The Owners-Strata Plan 934 v T&P Chimes Development Pty Ltd

[2025] NSWLEC 9

Land and Environment Court

New South Wales

Medium Neutral Citation:

The Owners-Strata Plan 934 v T&P Chimes Development Pty Ltd [2025] NSWLEC 9

Hearing dates:

2 July 2024

Date of orders:

25 February 2025

Decision date:

25 February 2025

Jurisdiction:

Class 3

Before:

Pritchard J

Decision:

The Court makes the following orders:

(1) The applicant, in order to satisfy the requirement in s 182(3)(b) of the Strata Schemes Development Act 2015 (NSW) (SSD Act) to seek from owners of each lot in relation to which a support notice has been given, within the meaning of s 174(1) of the SSD Act, for the strata renewal plan for the redevelopment of Strata Renewal Plan 934 dated 2 March 2023 (the strata renewal plan) written agreement to a variation to Annexure B to the strata renewal plan in relation to lot 19 to increase the purchase price for the lot to the amount accepted by lot 18, being the amount identified in the non-publication order made 2 July 2024.

(2) The applicant to seek from the owners of each lot in relation to which a support notice has been given written agreement to the variation to the strata renewal plan within 28 days of these orders.

(3) The applicant to file and serve on the respondents evidence of the written agreement to the variation of the strata renewal plan as set out in Order 1.

(4) The matter be listed for final orders to be made 7 working days after the period in Order 2 has elapsed. The parties to file and serve written submissions and any further evidence in relation to final orders.

(5) The applicant has general liberty to apply on three business days’ notice.

Catchwords:

LAND LAW — strata title — strata plan — proposed variations to strata renewal plan for redevelopment — whether proposed variation is of a minor nature that does not affect the plan in any substantial way — s 182 of the Strata Schemes Development Act 2015 (NSW) — whether proposed variation to the proposed sale price of a lot is “just and equitable in all the circumstances” — cl 36 of the Strata Schemes Development Regulation 2016 (NSW)

Legislation Cited:

Corporations Act 2001 (Cth) s 461

Land Acquisition (JustTerms Compensation) Act 1991 (NSW)

Land and Environment Court Act 1979 (NSW) s 19

Strata Schemes Development Act 2015 (NSW) ss 154, 170, 174, 177, 179, 182, 185

Strata Schemes Management Act 2015 (NSW).

Strata Schemes Development Bill 2015 (NSW)

Strata Schemes Development Regulation 2016 (NSW) cl 36

Uniform Civil Procedure Rules 2005 (NSW) r 6.29

Cases Cited:

Application by the Owners – Strata Plan No 61299 [2019] NSWLEC 111

Auburn Shopping Village Pty Ltd v Nelmeer Hoteliers Pty Ltd [2018] NSWCA 114

Hsiao v Fazarri (2020) 270 CLR 588; [2020] HCA 35

In the Matter of Catombal Investments Pty Ltd [2012] NSWSC 775

Stanford v Stanford (2012) 247 CLR 108; [2012] HCA 52

The Owners - Strata Plan No. 20548 v Mount Street 4 Pty Ltd aft Mount Street 4 Unit Trust (No 2) [2024] NSWLEC 101

The Owners - Strata Plan No. 20548 v Mount Street 4 Pty Ltd atf Mount Street 4 Unit Trust and Anor [2024] NSWLEC 3

Todd v Georgievski (1987) 10 NSWLR 319

Toll (FGCT) Pty Ltd v Alphapharm Pty Ltd (2004) 219 CLR 165

Texts Cited:

Macquarie Dictionary, online ed

Category:

Procedural rulings

Parties:

The Owners-Strata Plan 934 (Applicant)
T&P Chimes Development Pty Ltd (First Respondent)
Cubile Pty Ltd (ACN 110062630) (Second Respondent)
Diana Dolores Mullins (Third Respondent)
John Rogers (Fourth Respondent)
Graeme Noel Curry (Fifth Respondent)
Lydia Katey Dimarco (Sixth Respondent)
Alfio Gerard Dimarco (Seventh Respondent)
Lawrence Michael Lutteral (Eighth Respondent)
Robert Villamaria (Ninth Respondent)
Christina Villamaria (Tenth Respondent)
Philip Sean Jirman (Eleventh Respondent)
Anthony David Godfrey Corp (Twelfth Respondent)
Judith Margaret Corp (Thirteenth Respondent)
FBIR Holdings Pty Ltd ACN 137 488 601 (Fourteenth Respondent)
Maryanne Dajkovich (Fifteenth Respondent)
Michael James Reed (Sixteenth Respondent)
EB 9&10 Pty Ltd (ACN 140 310 729) (Seventeenth Respondent)
Barbara Lynn Schmidt (Eighteenth Respondent)
Peter William Cudlipp (Nineteenth Respondent)
Kathleen Anne Hackett (Twentieth Respondent)
R C Minter Superannuation Pty Ltd (Twenty-first Respondent)

Representation:

Counsel:
J McKelvey (First Respondent)
C Leggat SC and M Astill (Second to Twentieth Respondents)

Solicitors:
Project Lawyers (Applicant)
Dentons (First Respondent)
Bugden Allen Graham Lawyers (Second to Twentieth Respondents)
No appearance (Twenty-first Respondent)

File Number(s):

2023/313769

JUDGMENT

Introduction

1. By Class 3 application filed on 3 October 2023, The Owners–Strata Plan 934 (the applicant) with the support of T&P Chimes Development Pty Ltd (the first respondent) (the owner of a majority of lots in Strata Plan 934) seeks orders pursuant to s 182(1) of the Strata Schemes Development Act 2015 (NSW) (SSD Act) to give effect to the strata renewal plan for the redevelopment of Strata Plan 934 dated 2 March 2023 (the strata renewal plan) prepared for the property comprising lots 1 to 107 and common property in Strata Plan 934, being the whole of the property known as 45-53 Macleay Street, Potts Point, NSW 2011 (the building), and other consequential orders. Strata Plan 934 comprises 80 residential lots and 27 utility lots (car spaces).

