The Owners - Strata Plan 5709 v Andrews - [2009] NSWCA 189

New South Wales

Court of Appeal

CITATION: The Owners - Strata Plan 5709 v Andrews [2009] NSWCA 189

HEARING DATE(S): 3 June 2009

JUDGMENT DATE:
10 July 2009

JUDGMENT OF: Hodgson JA at 1; Tobias JA at 72; Young JA at 73

DECISION: (1) Appeal allowed.
(2) The judgment and orders of the District Court of New South Wales made on 3 July and 17 July 2008 in proceedings 3831 of 2006 are set aside.
(3) Judgment be entered in favour of the appellant in the sum of $255,685.62, to take effect as at 3 June 2009.
(4) Order that the respondent in addition pay interest on unpaid levies up to and including 3 June 2009, pursuant to section 79 of the Strata Schemes Management Act 1996, in the sum of $77,664.11, this order also to take effect as at 3 June 2009.
(5) Order that the respondents pay the costs of the proceedings in the District Court of New South Wales.
(6) Order that the respondents pay the costs of the appeal, and that they have a certificate under the Suitors’ Fund Act 1951 if otherwise eligible.

CATCHWORDS: STRATA SCHEMES – Orders appointing strata managing agents to exercise all the functions of an owners corporation – Meetings at which resolutions raising levies purportedly passed – Whether strata managing agent exercised the function of the owners corporation at such meetings – Whether there were limitations on the appointment of the strata managing agents – Whether certain functions of the owners corporation still had to be exercised at properly constituted meetings.

LEGISLATION CITED: Strata Schemes Management Act 1996 ss 3, 27, 28, 31, 32, 62, 66, 69, 75, 76, 78, 79, 80, 80D, 149, 153, 162, Schedule 2.

CATEGORY: Principal judgment

CASES CITED: Re Compaction Systems Pty Limited [1976] 2 NSWLR 477
Royal Mutual Benefit Building Society v Sharman [1963] 1 WLR 581
Smith v The Body Corporate of Strata Plan No 22669 (1997) NSW Titles Cases 80-046

PARTIES: THE OWNERS STRATA PLAN No.5709 (appellant)
Anthony ANDREWS (first respondent)
Michele ANDREWS (second respondent)

FILE NUMBER(S): CA 40319/08

COUNSEL: B A COLES QC/ P M BARHAM (appellant)
R BEECH-JONES SC/ BELLAMY/ ADAIR (respondents)

SOLICITORS: Grace Lawyers (appellant)
Diamond Conway (respondents)

LOWER COURT JURISDICTION: District Court

LOWER COURT FILE NUMBER(S): DC 3831/06

LOWER COURT JUDICIAL OFFICER: O'Toole DCJ

LOWER COURT DATE OF DECISION: 17 June 2008, 17 July 2008

CA 40319/08
DC 3831/06

HODGSON JA
TOBIAS JA
YOUNG JA
10 JULY 2009

THE OWNERS STRATA PLAN No 5709 v Anthony ANDREWS and Another

Judgment

1 HODGSON JA: Strata Plan 5709 consists of two townhouses, two carport garages and common property situated in Cremorne. The respondents Mr and Mrs Andrews are registered proprietors as joint tenants of Lot 2 in that Strata Plan, and are entitled to forty per cent of strata scheme units. Mr and Mrs Metford are registered proprietors of Lot 1 in the Strata Plan, and are entitled to sixty per cent of the strata scheme units. The appellant (OSP)…

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: [2009] NSWCA 189
Decision Date: 10 July 2009

CaseChat Overview and Summary

The Owners - Strata Plan 5709 (the appellant) appealed to the Court of Appeal of New South Wales against a decision of the District Court which had dismissed its claim for unpaid levies against Mr. Andrews (the respondent). The dispute concerned whether a strata managing agent appointed to exercise all functions of the owners corporation could validly pass resolutions to raise levies at meetings, or whether certain functions, including the raising of levies, still required exercise at properly constituted meetings of the owners corporation.

The Court of Appeal was required to determine whether the strata managing agent had exceeded its authority by purporting to exercise the function of the owners corporation in passing resolutions to raise levies. Specifically, the court had to consider the limitations on the appointment of strata managing agents and whether the legislation mandated that certain functions of the owners corporation must still be exercised at properly constituted meetings, notwithstanding the appointment of an agent.

