71 Chan v Zacharia (1984) 154 CLR 178 Commonwealth v Verwayen (1990) 170 CLR 394 Community Association DP No 270180 v Arrow Asset Management Pty Ltd [2007] NSWSC 527 Ermogenous v Greek Orthodox Community of SA Inc (2002) 209 CLR 95 Houghton v Immer (No 155) Pty Ltd (1997) 44 NSWLR 46 In the matter of Metal Storm Ltd (subject to Deed of Company Arrangement) [2014] NSWSC 813; 100 ACSR 637 Maguire v Makaronis (1997) 188 CLR 449 Meriton Apartments Pty Limited v The Owners Strata Plan No 72381 [2015] NSWSC 202; 105 ACSR 1 Mount Bruce Mining Pty Ltd v Wright Prospecting Pty Ltd [2015] HCA 37; 325 ALR 188 Peters' American Delicacy Co Ltd v Heath (1939) 61 CLR 457 Queensland Mines Limited v Hudson (1978) 52 ALJR 399 Re Property Force Consultancy Pty Ltd (In Liquidation) [1997] 1 Qd R 300 Re Steel and Others and The Conveyancing (Strata Titles) Act 1961 (1968) 88 WN (Pt 1) (NSW) 467 Redwood Master Fund Ltd v TD Bank Europe Ltd [2002] EWHC 2703 (Ch) Regal (Hastings) Ltd v Gulliver [1967] 2 AC 134 Ryledar Pty Ltd v Euphoric Pty Ltd [2007] Aust Contract Reports 90-254; 69 NSWLR 603 Silovi Pty Ltd v Barbaro (1988) 13 NSWLR 466 The Owners Corporation Strata Plan 70672 v The Trustees of the Roman Catholic Church for the Archdiocese of Sydney [2011] NSWSC 973 Warman International Limited v Dwyer (1995) 182 CLR 544 Waterman v Gerling Australia Insurance Co Pty Ltd (2005) 65 NSWLR 300 Wilkie v Gordian Runoff Ltd [2005] HCA 17; 221 CLR 522 Texts Cited: Alex Ilkin, NSW Strata and Community Schemes Management and the Law, (4th ed 2007, Lawbook Co) J D Heydon, M J Leeming and P G Turner, Meagher, Gummow and Lehane's Equity: Doctrines & Remedies, (5th ed 2014, LexisNexis Butterworths) J W Carter, The Construction of Commercial Contracts, (2013, Hart Publishing) K Lewison and D Hughes, The Interpretation of Contracts in Australia, (2012, Lawbook Co) N Seddon, R Bigwood, M Ellinghaus, Cheshire & Fifoot: Law of Contract, (10th ed 2012, LexisNexis) P W Young, C Croft and M L Smith, On Equity, (2009, Lawbook Co) Category: Principal judgment Parties: Parties in 2013/239085: The Owners – Strata Plan No 74602 (Plaintiff) Eastmark Holdings Pty Ltd (In Receivership) (First Defendant) 1 Denison Street Holdings Pty Ltd (In Receivership) (Second Defendant) Strata Associates Pty Limited (Fourth Defendant) Savills (NSW) Pty Limited (Fifth Defendant)