2. On 23 February 2022, T&P Chimes Investment Pty Ltd, a related entity of the first respondent, had submitted to the owners corporation of Strata Plan 934 a strata renewal proposal for the building (the strata renewal proposal).

3. The orders sought in the Class 3 application are:

1 An order giving effect to the Strata Renewal Plan for the Redevelopment of Strata Plan 934 pursuant to section 182(1) of the SSD Act.

2 Subject to Order 1 being made by the Court, such ancillary orders pursuant to s 186 of the SSD Act as the Court considers appropriate or necessary to ensure the effectiveness of the order giving effect to a strata renewal plan.

3 Such other orders or directions pursuant to section 183 of the SSD Act the Court determines are appropriate.

4   Such further or other orders as the Court deems appropriate in the circumstances.

4. Annexure A to the strata renewal plan is a proposed contract for the sale and purchase of land, as at 2 March 2023, which “each Dissenting Owner^[1] must” sign and exchange to “sell their Lot to [the first respondent] … if the Court makes an order giving effect” to the strata renewal plan, as set out below at [110].

   1. “dissenting owner” is defined in s 4 of the SSD Act to mean “in relation to a strata renewal plan … an owner of a lot in relation to which a support notice is not in effect under this Part for the plan”.

5. Annexure B to the strata renewal plan is a table which lists the proposed sale price of each lot owned by a dissenting owner to sell their lot to the first respondent if the Court makes an order giving effect to the strata renewal plan, as at 2 March 2023, as set out below at [111].

6. Annexure C to the strata renewal plan is a valuation report for the proposed redevelopment of the building prepared by Grahame Hollinshead for the first respondent, dated 23 February 2023, as set out below at [104(2)].

7. Annexure D to the strata renewal plan is a list of the lots in the building subject to an option agreement or contract for which the first respondent was the purchaser that, as at 29 March 2023, had been exchanged but not yet settled.

8. Annexure E to the strata renewal plan is a list of particulars of any estates and interests (whether registered or unregistered), or any caveats or priority notices, affecting the lots and common property in the building, dated 2 March 2023.

9. Annexure F to the strata renewal plan is a strata renewal proposal (within the meaning of ss 4 and 156 of the SSD Act) which contains details of the terms of settlement for each “supporting owner” (within the meaning of s 170(1)(d)(vi) and (vii) of the SSD Act) as at 23 February 2022, as set out below at [112].

10. This judgment concerns preliminary issues which have arisen in relation to the variation of the strata renewal plan, prior to the Court’s determination of the applicant’s Class 3 application to give effect to the strata renewal plan, as set out below at [27]-[30]. A second judgment determining the Class 3 application to give effect to the strata renewal plan will follow the matter’s listing for final orders, following the Court’s determination of the preliminary issues, as set out below at [148].

11. I heard the proceedings in relation to preliminary issues on 2 July 2024 in the Court’s Class 3 jurisdiction pursuant to s 19(g6) of the Land and Environment Court Act 1979 (NSW), which refers to applications and proceedings under Divisions 6, 7 and 8 of Part 10 of the SSD Act.

12. At the hearing before me on 2 July 2024, I made a non-publication order in relation to the document in the further affidavit of Ms Shirley Kit-Ling Leung, solicitor for the applicant, of 1 July 2024, and Exhibits GZ-2 and GZ-3 to the affidavit of Ms Grazia Zhou, solicitor for the applicant, of 6 November 2023 on the grounds that the documents disclose information that is the subject of a confidentiality clause in agreements reached between the first respondent and the second to twentieth respondents, and that the documents disclose personal information of the owners of the Strata Plan 934 (the non-publication order). I was satisfied that the documents the subject of the non-publication order contain evidence of the terms of settlement reached between the first respondent and the second to twentieth respondents, and disclose personal information of the owners of Strata Plan 934.

13. In Application by the Owners – Strata Plan No 61299 (Strata Plan No 61299),^[2] Pain J held at [1] that the scheme there established under the SSD Act “enables a whole of strata sale where there is not unanimous support by all lot owners in a strata plan for such a sale”. In that case, Pain J observed that it was the first time the Court had been asked to consider a strata renewal scheme development under Part 10 of the SSD Act. Part 10 was introduced on 30 November 2016. By contrast to the scheme the subject of Pain J’s decision in Strata Plan No 61299, the scheme proposed in the Class 3 application to give effect to the strata renewal plan is a “redevelopment of the whole strata scheme in a way that alters the scheme to the extent that its termination and replacement by a further strata plan is necessary” (see definition in s 154 of the SSD Act), and is not a collective sale of a strata scheme^[3] which means a sale of the whole strata scheme (see definition in s 154).

    2. Application by the Owners – Strata Plan No 61299 [2019] NSWLEC 111 (Strata Plan No 61299) at [1] (Pain J).

    3. Section 4 of the SSD Act defines “strata scheme” as:

14. The second reading speech for the Strata Schemes Development Bill 2015 (NSW) provides that:

…the decision to end a strata scheme should not require 100 per cent support of owners, provided the process is flexible transparent and fair…The strata renewal process provided by part 10 of the bill is designed, through a collaborative and transparent decision-making process, to encourage owners to deal with those significant issues together. Ultimately the decision to sell or renew the scheme will be made only if a significant majority of the owners agree.

The interest of any dissenting owner or owners needs to be recognised and protected. With this is mind, the process has been designed to prevent intimidation, encourage collaboration and ensure that owners receive appropriate compensation…

15. In order to apply to the court for an order to give effect to a strata renewal plan, in accordance with s 179(1)(d) of the SSD Act, the applicant must accompany its application with a declaration given by the owners corporation identifying the steps taken in preparing the plan in accordance with Part 10 of the SSD Act, and obtaining the required level of support in accordance with Part 10. The required level of support in relation to a strata renewal plan for a strata scheme means the support (given in support notices) of the owners of at least 75% of the lots, other than utility lots, in the scheme: s 154 of the SSD Act. ^[4]

    4. “Utility lot” is defined in s 4 of the SSD Act to have the same meaning as in the Strata Schemes Management Act 2015 (NSW). Section 4 of the SSM Act defines “utility lot” as “a lot designed to be used primarily for storage or accommodation of boats, motor vehicles or goods and not for human occupation as a residence, office, shop or the like”.

