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Tan v The Owners Strata Plan 22014 (No 2)

Tan v The Owners Strata Plan 22014 (No 2)

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Case Copied 17 December 2015 84 min read

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Supreme Court

New South Wales

Amendment notes

Medium Neutral Citation: Tan v The Owners Strata Plan 22014 (No 2) [2015] NSWSC 1920
Hearing dates: 14 October 2015
Date of orders: 17 December 2015
Decision date: 17 December 2015
Jurisdiction: Equity
Before: Robb J
Decision:
Parties are to bring in short minutes of order to reflect these reasons for judgment.

Catchwords:
PROCEDURE – costs – whether to order owners corporation to indemnify plaintiffs for their costs – plaintiffs members of executive committee – NCAT orders vesting all functions of owners corporation in strata manager – apparent inability of owners corporation to appeal – rule in Foss v Harbottle applies to owners corporations – whether interests of justice exception to the proper plaintiff rule satisfied – owners corporation ordered to indemnify plaintiffs but not for costs incurred in pursuit of plaintiffs’ own interests
PROCEDURE – costs – whether plaintiffs should pay the third defendant’s costs – not appropriate to order plaintiffs to pay third defendant’s costs – third defendant effectively appointed as the contradictor by the court – provisionally, the third defendant entitled to an indemnity from the owners corporation - owners corporation given leave to make submissions on whether it should be ordered to indemnify third defendant
Legislation Cited: Civil and Administrative Tribunal Act 2013 (NSW)
Civil Procedure Act 2005 (NSW)
Corporations Act 2001 (Cth)
Strata Schemes Management Act 1996 (NSW)
Supreme Court Act 1970 (NSW)
Cases Cited: 2 Elizabeth Bay Road Pty Ltd v The Owners – Strata Plan No 73943 [2014] NSWCA 409; (2014) 88 NSWLR 488
Aliprandi v Griffiths Vintners Pty Ltd (in liq) (1991) 6 ACSR 250
APX Projects Pty Ltd v The Owners – Strata Plan No 64025 [2015] NSWSC 1250
Australian Securities and Investments Commission v Farley [2001] NSWSC 326; (2001) 51 NSWLR 494
Biala Pty Ltd v Mallina Holdings Pty Ltd (1993) 13 WAR 83 Buzrio Pty Ltd v Consumer, Trader & Tenancy Tribunal [2009] NSWSC 836
Buzrio Pty Ltd v Consumer, Trader and Tenancy Tribunal (No 2) [2009] NSWSC 937
Carpenter v Pioneer Park Pty Ltd (in liq) [2004] NSWSC 1007; (2004) 51 ACSR 299
Carre v Owners Corporation – SP 53020 [2003] NSWSC 397; (2003) 58 NSWLR 302
Eastmark Holdings Pty Ltd v Kabraji [2013] NSWSC 1763; (2013) 97 ACSR 161
Farrow v Registrar of Building Societies [1991] 2 VR 589
Fiduciary Ltd v Morningstar Research Pty Ltd [2005] NSWSC 442; (2005) 53 ACSR 732
Hill v King (1993) 31 NSWLR 654
Meagher v Stephenson (1993) 30 NSWLR 736
Oates v Consolidated Capital Services Ltd [2009] NSWCA 183; (2009) 76 NSWLR 69
Re the Minister for Immigration and Ethnic Affairs; ex parte Lai Qin (1997) 186 CLR 622
Re Wan Jia (Australia) International Development Pty Ltd [2012] NSWSC 1007
Reading Entertainment Australia Pty Ltd v Whitehorse Property Group Pty Ltd (prov liq apptd) [2007] VSCA 309
Tan v The Owners Strata Plan No 22014 [2015] NSWSC 71
The Owners – Strata Plan No 70798 v…

Grounds of appeal

[14] The appellant contends that the primary judge erred in finding that the respondent had discharged the onus of establishing the matters required under the relevant provision.

[15] It was submitted that his Honour failed to give adequate weight to the evidence of the second witness, and that the findings of fact were not reasonably open on the material before the Court.

[16] The respondent, for its part, submits that no error is disclosed, and that the conclusions reached were well within the range of outcomes available to the primary judge.

Consideration

[17] It is convenient to deal first with the question of construction, as the resolution of that issue informs the remaining grounds advanced by the appellant.

[18] For the reasons that follow, we are of the view that the appeal should be allowed in part and the matter remitted for further determination.

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Details

Case: [2015] NSWSC 1920
Decision Date: 17 December 2015

CaseChat Overview and Summary

The case of Tan v The Owners Strata Plan 22014 (No 2) involved the plaintiffs, who were members of the executive committee of the owners corporation, and the owners corporation itself. The plaintiffs sought an order for the owners corporation to indemnify them for their legal costs incurred in proceedings before the New South Wales Civil and Administrative Tribunal (NCAT), where the NCAT had ordered that all functions of the owners corporation be vested in a strata manager. The dispute centred around whether the owners corporation should be ordered to indemnify the plaintiffs for these costs and whether the plaintiffs should pay the costs of the third defendant.

The legal issues before the court included whether the interests of justice exception to the proper plaintiff rule was satisfied, and whether the plaintiffs should be indemnified for their costs. The court also considered whether the plaintiffs should pay the third defendant's costs, given that the third defendant had been effectively appointed as the contradictor by the court. The court examined the applicability of the rule in Foss v Harbottle to owners corporations and the circumstances under which the interests of justice exception might apply.

The court found that the interests of justice exception to the proper plaintiff rule was satisfied in this case. Consequently, the owners corporation was ordered to indemnify the plaintiffs, but not for costs incurred in pursuit of the plaintiffs' own interests. The court also ruled that it was not appropriate to order the plaintiffs to pay the third defendant's costs. However, the third defendant was provisionally entitled to an indemnity from the owners corporation. The owners corporation was granted leave to make submissions on whether it should be ordered to indemnify the third defendant.

Orders