Owners - Strata Plan 11011 v Integrated Project Services Pty Ltd

The case of Owners - Strata Plan 11011 v Integrated Project Services Pty Ltd involved a dispute between an owners’ corporation and a law firm, with the central issue being the proper authority to instruct the law firm in relation to litigation. The dispute arose from conflicting instructions given to the law firm by different parties within the owners’ corporation. The director of lot owners, who held a minority interest, was appointed by the corporation to provide instructions regarding the litigation. However, a meeting of the lot owners, who held the majority interest, purported to instruct the law firm to settle the dispute, contrary to the representative's instructions.

The primary legal issues the court had to address were whether the plaintiff's solicitors and barrister were required to follow the instructions of the representative or those of the majority lot owners, and whether the representative's instructions were properly given. The court also needed to determine whether the conferral of authority to the representative by the owners' corporation contravened the Strata Schemes Management Act 1996 (NSW), particularly section 13(3) concerning the delegation of authority, and whether the representative was employed under section 13(1) of the Act.

In its reasoning, the court held that the plaintiff's solicitors and barrister were obliged to follow the instructions properly given by the representative, as the representative's authority had not been revoked. The court found that there was nothing improper in the representative taking a position contrary to that taken by the majority lot owners. Regarding the Strata Schemes Management Act, the court held that the conferral of authority to the representative was not a delegation of the owners' corporation's functions, and the concept of employment under section 13(1) extends beyond appointing individuals as employees. Consequently, the representative was authorised to instruct the law firm and give the usual undertaking as to damages on behalf of the owners' corporation, but not to terminate the lawyers' retainer.