The Owners - Strata Plan 5709 v Andrews

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.