16. The Class 3 application to give effect to the strata renewal plan was originally listed for an 8-day hearing between 24 June and 3 July 2024. However, the matter was heard before me on 2 July 2024 by consent of the parties in circumstances where previously dissenting owners of lots in Strata Plan 934 were preparing notices of the owners’ decision to support the strata renewal plan (support notice), within the meaning of s 174, to the returning officer for the Strata Plan 934, Erwin Rommel Alfonso (the returning officer). On 3 July 2024, all but one of the owners of lots in Strata Plan 934 (106 out of 107) had given a support notice to the returning officer for the Strata Plan 934. As at the date of the hearing before me on 2 July 2024, only lot 19 remained as a dissenting owner.

17. During the hearing, it became apparent that the strata renewal plan dated 2 March 2023 did not address the scenario where a previously dissenting owner subsequently provided a support notice and entered into a contract for sale of a lot with the owner of a majority of lots, here, the first respondent. Further, the second to twentieth respondents raised whether the terms of the contracts for sale were inconsistent with the terms in the strata renewal plan, namely those in relation to the purchase price and the time for settlement.

18. Accordingly, a preliminary issue arose in relation to whether the strata renewal plan should be varied pursuant to s 182(2) of the SSD Act which provides that “[t]he court may, on its own initiative, vary the strata renewal plan and make an order giving effect to the varied plan if satisfied of the matters referred to in subsection (1)”. Section 182(3) provides that “the court cannot vary a strata renewal plan under subsection (2) unless (a) the variation is of a minor nature that does not affect the plan in any substantial way, and (b) written agreement to the variation has been given by the owner of each lot in relation to which a support notice for the plan has been given.”

19. During the course of the hearing on 2 July 2024, the first respondent also sought to vary the strata renewal plan by amending the purchase price for lot 19 which was listed in Annexure B to the strata renewal plan, namely $900,000 to an amount of [redacted] (the subject of the non-publication order).

20. At all relevant times, the owner of lot 19 in Strata Plan 934 was a “dissenting owner” within the meaning of s 154 of the SSD Act which provides that a “dissenting owner, in relation to a strata renewal plan, means an owner of a lot in relation to which a support notice is not in effect under this Part from the plan”. Pursuant to s 174(1), an owner may, at least 60 days after receiving a copy of the strata renewal plan but before the plan lapses, give the returning officer for the plan a notice in the approved form. Here, none of the second to twenty-first respondents, who were parties to the proceedings, nor the owners of lots 87, 94 and 98 who were dissenting owners but not parties to the proceedings, gave a notice to the returning officer within the time period specified in s 174(1).

21. The Act makes a distinction between dissenting owners and those who give the returning officer for the plan a notice in the approved form. Once an owner gives a support notice, it would seem to follow that they become a “supporting owner”, notwithstanding that the expression “supporting owner” is not defined and only appears once in the Act in s 170(1)(d)(vii) which concerns the details of the terms of settlement for each supporting owner if the plan is for a redevelopment of the scheme.

22. On 2 July 2024, after the conclusion of the hearing, the parties, by consent, submitted that if the Court were minded to vary the strata renewal plan in relation to the purchase price of lot 19 pursuant to s 182(2) of the SSD Act, the Court would make the following orders:

If the Court is minded to vary the SRP in relation to Lot 19’s purchase price pursuant to s. 182(2):

1. As the Court has

a. determined to vary Annexure B of the strata renewal plan for the redevelopment of SP No 934 dated 2 March 2023 (SRP) in respect of Lot 19 to increase that lot’s purchase price under the SRP to [redacted] (the subject of the non-publication order); and

b. concluded that such a variation would be of a minor nature that does not affect the plan in any substantial way;

the Applicant, in order to satisfy the requirement of s. 182(3) of the Strata Schemes Development Act 2015 (SSD Act), is to seek the written agreement to the variation from the owner of each lot in relation to which a support notice has been given within 7 days of these orders.

2. The Applicant is to file and serve on the Respondents evidence of the written agreement to the variation to the SRP set out in Order 1 within 28 days of these orders.

3. The matter is to be listed for final orders to be made 7 days after the period in Order 2 has elapsed.

If the Court wishes to make orders giving effect to the SRP:

4. Pursuant to s. 182(1) of the Strata Schemes Development Act 2015, (SSD Act) the strata renewal plan for the redevelopment of SP No 934 dated 2 March 2023 (SRP) [as varied by the Court under s. 182(2) of the SSD Act] is given effect.

5. Pursuant to s. 183(2) of the SSD Act, the Applicant is to lodge a copy of the Court’s order for registration with Land Registry Services within 5 business days of these orders.

6. Pursuant to s. 185(2) of the SSD Act and in accordance with the orders that follow, the owner of Lot 19 in SP934, Ms Anastasia Moesses, is required to sell her lot in accordance with the terms of the contract for the sale of land contained in Annexure A to these orders for the purchase price of [redacted] (the subject of the non-publication order).

7. The owner of Lot 19 in SP934, must, within 5 business days of being notified that the Registrar General has recorded these orders on the folio of the common property and each lot in SP934, exchange a contract for the sale of land on the terms contained in Annexure A to these orders for the purchase price of [redacted] (the subject of the non-publication order).

8. In accordance with ss. 183(1) and 185(3) of the SSD Act, on the day the First Respondent becomes the registered proprietor of all lots within SP934, Strata Plan 934 is terminated.

