The Owners - Strata Plan 78102 v The Owners - Strata Plan 78101

The case between The Owners – Strata Plan 78102 and The Owners – Strata Plan 78101 involved two separate strata plans sharing common facilities within a building that combined both commercial and residential units. The dispute centred on the allocation of costs associated with these shared facilities. Specifically, the plaintiffs, The Owners – Strata Plan 78102, challenged the manner in which the defendants, The Owners – Strata Plan 78101, had determined the shared costs. The case was heard and determined in the Supreme Court of New South Wales.

The primary legal issues for the court to address were whether a dispute had indeed arisen concerning the proportions of shared costs and, if so, whether the appointment of an expert under the dispute resolution mechanism was valid. Additionally, the court needed to consider the conduct of the parties in relation to the Strata Management Statements (SMS) and whether any implied terms existed that would affect the determination of shared costs. Another key issue was whether the SMS should be amended and, if so, whether the circumstances warranted the court appointing an expert to provide guidance.

The court found that a genuine dispute existed regarding the shared costs, and the conduct of the parties had been unreasonable, particularly in relation to the preparation and amendment of the SMS. The court held that an implied term existed to ensure fair and reasonable allocation of shared costs. Furthermore, the court determined that the circumstances justified the appointment of an expert to assist in resolving the dispute. Consequently, the court made an order appointing an expert to provide a report on the fair and reasonable allocation of shared costs between the two strata plans.

Additionally, the court mandated that the SMS be amended to reflect the new provisions for the allocation of shared costs. The expert's report was to be considered in the context of these amended provisions, and the court reserved the right to make further orders as necessary based on the expert's findings.