Owners Corporation SP6534 v Elkhouri; Owners Corporation SP6534 v Perpetual Corporate Trust Ltd

The Supreme Court of New South Wales, constituted by Ward P, McHugh JA, and Griffiths AJA, considered appeals in two related matters brought by Owners Corporation SP6534 against Mr Elkhouri and Perpetual Corporate Trust Ltd. The dispute concerned the validity and enforceability of a by-law of the Owners Corporation, specifically a condition that purported to terminate exclusive use rights if owners failed to comply with their obligations under the by-law. The Owners Corporation sought declarations that the condition was unjust, harsh, oppressive, or unconscionable, and that the respondents were liable for damages and costs under the by-law.

The primary legal issues before the Court were whether the Supreme Court had jurisdiction to make a declaration that the condition of the by-law was unjust, given that the *Strata Schemes Management Act 2015* (NSW) conferred the function of finding a by-law unjust on the NSW Civil and Administrative Tribunal. Further, the Court had to determine whether the condition itself was unjust, harsh, oppressive, or unconscionable, and whether the respondents were liable in damages for failing to comply with their obligations under the by-law, including liability for reasonable costs and expenses incurred in recovering outstanding levies and claiming damages.

The Court held that the Supreme Court did not have jurisdiction to make a declaration that the condition of the by-law was unjust, as this function was exclusively vested in the Tribunal under the *Strata Schemes Management Act 2015*. However, the Court found that the condition was not unjust, harsh, oppressive, or unconscionable. It reasoned that the condition was a legitimate mechanism for the Owners Corporation to enforce compliance with by-laws and to recover outstanding levies and associated costs. The Court also determined that the respondents were liable for damages and costs as provided for in the by-law.

The Court ordered that the appeals be allowed in part, setting aside the orders of the primary judge and remitting the proceedings to the primary judge for further determination on the quantum of damages and costs.