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

The appeal in *Australia City Properties Management Pty Ltd v The Owners - Strata Plan No 65111* concerned a dispute between a strata management company and the owners corporation of a strata scheme. The owners corporation had purported to terminate a caretaker agreement with the management company, alleging breaches of contract. The management company disputed the validity of the termination and sought damages. The case was heard by Bathurst CJ, Payne and McCallum JJA in the Court of Appeal of New South Wales.

The central legal issues before the Court of Appeal were whether the owners corporation had validly terminated the caretaker agreement, and if not, whether the management company was entitled to damages for breach of contract. Specifically, the court had to determine whether the conduct of the management company constituted gross negligence or gross misconduct as defined by the agreement, and whether the owners corporation's actions amounted to a repudiation of the contract. The court also considered the interpretation of the caretaker agreement, including implied terms, and the application of relevant strata management legislation.

The Court of Appeal found that the owners corporation had not established that the management company had engaged in gross negligence or gross misconduct. The court interpreted the terms of the caretaker agreement according to their natural and ordinary meaning, finding no ambiguity. It was held that the owners corporation's purported termination was therefore wrongful. The court also considered whether the owners corporation had repudiated the contract, but ultimately found that the management company had not accepted any such repudiation and remained willing to perform its obligations.

Consequently, the Court of Appeal allowed the appeal, set aside the primary judge's order regarding damages, and declared that the owners corporation had breached the caretaker agreement by failing to comply with a specific procedure. The court ordered judgment to be entered for the management company in the sum of $1,007,896.13. The cross-appeal was dismissed, and the matter of the sale of a specific lot was remitted to the primary judge. The owners corporation was ordered to pay the management company's costs of the appeal and cross-appeal.