The Court of Appeal found that the strata managing agent's appointment did not empower it to exercise all functions of the owners corporation, particularly those requiring a resolution of the owners corporation itself. The court reasoned that the legislation contemplated that certain fundamental functions, such as the raising of levies, must be undertaken by the owners corporation acting through properly convened meetings. Consequently, the resolutions purportedly passed by the strata managing agent to raise levies were invalid.

The appeal was allowed, and the judgment of the District Court was set aside. Judgment was entered in favour of the appellant for the sum of $255,685.62, plus interest of $77,664.11, with both sums to take effect as at 3 June 2009. The respondent was also ordered to pay the costs of the proceedings in the District Court and the costs of the appeal.

Orders

Orders of the court

(1) Appeal allowed. (2) The judgment and orders of the District Court of New South Wales made on 3 July and 17 July 2008 in proceedings 3831 of 2006 are set aside. (3) Judgment be entered in favour of the appellant in the sum of $255,685.62, to take effect as at 3 June 2009. (4) Order that the respondent in addition pay interest on unpaid levies up to and including 3 June 2009, pursuant to section 79 of the Strata Schemes Management Act 1996, in the sum of $77,664.11, this order also to take effect as at 3 June 2009. (5) Order that the respondents pay the costs of the proceedings in the District Court of New South Wales. (6) Order that the respondents pay the costs of the appeal, and that they have a certificate under the Suitors' Fund Act 1951 if otherwise eligible.

Background

Background to the litigation

Full text does not contain this section.

Evidence

Evidence Before The Court

Full text does not contain this section.

Decision

Reasons for decision

Full text does not contain this section.

Ratio Decidendi

Legal Principle Established

Full text does not contain this section.

CITATION:	The Owners - Strata Plan 5709 v Andrews [2009] NSWCA 189
HEARING DATE(S):	3 June 2009
JUDGMENT DATE:	10 July 2009
JUDGMENT OF:	Hodgson JA at 1; Tobias JA at 72; Young JA at 73
DECISION:	(1) Appeal allowed. (2) The judgment and orders of the District Court of New South Wales made on 3 July and 17 July 2008 in proceedings 3831 of 2006 are set aside. (3) Judgment be entered in favour of the appellant in the sum of $255,685.62, to take effect as at 3 June 2009. (4) Order that the respondent in addition pay interest on unpaid levies up to and including 3 June 2009, pursuant to section 79 of the Strata Schemes Management Act 1996, in the sum of $77,664.11, this order also to take effect as at 3 June 2009. (5) Order that the respondents pay the costs of the proceedings in the District Court of New South Wales. (6) Order that the respondents pay the costs of the appeal, and that they have a certificate under the Suitors’ Fund Act 1951 if otherwise eligible.
CATCHWORDS:	STRATA SCHEMES – Orders appointing strata managing agents to exercise all the functions of an owners corporation – Meetings at which resolutions raising levies purportedly passed – Whether strata managing agent exercised the function of the owners corporation at such meetings – Whether there were limitations on the appointment of the strata managing agents – Whether certain functions of the owners corporation still had to be exercised at properly constituted meetings.
LEGISLATION CITED:	Strata Schemes Management Act 1996 ss 3, 27, 28, 31, 32, 62, 66, 69, 75, 76, 78, 79, 80, 80D, 149, 153, 162, Schedule 2.
CATEGORY:	Principal judgment
CASES CITED:	Re Compaction Systems Pty Limited [1976] 2 NSWLR 477 Royal Mutual Benefit Building Society v Sharman [1963] 1 WLR 581 Smith v The Body Corporate of Strata Plan No 22669 (1997) NSW Titles Cases 80-046
PARTIES:	THE OWNERS STRATA PLAN No.5709 (appellant) Anthony ANDREWS (first respondent) Michele ANDREWS (second respondent)
FILE NUMBER(S):	CA 40319/08
COUNSEL:	B A COLES QC/ P M BARHAM (appellant) R BEECH-JONES SC/ BELLAMY/ ADAIR (respondents)
SOLICITORS:	Grace Lawyers (appellant) Diamond Conway (respondents)
LOWER COURT JURISDICTION:	District Court
LOWER COURT FILE NUMBER(S):	DC 3831/06
LOWER COURT JUDICIAL OFFICER:	O'Toole DCJ
LOWER COURT DATE OF DECISION:	17 June 2008, 17 July 2008