Strata Corporation 12753 Inc v REN

Strata Corporation 12753 Inc took legal action against REN, a unit holder, over building work carried out on Unit 24 within a strata scheme and the subsequent leasing of part of that unit. The dispute was heard in the Supreme Court of South Australia. The central issues before the court were whether the work done on Unit 24 required authorisation under the Strata Titles Act 1988 and, if so, whether such authorisation had been granted. The court also considered whether the respondent required unanimous resolution to lease or licence parts of Unit 24 and, if so, whether such authorisation had been obtained.

The applicant argued that the work done on Unit 24 constituted ‘prescribed work’ under the Act, which required a special resolution for authorisation. The applicant further argued that, as no such resolution had been passed, the works were carried out in breach of the Act. The applicant also contended that leasing or licencing of parts of Unit 24 required unanimous resolution and, as no such resolution had been passed, those actions were in breach of the Act. The respondent, however, argued that development approval for the work under the Development Act 1993 meant no further authorisation was required. Alternatively, the respondent argued that the development approval constituted an amendment to the strata plan and, by purchasing Unit 24, each member of the strata corporation had agreed to the works. The respondent further submitted that a retrospective special resolution had been passed authorising the works.

The court found that the work carried out on Unit 24 did not constitute ‘prescribed work’ and, as such, did not require a special resolution. The court also found that the respondent had been authorised to grant leases or licences of part of Unit 24, as no unanimous resolution was necessary. The court held that the respondent had not breached the Act in carrying out the work or in leasing or licencing parts of Unit 24. The applicant's claims were dismissed.