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The Owners - Strata Plan 74602 v Eastmark Holdings Pty Ltd; Eastmark Holdings Pty Ltd v The Owners - Strata Plan 74602

The Owners - Strata Plan 74602 v Eastmark Holdings Pty Ltd; Eastmark Holdings Pty Ltd v The Owners - Strata Plan 74602

Case [2015] NSWSC 1981 24 December 2015

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Supreme Court

New South Wales

Medium Neutral Citation: The Owners – Strata Plan 74602 v Eastmark Holdings Pty Ltd; Eastmark Holdings Pty Ltd v The Owners – Strata Plan 74602 [2015] NSWSC 1981
Hearing dates: 21 September – 14 October, 23 October 2015
Decision date: 24 December 2015
Jurisdiction: Equity - Technology and Construction List
Before: Stevenson J
Decision:
Parties to make submissions as to what further matters remain for consideration and what orders should be made to give effect to these reasons

Catchwords: STRATA TITLES – mixed residential, commercial, retail and car parking development – allocation of the costs of shared services – proper construction of strata management statement – whether allocation of costs of shared services under strata management statement fair and reasonable – whether strata management statement an unjust contract for the purposes of the Contracts Review Act 1980 – whether strata management statement should be re-written – whether any amendment to strata management statement should be retrospective; EQUITY – fiduciary duty – whether developer of building owed a fiduciary duty to owners corporation – whether developer in breach of fiduciary duty by reason of the registration of the strata management statement – whether there was informed consent – whether developer in breach of fiduciary duty by reason of decisions taken by meetings of the owners corporation after the strata plan and strata management statement registered; CONTRACT – whether building manager or strata manager liable to owners corporation in relation to allocation of costs of shared expenses – whether clauses in contract with strata manager limited quantum of damages and time during which proceedings to be commenced enlivened – whether owners corporation had shown damage arising from alleged breaches of contract; STRATA TITLES – whether owners corporation and owner of remaining lots were members entitled to vote at meeting of the building management committee which approved proposed relocation of shared facilities – whether owners corporation estopped by convention from asserting remaining lot owners not entitled to vote because of non-payment of interest on arrears of levies – whether owners corporation entitled to withhold consent to such proposed relocation following resolution of building management committee approving same – relationship of provisions in strata management statement concerning such resolution and provisions entitling owners corporation to withhold consent in certain circumstances – proper construction of strata management statement – whether owners corporation unreasonably withheld consent to proposed relocation of shared facilities; STRATA TITLES – levies – whether owners corporation in arrears – quantum of arrears – whether electricity recoveries properly charged to owners corporation
Legislation Cited: Contracts Review Act 1980 (NSW)
Conveyancing (Sale of Land) Regulation 2005 (NSW)
Conveyancing (Sale of Land) Regulation 2010 (NSW)
Corporations Act 2001 (Cth)
Environmental Planning and Assessment Act 1979 (NSW)
Evidence Act 1995 (NSW)
Property, Stock and Business Agents Act 2002 (NSW)
Strata Schemes (Freehold Development) Act 1973 (NSW)
Strata Schemes Management Act 1996 (NSW)
Cases Cited: Aequitas Ltd v AEFC [2001] NSWSC 14; 19 ACLC 1006
BP Refinery (Westernport) Pty Ltd 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

AGLC: The Owners - Strata Plan 74602 v Eastmark Holdings Pty Ltd; Eastmark Holdings Pty Ltd v The Owners - Strata Plan 74602 [2015] NSWSC 1981
Case: [2015] NSWSC 1981
Decision Date: 24 December 2015

CaseChat Overview and Summary

The Owners - Strata Plan 74602 and Eastmark Holdings Pty Ltd were parties to a dispute concerning a mixed residential, commercial, retail, and car parking development. The Owners - Strata Plan 74602, representing the owners corporation, sought to challenge the allocation of costs for shared services, the fairness of the strata management statement, and the potential existence of a fiduciary duty owed by Eastmark to the owners corporation. The dispute was heard in the Supreme Court of New South Wales. The central legal issues involved the interpretation and fairness of the strata management statement, the existence and breach of a fiduciary duty by Eastmark, the enforceability of contractual limitations in the agreement with the strata manager, and the rights and obligations of the owners corporation in relation to voting and consent.

The court examined whether the strata management statement was fair and reasonable, and if it could be considered an unjust contract under the Contracts Review Act 1980. The court found that the allocation of costs for shared services was not unfair or unreasonable and dismissed the claim for an amendment to the strata management statement. Regarding the fiduciary duty, the court held that Eastmark did not owe a fiduciary duty to the owners corporation. The court also addressed the enforceability of contractual limitations in the agreement with the strata manager, finding that these clauses were valid and enforceable. Furthermore, the court ruled on the voting rights of the owners corporation and the remaining lot owners, concluding that the owners corporation was not estopped from asserting that the remaining lot owners were not entitled to vote due to non-payment of interest on arrears of levies. Finally, the court determined that the owners corporation was not unreasonably withholding consent to the proposed relocation of shared facilities.

The final orders included dismissing the claims regarding the strata management statement, the fiduciary duty, and the voting rights, and upholding the validity of the contractual limitations. The court also determined the quantum of arrears owed by the owners corporation.

Orders