Khadivzad v The Owners - Strata Plan 53457

The parties involved in the case are Khadivzad, an owner of a lot in the strata plan, and The Owners – Strata Plan 53457, which is the Owners Corporation responsible for the administration of the strata plan. The dispute arose due to a by-law that granted exclusive rights to certain lot owners to use parts of the common property for car parking. The by-law was allegedly repealed in 1999 by a special resolution of the Owners Corporation without obtaining the written consent of the affected lot owners, as required by section 52(1)(a) of the Strata Schemes Management Act 1996 (NSW) ("SSM Act"). The Change of By-Laws was recorded on the title within two years of the repeal. In 2018, proceedings were commenced to challenge the validity of the repeal, and the effect of section 52(3) of the SSM Act was a central issue in the case.

The primary legal issue the court had to decide was whether the repeal of the by-law was valid despite the failure to obtain the requisite consent of the affected lot owners. Section 52(3) of the SSM Act provides a conclusive presumption after two years that all conditions and preliminary steps precedent to the making of a repealing by-law have been complied with and performed. The court had to determine whether the requisite consent of the owners was a condition or preliminary step precedent to the making of a repealing by-law and, if so, whether this condition or step was sufficiently complied with and performed within the two-year period.

The court held that the requisite consent of the owners is a condition or preliminary step precedent to the making of a repealing by-law. However, since the Change of By-Laws was recorded on the title within two years of the repeal, the court applied the conclusive presumption under section 52(3) of the SSM Act. This presumption meant that all conditions and preliminary steps, including the requisite consent of the owners, were deemed to have been complied with and performed. Consequently, the court dismissed the proceedings, finding that the repeal of the by-law was valid despite the failure to obtain the requisite consent of the affected lot owners.