Owners - Strata Plan No 43551 v Walter Construction Group Ltd

NEW SOUTH WALES COURT OF APPEAL

CITATION:      The Owners-Strata Plan No 43551 v Walter Construction Group Limited [2004]  NSWCA 429

FILE NUMBER(S):
41196/03

HEARING DATE(S):               15 September 2004

JUDGMENT DATE: 23/11/2004

PARTIES:
The Owners Strata Plan No 43551 (Appellant)
Walter Construction Group Limited (Respondent)

JUDGMENT OF:       Spigelman CJ Ipp JA McColl JA   

LOWER COURT JURISDICTION: Supreme Court

LOWER COURT FILE NUMBER(S):          055051/01

LOWER COURT JUDICIAL OFFICER:     Master Macready

COUNSEL:
Mr F Corsaro SC / Mr Young (Appellant)
Mr M Pembroke SC / Mr R Dubler (Respondent)

SOLICITORS:
Andreones Pty Ltd Lawyers (Appellant)
Corrs Chambers Westgarth (Respondent)

CATCHWORDS:
Practice & Procedure
Standing of owners corporation to sue in negligence with respect to common property
Meaning of section 227 of the Strata Scheme Management Act 1996
Nature of an owners corporation's statutory agency

LEGISLATION CITED:
Strata Schemes Management Act 1996
Strata Schemes (Freehold Development) Act 1973
Interpretation Act 1987
Supreme Court Rules 1970

DECISION:
Leave to appeal granted, appeal allowed.

JUDGMENT:

- 17 -

IN THE SUPREME COURT
OF NEW SOUTH WALES
COURT OF APPEAL

41196/03

SPIGELMAN CJ
IPP JA
McCOLL JA

Tuesday 23 November 2004

THE OWNERS-STRATA PLAN No 43551  v  WALTER CONSTRUCTION GROUP LIMITED

Judgment

1. SPIGELMAN CJ:  The Appellant seeks leave to appeal from a judgment of Master Macready on a separate question in proceedings instituted in the Technology and Construction List of the Supreme Court.  As will presently appear, significant questions of law arise and leave to appeal should be granted.

2. The Appellant is constituted as an owners corporation under s11 of the Strata Schemes Management Act 1996 (“the Management Act”) and, accordingly, is a body corporate for purposes of the Strata Schemes (Freehold Development) Act 1973 (“the Freehold Development Act”).  Upon registration of Strata Plan No 43551 on 30 March 1993, the “common property” in the strata plan vested in the Appellant pursuant to the sections I will hereinafter set out.

3. The Appellant is the owners corporation of a ten storey residential building in Bondi Junction, Sydney.  The Respondent was the builder and, according to the statement of claim issued by the Appellant, was guilty of negligence in and about the construction of the building.

4. There are 52 lots in the strata plan.  Twenty-nine of the 52 lots were sold after 2 November 1994, when at least some of the alleged defects had become manifest.  The Respondent’s case is that the lot owners who acquired their lots after this date have no relevant cause of action against the builder and that, therefore, the Appellant has no cause of action.

5. The Respondent argued, successfully, before the Master that the Appellant had no standing to institute the proceedings.

6. On the pleadings, the Respondent put in issue the Appellant’s standing. Under Pt 31 r 2 of the Supreme Court Rules, the Court ordered, in accordance with the Respondent’s Notice of Motion, that certain paragraphs of the Defence be separately determined.  The Master identified the issue to be:

   “Does the plaintiff, as an owners corporation, have standing to sue in…