9. In accordance with ss. 183(1) and 185(4) of the SSD Act, upon termination of the SP934, the assets of the former owners corporation vest in the former lot owners (which at that time will be the First Respondent) as tenants in common in shares proportional to the unit entitlements of their former lots, and the balance of the administrative fund must be distributed to those former lot owners in accordance with their respective proportional ownership of the assets, within 14 days of termination of SP934.

10. The Applicant has a general liberty to apply on three business days’ notice.

23. By second further amended statement of facts and contentions dated 2 July 2024, Mr Leggat SC for the second to twentieth respondents sought to vary the strata renewal plan in response to what was submitted to be an inconsistency between the terms of the strata renewal plan, and the contracts for sale as to the amount of money that would be paid. That is, the amount to be paid to each of the second to twentieth respondents in each contract was said to be greater than the amount under the strata renewal plan. However, following the hearing, Mr Leggat did not seek to have the Court make orders to otherwise vary the strata renewal plan.

23. At the hearing, the applicant was represented by Ms Parrino, solicitor. The first respondent, the developer proposing to carry out a redevelopment of Strata Plan 934 in accordance with the strata renewal plan and the owner of a majority of lots in Strata Plan 934, was represented by Ms McKelvey of counsel. At the hearing, Ms Parrino said Ms McKelvey would “make opening submissions on behalf of the applicant” and the applicant’s “submissions yesterday [1 July 2024] … support those submissions by the first respondent. We also work[ed] together in preparing those submissions.” The second to twentieth respondents, each of whom was a dissenting owner prior to, or shortly before the commencement of the hearing, were represented by Mr Leggat of senior counsel and Mr Astill of counsel. The twenty-first respondent was not represented at the hearing.

24. The owners of lots 19, 87, 94 and 98 in Strata Plan 934 were all dissenting owners, and were not parties to the proceedings. At the hearing on 2 July 2024, the first respondent tendered support notices for lots 87 and 94. On 3 July 2024, the first respondent tendered in chambers the support notice for lot 98.

25. As at 3 July 2024 and the date of judgment, the owner of lot 19 had not given a support notice and remained a dissenting owner.

Preliminary issues

27. The preliminary issues were not clearly identified in the second to twentieth respondents’ second further amended statement of facts and contentions filed in Court on 2 July 2024, in the first respondent’s statement of facts and contentions in reply dated 21 December 2023, in the parties’ written submissions or in any other material before me.

28. It appears to me that following the hearing on 2 July 2024, the preliminary issues which arise prior to the Court’s determination of the Class 3 application seeking to give effect to the strata renewal plan are:

1. whether cl 3.3(g) of the strata renewal plan “needs” to be varied to reflect the higher sale prices in the contracts of sale, and whether the Court should vary Annexure B to the plan varying the proposed sale price of lot 19 (noting that language of “need” does not appear in the SSD Act); and

2. whether the proposed variations are of a minor nature that do not affect the strata renewal plan in any substantial way, within the meaning of s 182(3)(a) of the SSD Act.

29. The remaining question in the Class 3 proceedings is whether the Court is satisfied of the matters in s 182 of the SSD Act, including that the steps taken in preparing the strata renewal plan and obtaining the required level of support were carried out in accordance with the Act. If the Court is satisfied of the matters in s 182, the Court must make an order giving effect to the strata renewal plan. This remaining question will return for determination following the Court’s decision in relation to the preliminary issues, and the parties’ evidence and submissions in relation to the matters in s 182.

Outcome

30. I have decided the preliminary issues for determination as follows.

1. Clause 3.3(g) of the strata renewal plan does not “need” to be varied because the definition of “Option Agreement” in the strata renewal plan includes a contract for sale. The proposed sale price for lot 19 in Annexure B to the strata renewal plan should be varied from $900,000 to [redacted] (the subject of the non-publication order) so that pursuant to s 182(1)(f) of the SSD Act, the terms of the settlement under the plan, as those terms apply to the dissenting owner, are just and equitable in all the circumstances. Further, pursuant to s 182(1)(g) of the SSD Act and cl 36 of the Strata Schemes Development Regulation 2016 (NSW) (SSD Regulation), I am satisfied that varying the proposed sale price for lot 19 to [redacted] (the subject of the non-publication order) is just and equitable in all the circumstances, despite the difference between the valuation of Mr Hollinshead, dated 23 February 2023, contained in the strata renewal plan and the valuation that accompanied the Class 3 application for an order to give effect to the strata renewal plan.

2. I am satisfied, pursuant to s 182(3)(a) of the SSD Act, that the proposed variation to the proposed sale price for lot 19 in Annexure B to the strata renewal plan is of a minor nature that does not affect the strata renewal plan in any substantial way.

31. Pursuant to s 182(3)(b) of the SSD Act, the Court cannot vary a strata renewal plan unless written agreement to the variation has been given by the owner of each lot in relation to which a support notice for the plan has been given to the Court’s proposed variation. Accordingly, I will make orders for the applicant to seek written agreement to the Court’s proposed variation from the owners of each lot in relation to which a support notice for the strata renewal plan has been given. The proceedings will then return to the Court for the final disposition of the Class 3 application.

Factual background

32. In relation to the factual background, the following matters were uncontroversial.

The building

33. The building is located on the corner of Macleay and McDonald Streets in the suburb of Potts Point. The western boundary of the land on which the building is located is formed by McDonald Lane.

34. The building comprises 10 floors of residential apartments constructed over ground floor and mezzanine parking. The building is located on land that is slightly elevated above the surrounding landform and as such enjoys harbour and city skyline views from the mid to upper floors.

35. The common property within the building includes 21 common area car spaces, 13 of which are attached to residential lots under exclusive use arrangements.

36. The land on which the building is located has an area of 1,284 m². The building is connected to all typical urban services, including reticulated town water, sewer, electricity and telephone.

37. The building was originally constructed in the early 1960s. The construction elements of the building include concrete floors, brick external walls, plasterboard ceiling linings, aluminium windows and doorframes, and a flat concrete roof.

