The Owners of Strata Plan No 3397 v Tate

The Owners of Strata Plan No 3397 (the Owners) appealed to the Court of Appeal of New South Wales against a decision concerning the interpretation of a by-law granting exclusive use of a lift to a proprietor, Mr Tate (the respondent). The dispute centred on the allocation of costs for the repair, maintenance, renewal, and replacement of the lift, and how these obligations related to the respondent's general liability for levies for the upkeep of common property.

The primary legal issues before the Court of Appeal were: (1) the proper construction of the by-law granting exclusive use of the lift to the respondent, including the terms and conditions attaching to that exclusive use; and (2) the extent to which the respondent was liable for the costs of the lift's repair, maintenance, renewal, and replacement, and whether this liability superseded or was in addition to their obligation to meet general levies for common property upkeep.

The Court of Appeal held that by-laws in strata schemes are to be construed objectively, considering their constitutional function in regulating the rights and liabilities of proprietors within the statutory context of the *Strata Schemes Management Act 1996*. The Court emphasised that a tight rein should be kept on recourse to surrounding circumstances when interpreting such by-laws. Applying these principles, the Court found that the by-law granting exclusive use of the lift did not absolve the respondent from their proportionate share of the costs associated with the lift's upkeep as part of the common property. The Court allowed the appeal and cross-appeal, setting aside the primary judge's orders and ordering judgment for the respondent for a specific amount representing overpayments, with interest. The costs of the trial and appeal were also allocated between the parties.