Tan v The Owners Strata Plan 22014 (No 2)

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.