38. Levels 1 to 10 have an identical layout of eight apartments on each level. Four apartments on each level face north and four face south. The northern and southern apartments on each level are separated by an internal central corridor which connects the eastern and western stairwells and provide access to the internal lift. The ground floor of the building includes an entry floor directly off Macleay Street, as well as parking spaces and a communal laundry area.

39. The building is located on land zoned B4 Mixed Use (now known as MU1 Mixed Use) under the Sydney Local Environmental Plan 2012 (NSW) (LEP). The maximum height of the building control applicable to the land is 35 metres. The maximum floor space ratio (FSR) control is limited to 3:1.

The owners

40. The first respondent’s submissions dated 1 July 2024 specify the ownership of lots in the building as at that date:

1. The first respondent was the majority owner of lots in the building. The first respondent owned lots 1, 3, 4, 5, 6, 7, 8, 9, 10, 11, 12, 13, 14, 15, 17, 20, 21, 22, 23, 24, 25, 26, 28, 29, 31, 32, 33, 34, 35, 36, 37, 38, 39, 40, 41, 42, 43, 46, 48, 49, 50, 52, 54, 55, 56, 57, 58, 59, 60, 61, 62, 63, 64, 65, 66, 67, 68, 69, 70, 71, 72, 73, 74, 75, 76, 80, 81, 83, 85, 92, 93, 95, 96, 97, 100, 102, 103, 106 and 107.

2. Lot 2 was owned by T&P Chimes Investment Pty Ltd, which owned all the shares in the first respondent.

3. Lots 77, 78, 82 and 91 were owned by Cubile Pty Ltd (ACN 110062630) (the second respondent).

4. Lot 45 was owned by Ms Diana Dolores Mullins (the third respondent).

5. Lot 47, 79 and 105 was owned by Mr John Rogers (the fourth respondent).

6. Lot 27 was owned by Mr Graeme Noel Curry (the fifth respondent).

7. Lot 53 was owned by Mrs Lydia Katey Dimarco (the sixth respondent) and Mr Alfio Gerard Dimarco (the seventh respondent).

8. Lot 84 was owned by Mr Lawrence Michael Lutteral (the eighth respondent).

9. Lot 18 was owned by Mr Robert Villamaria (the ninth respondent) and Mrs Christina Villamaria (the tenth respondent).

10. Lots 16 and 99 were owned by Mr Philip Sean Jirman (the eleventh respondent).

11. Lot 30 was owned by Mr Anthony David Godfrey Corp (the twelfth respondent) and Mrs Judith Margaret Corp (the thirteenth respondent).

12. Lot 51 was owned by FBIR Holdings Pty Ltd (the fourteenth respondent).

13. Lot 90 was owned by Ms Maryanne Dajkovich (the fifteenth respondent).

14. Lot 101 was owned by Mr Michael James Reed (the sixteenth respondent).

15. Lot 89 was owned by EB 9&10 Pty Ltd (ACN 140 310 729) (the seventeenth respondent).

16. Lot 104 was owned by Ms Barbara Lynn Schmidt (the eighteenth respondent) and, Mr Peter William Cudlipp (the nineteenth respondent).

17. Lott 44 was owned by Ms Kathleen Anne Hackett (the twentieth respondent).

18. Lots 86 and 88 were owned by RC Minter Superannuation Pty Limited (the twenty-first respondent). On 25 June 2024, the twenty-first respondent filed a notice of removal of its solicitor.

41. Ms Anastasia Moesses, the owner of lot 19, was at the date of hearing before me on 2 July 2024, a dissenting owner within the meaning of s 154 of the SSD Act, and not a party to the proceedings. At the hearing on 2 July 2024, Ms McKelvey for the first respondent and the applicant said in relation to the owner of lot 19:

MCKELVEY: … In line with the decision of Robson J most recently. I think, your Honour, we discussed the other day about the Court's power to still deal with it, not extending her lack of participation. To the extent that your Honour needs an authority for it, Robson J delivered a decision in the Owners Strata Plan No 20548 v Mount Street 4 Pty Ltd, which is 2024 NSWLEC 3. In that particular decision, the Owners Corporation sought to join dissenting owners to the proceedings to basically, force them to participate, and his Honour found that that was not what was envisaged by the act. So, it is well within the Court's purview and in line with what [Pain] J did in the decision where her Honour made an order. Which is application by the Owners Strata Plan No 61299, which is 2019 NSWLEC 111. The Court can proceed to make orders in the absence of the party, particularly when evidence is before the Court of their service and otherwise, compliance with the matters required by the pt 10.

Procedural history

42. On or about 30 August 2021, the applicant passed a resolution that Part 10 of the SSD Act applies to the building.

43. On 2 March 2023, the strata renewal plan for Strata Plan 934 was prepared by the strata renewal committee established by a resolution of the owners corporation on 30 March 2022 pursuant to s 160 of the SSD Act to prepare a strata renewal plan.

44. On 20 June 2023, of the owners of 80 non-utility lots, 62 owners (77.5%) gave support notices to the returning officer to reach the required level of support. Whilst the first respondent was, at the date of hearing on 2 July 2024, the registered proprietor of lots 28, 29, 49, 60, 63, 83, 85 and 96, no support notices were provided in relation to those lots because the sales settled after the date the required level of support was obtained.

45. On 21 June 2024, at the first pre-trial mention before me, the first respondent informed the Court that it had signed heads of agreement with the second to twenty-first respondents, and that once it entered into contracts for sale, the second to twenty-first respondents would withdraw from the proceedings.

