Australia City Properties Management Pty Ltd v The Owners - Strata Plan No 65111

The case of Australia City Properties Management Pty Ltd v The Owners - Strata Plan No 65111 concerned a dispute regarding the duration of a caretaker agreement and the circumstances under which an owners corporation could terminate such an agreement. The dispute was heard by the Supreme Court of New South Wales. The primary issues before the court were whether the caretaker agreement, as varied in 2010 and 2015, was protected by transitional provisions in the legislation and if the caretaker was guilty of gross misconduct or gross negligence warranting termination of the agreement.

The court found that the caretaker agreement, as varied, did not fall within the transitional provisions that protected certain caretaker agreements from the new legislative regime introduced in 2003. Consequently, the agreement was subject to the new legislation's maximum duration of 10 years from the date it was authorised. Regarding the termination of the caretaker agreement, the court held that the caretaker was indeed guilty of gross misconduct for misusing the owners corporation's electricity supply and gross negligence for failing to report unresolved faults in the fire alarm system. The court ruled that the owners corporation was entitled to terminate the agreement under the terms of clause 9.3 of the caretaker agreement, and this decision was upheld despite the lack of prior approval from a general meeting of the owners corporation.

The final orders of the court recognised the caretaker's entitlement to damages and compensation for the deprivation of possession of the caretaker lot, as per the usual undertaking in the caretaker agreement. The court also noted that while the owners corporation had breached the agreement by taking possession of the caretaker lot, such conduct was not repudiatory of the caretaker's rights. The court's decision highlighted the importance of adhering to the statutory and contractual frameworks governing caretaker agreements and the termination of such agreements in strata title settings.