Meriton Apartments Pty Limited v The Owners of Strata Plan No. 72381 (No. 2)

The case involves Meriton Apartments Pty Limited, a caretaker, and two strata owners corporations. The dispute arose from the caretaker's Caretaker Agreement under the Strata Schemes Management Act 1996, Part 4A. The caretaker had been appointed in 2004 to provide services to two strata schemes and one additional stratum lot in a commercial/residential building complex. The caretaker, the two owners corporations, and the owner of the stratum lot were all parties to the Caretaker Agreement. One of the owners corporations alleged breaches of the agreement and terminated it in July 2012. The caretaker challenged the termination, and the court found that the termination was unjustified and constituted a repudiation of the agreement. The caretaker continued to offer performance of the agreement but did not accept the repudiation. The court determined that specific performance of the Caretaker Agreement was not possible following the repudiation, and the caretaker could not claim the entire promised benefit of the agreement. Instead, the caretaker was entitled to damages for the loss of profit on the Caretaker Agreement.

The court also considered whether the developer, who established one of the owners corporations in April 2004, owed a fiduciary duty as a promoter to the corporation in relation to the Caretaker Agreement. The owners corporation resolved at an Extraordinary General Meeting in October 2004 to be bound by the agreement. The caretaker argued that the developer breached its fiduciary duty by failing to disclose information about its revenues and profits before the resolution. The court found that the developer owed a fiduciary duty as a promoter but did not establish a breach of that duty. Even if a breach had occurred, the court found that the owners corporation was not barred by delay from any grant of relief setting aside the Caretaker Agreement.

The court concluded that the account of profits for the breach of fiduciary duty was not available, and equitable compensation was not available either. The court found that the caretaker's loss of profit on the Caretaker Agreement was the appropriate measure of damages for the owners corporation's breach of the agreement. The caretaker was entitled to damages for its loss of profit on the agreement.