46. On 25 June 2024, at the second pre-trial mention before me, counsel for the second to twentieth respondents provided the Court with a copy of short minutes proposing that the twenty-first respondent be removed as a party pursuant to r 6.29 of the Uniform Civil Procedure Rules 2005 (NSW). The proposed short minutes were signed by the solicitors for the applicant, first respondent and second to twentieth respondents. However, the proposed short minutes were not made or entered, and therefore it appears that the twenty-first respondent remains a party to the proceedings. ^[5]

    5. See annexure P to the affidavit of Ms Leung dated 26 June 2024.

47. Further, on 25 June 2024, the first respondent informed the Court that it believed that the second to twenty-first respondents needed to give support notices to the returning officer because “whenever a support notice is not given, someone is still a dissenting owner”. As noted previously, a “dissenting owner” is defined in s 154(1) of the SSD Act to mean “an owner of a lot to which a support notice is not in effect under this Part for the plan”. “Support notice” is defined in s 154(1) by reference to s 174(1). Section 174(1) provides that an owner may at least 60 days after receiving a copy of the strata renewal plan but before the plan lapses, give the returning officer a support notice in the approved form. Section 177(1) identifies the circumstances in which an strata renewal plan lapses. It was not submitted by any party that any of the circumstances in s 177(1) had occurred here.

48. On 27 June 2024 at the third pre-trial mention, Mr Leggat for the second to twentieth respondents, informed the Court that the SSD Act “envisages that the mortgagee’s consent in circumstances where there is a registered mortgage on title, the mortgagee provides consent”, and that there were four registered mortgagees who still needed to provide consent. By the end of 2 July 2024, support notices had been provided for the second to twenty-first respondents.

49. The second further amended statement of facts and contentions handed up in Court on 2 July 2024 confirmed that each of the second to twentieth respondents had served a support notice on the returning officer on 1 July 2024. In relation to each of the second to twentieth respondents who had a mortgage noted on their title, the mortgagee granted and served consent on the returning officer on 1 July 2024.

50. At the hearing on 2 July 2024, the first respondent tendered the support notices for lot 87 and lot 94 (the owner of which is not a party to the proceedings).

51. On 3 July 2024, after the hearing on 2 July 2024, the first respondent emailed my associate the support notice for lot 98 (the owner of which is also not a party to the proceedings).

52. There was no evidence of any support notice having been given by the owner of lot 19, Ms Moesses.

Relevant legislative provisions

53. Unless otherwise indicated, the relevant legislative provisions at all relevant times are as set out below.

Process for redevelopment

54. The process for the redevelopment of a strata scheme is as follows:

1. Step 1: A strata renewal proposal is prepared and submitted to the committee of an owners’ corporation: s 156 of the SSD Act and cl 30 of the Strata Schemes Development Regulation 2016 (NSW) (SSD Regulation).

2. Step 2: Within 30 days, the committee must consider the strata renewal proposal: s 157 of the SSD Act.

3. Step 3: If the committee is supportive of the strata renewal proposal, the committee must convene a general meeting of the owners within 30 days: s 158 of the SSD Act.

4. Step 4: If the general meeting of the owners is supportive of the strata renewal proposal, a strata renewal committee must be formed: ss 160-169 of the SSD Act and cl 31 of the SSD Regulation.

5. Step 5: The strata renewal committee oversees the preparation of a strata renewal plan. The requirements for the content of the plan are prescriptive and involve the preparation of valuations on two bases – the individual lots within the strata scheme and the whole building and its site: ss 170 and 171 of the SSD Act and cl 33 of the SSD Regulation.

6. Step 6: At least 75% of non-utility lot owners must support the plan (s 154, definition of “required level of support”).

7. Step 7: If support notices are received from at least 75% of the owners of non-utility lots, the owners’ corporation must convene a general meeting to decide whether to apply to the Land and Environment Court to have the strata renewal plan made: SSD Act s 178(1). The SSD Act prescribes who must be served with a copy of the application to the court, including all owners: SSD Act, ss 178(4), 179(2).

8. Step 8: Any dissenting owners may object to the court to the making of the strata renewal plan: SSD Act, s 180.

55. Each of these steps includes either sub-steps or prescriptive measures (or both) that must be completed before the renewal process moves to the next stage.

56. The SSD Act requires the court to consider:

1. the application to it and whether it complies with s 179 of the SSD Act;

2. whether the court can be satisfied of the matters identified in s 182 of the SSD Act; and

3. the terms of the final orders under s 183 of the SSD Act.

57. The strata renewal process for freehold strata schemes is prescribed by Part 10 of the SSD Act and Part 6 of the SSD Regulation.

58. Section 3 of the SSD Act sets out the main objects of the Act:

3 Main objects of Act

The main objects of this Act are to provide for—

(a) the subdivision of land, including buildings, into cubic spaces to create freehold strata schemes and leasehold strata schemes, and

(b) the way in which lots and common property in strata schemes may be dealt with, and

(c) the variation, termination and renewal of strata schemes.

59. Division 1 of Part 10 relates to preliminary matters. Section 154(1) provides the following relevant definitions:

collective sale of a strata scheme means a sale of the whole strata scheme.

…

dissenting owner, in relation to a strata renewal plan, means an owner of a lot in relation to which a support notice is not in effect under this Part for the plan.

…

redevelopment of a strata scheme means a redevelopment of the whole strata scheme in a way that alters the scheme to the extent that its termination and replacement by a further strata plan is necessary.

…

required level of support, in relation to a strata renewal plan for a strata scheme, means the support (given in support notices that are in effect under this Part) of the owner or owners of at least 75% of the lots, other than utility lots, in the scheme.

returning officerfor a strata renewal plan means a person who is appointed as the returning officer for the strata renewal plan in accordance with the regulations.

…

strata renewal plan means a strata renewal plan prepared in accordance with this Part for a strata scheme.

…

support notice—see section 174 (1).

60. Section 156(2) provides in relation to the submission of a strata renewal proposal:

156 Submission of strata renewal proposal

(1) Any person (whether or not the person is the owner of a lot) may give a written proposal for the collective sale or redevelopment of a strata scheme (a strata renewal proposal) to the owners corporation of the scheme.

(2) A strata renewal proposal must include the information or other matters prescribed by the regulations.

Note—

Under section 190, particular strata renewal proposals cannot be given to an owners corporation.

61. Section 157 provides in relation to the consideration by the strata committee of a strata renewal proposal:

157 Strata committee to consider proposal

(1) As soon as practicable (but no later than 30 days) after the owners corporation receives a strata renewal proposal, the strata committee of the owners corporation must consider it at a meeting of the committee.

(2) The secretary of the owners corporation, or any other member of the strata committee, may convene the meeting.

(3) The purpose of the meeting is to decide whether or not the strata committee considers the strata renewal proposal warrants further consideration by the owners corporation.

(4) The minutes of the meeting must include—

(a) a complete copy of the strata renewal proposal, and

(b) detailed reasons for the decision.

(5) The strata committee must give each owner of a lot in the strata scheme a copy of the minutes within 14 days after the meeting.

62. Section 158 provides in relation to convening a general meeting of the owners corporation to consider a strata renewal proposal:

158 Convening general meeting to consider proposal

(1) If the strata committee decides that the strata renewal proposal warrants further consideration by the owners corporation, it must, as soon as practicable (but no later than 30 days) after making the decision, convene a general meeting of the owners corporation to further consider the proposal.

(2) Also, a general meeting of the owners corporation may be convened to consider the strata renewal proposal on a qualified request, whether or not the strata committee has considered the proposal or decided it warrants further consideration.

(3) The purpose of the general meeting is to decide whether or not the owners corporation considers the strata renewal proposal warrants investigation by a strata renewal committee.

(4) Notice of the general meeting must—

(a) comply with clause 1 of Schedule 7, and

(b) be given to each owner at least 14 days before the meeting.

63. Section 160 provides in relation to the establishment of a strata renewal committee to prepare a strata renewal plan for the strata scheme:

160   Establishment of committee

(1)  If the owners corporation passes a motion that the strata renewal proposal warrants investigation by a strata renewal committee, the owners corporation must, by resolution at a meeting—

(a)  establish a strata renewal committee to prepare a strata renewal plan for the strata scheme, and

(b)  elect its members.

(2)  A person who has a financial interest in more than 25% of the lots (other than utility lots) in the strata scheme must not vote in a resolution to establish a strata renewal committee or be elected as a member of the committee unless the person has disclosed that fact to the owners corporation.

(3)  The strata renewal committee must consist of a chairperson and the number of other members, not more than 8, determined by the owners corporation.

(4)  A strata renewal committee is taken to be established on the day its members are first elected under this Division.

(5) A motion for the resolution to establish a strata renewal committee may include forms of motion for the matters the owners corporation considers appropriate, including the matters referred to in clause 2 of Schedule 7.

64. As at about 30 March 2022, (when the strata renewal committee was established and s 161(2) of the Strata Legislation Amendment Act 2023 No 45 (NSW) applied), s 161 of the SSD Act provided in relation to the election of members of the strata renewal committee:

161   Election of members

(1)  The owners corporation may elect, as members of the strata renewal committee, persons who are eligible for appointment or election to the strata committee of the owners corporation.

(2) Before election under subsection (1), a person must disclose to the owners corporation any pecuniary or other interest the person may have relating to the strata renewal proposal that could conflict with the proper performance of the strata renewal committee’s function. ^[6]

(3)  A person may be a member of both the strata committee and the strata renewal committee.

(4)  Nomination for election as a member of a strata renewal committee may be made before or at the meeting at which it is established.

6. Section 161(2) was repealed by the Strata Legislation Amendment Act 2023 No 45 (NSW) (the Amendment Act) which commenced on 11 December 2023 (the date of assent to the Act). In an aide-memoire handed up on 2 July 2024, the first respondent acknowledged that s 161(2) was in force at the time the strata renewal committee was established on 30 March 2022. In its written and oral submissions, the first respondent later sought to rely on s 182(4A) inserted by the Amendment Act, to rely on the court’s discretion be satisfied of the steps in s 182(1)(b) despite a “defect or irregularity … if it has not caused and is not likely to cause substantial injustice”. In its written submissions, the first respondent contended that: “There was no savings or transitional provision enacted with these amendments so they apply to the decision of the Court in this case.” The Amendment Act was not yet in force on 31 March 2022, therefore the now repealed s 161(2) applied to the first respondent’s conduct at that time. Section 161(2) will be considered in the second judgment, following the court’s determination of the preliminary issues and the matter’s listing for final orders, in which the court will determine the Class 3 application following the parties’ evidence and submissions in relation to s 182 of the SSD Act.

65. Section 162 provides in relation to notice to the owner of each lot in the strata scheme of the decision to establish a strata renewal committee:

162   Notice of decision to establish committee

(1)  If a strata renewal committee is established for a strata scheme, the secretary of the owners corporation must, within 14 days after it is established, give written notice of the decision to the owner of each lot in the scheme.

(2)  The notice must include the information prescribed by the regulations.

66. Section 164 provides in relation to the function and operation of the strata renewal committee:

164 Function and operation of committee

(1) The function of the strata renewal committee is to prepare a strata renewal plan, relating to the strata renewal proposal for the strata scheme, for consideration by the owners corporation and the owners in accordance with this Part.

(2) In exercising its function, the strata renewal committee—

(a) must not spend more than the amount that the committee has, by resolution of the owners corporation made from time to time, approval to spend in preparing the strata renewal plan, and

(b) may engage persons to help it prepare the strata renewal plan (for example, a person who gave the strata renewal proposal to the owners corporation), if the owners corporation has delegated to the committee the authority to do so.

…

67. As at about 29 March 2023, (when the strata renewal committee’s operation was renewed for one year), s 166 of the SSD Act provided in relation to the period of operation of the strata renewal committee:

166   Period of operation of committee

Unless the strata renewal committee is earlier dissolved, the committee may exercise its function—

(a)  for 1 year^[7] after the day it is established, or

(b)  if the owners corporation, by special resolution made before the end of the period referred to in paragraph (a), extends that period—for the extended period.

7. Schedule 1 [6] of the Strata Legislation Amendment Act 2023 No 45 (NSW) came into force on 11 December 2023. It omitted “1 year” from section 166(a) of the SSD Act and inserted instead “2 years”. Section 166(a) will be considered in the second judgment in which the court will determine the Class 3 application. See footnote 6 above.

68. As at all relevant times, s 167 has provided in relation to the dissolution of the strata renewal committee:

167   Dissolution of committee

A strata renewal committee is dissolved on the earliest of the following days—

(a)  the day the owners corporation, by resolution, dissolves the committee,

(b)  the day the strata renewal plan prepared by the committee lapses under this Part,

(c)  the day the operational period of the committee ends, unless the required level of support for the strata renewal plan prepared by the committee has been obtained before that day,

(d)  the day the owners corporation decides to apply to the court for an order to give effect to the strata renewal plan prepared by the committee.

69. As at all relevant times, s 168 has provided in relation to the meetings and voting of the strata renewal committee:

168 Meetings and voting

(1) A strata renewal committee may hold its meetings at the times and in the way it decides.

(2) The quorum for a meeting of a strata renewal committee is a majority of its members.

(3) A decision supported by a majority of votes cast at a meeting of a strata renewal committee at which a quorum is present is the decision of the committee.

70. As at all relevant times, s 169 has provided in relation to the minutes and record of decisions of the strata renewal committee:

169 Minutes and record of decisions

(1) A strata renewal committee must keep minutes of its meetings and a record of its decisions.

(2) Within 14 days after a meeting of the strata renewal committee, the chairperson of the committee must—

(a) give a copy of the minutes of the meeting to the secretary of the owners corporation and to each member of the committee, and

(b) if the owners corporation has a notice board, place a copy of the minutes of the meeting on that notice board.

(3) If asked by an owner of a lot in the strata scheme, the secretary of the owners corporation must give the owner a copy of the minutes of a meeting within 14 days after the request is made.

(4) Nothing in this section requires the chairperson to give a copy of the minutes to himself or herself.

71. Division 5 of Part 10 relates to strata renewal plans. Section 170 provides in relation to the content of a strata renewal plan (emphasis added):

170 Content of strata renewal plan

(1) A strata renewal plan for a strata scheme must include the following information—

(a)  a general overview of the strata renewal proposal to which it relates,

(b)  a full and frank statement by the proposed purchaser or developer of their intended use of the strata parcel,

…

(d) if the plan is for a redevelopment of the scheme—

(i)  the name of the proposed developer, and

(ii)  details of any planning approvals, or other authorisations under an Act or otherwise, required before the redevelopment can start, and

(iii)  an estimate of the period from the start to completion of the redevelopment, and

(iv)  details of any periods during which the owners of lots will be required to provide vacant possession because of the redevelopment, and

(v)  details of arrangements for financing the redevelopment, and

(vi) details of the terms of settlement and the amounts to be paid to each dissenting owner for the purchase of the owner’s lot, and

(vii) details of the terms of settlement for each supporting owner including the amount and timing of any payments to be made to the owner and, if the owner has a right to buy back into any future scheme, details of that right,

(e) any other information or document about the proposed collective sale or redevelopment prescribed by the regulations.

(2) Subsection (1) does not limit the matters that may be included in a strata renewal plan.

…

(4) If a strata renewal plan is for a redevelopment of a strata scheme, the plan must provide for each dissenting owner’s lot to be purchased at not less than the compensation value for the lot.

72. Section 172 provides in relation to consideration of the strata renewal plan by a general meeting of the owners corporation:

172   Consideration of plan by owners corporation

(1)  On preparing a strata renewal plan, the strata renewal committee must convene a general meeting of the owners corporation to consider the plan.

(2)  Notice of the general meeting must—

(a) comply with clause 3 of Schedule 7, and

(b)  be given to each owner at least 14 days before the meeting.

(3)  The owners corporation may, by resolution, amend the strata renewal plan or decide to return the plan to the strata renewal committee for amendment.

(4)  If, under subsection (3), the strata renewal plan is returned to the strata renewal committee for amendment, subsections (1) and (2) apply in relation to the plan on completion of the amendments.

(5)  The owners corporation may, by special resolution, decide to give the strata renewal plan, whether or not amended in accordance with this section, to the owners for their consideration.

(6) A motion under this section is not a motion for which a priority vote can be cast under clause 24 of Schedule 1 to the Strata Schemes Management Act 2015.

(7)  A strata renewal plan is not given any force or effect merely because of a decision made under subsection (5).

73. Section 173 provides in relation to the provision of a copy of the strata renewal plan to the owners for their consideration:

173 Copy of plan to be given to owners

(1) If the owners corporation decides by special resolution under section 172 (5) to give the strata renewal plan to the owners for their consideration, the secretary of the owners corporation must within 14 days give a copy of the plan to each owner.

(2) The copy of the plan must be accompanied by the information or documents prescribed by the regulations.

74. Section 174(1) provides in relation to the giving of a notice stating that the owner supports the plan:

174 Notice of owner’s decision to support plan

(1) An owner may, at least 60 days after receiving a copy of the strata renewal plan but before the plan lapses, give the returning officer for the plan a notice in the approved form (a support notice) that—

(a) states the owner supports the plan, and

(b) is signed by the owner and each registered mortgagee or covenant chargee of the owner’s lot.

(2)  If a lot is owned by more than one person, each of those persons must sign the support notice.

(3)  The signature of an owner, registered mortgagee or covenant chargee (the relevant person) must be witnessed by a person who—

(a)  is at least 18 years of age, and

(b)  is not a party to the proposed collective sale or redevelopment to which the support notice relates.

(4)  A notice referred to in subsection (1) has effect as a support notice under this Part in relation to the owner’s lot on the day it is given to the returning officer.

(5)  In giving a support notice, an owner agrees to participate in the proposed collective sale or redevelopment under the strata renewal plan to which the notice relates.

(6)  In signing a support notice, a mortgagee or covenant chargee merely consents to the owner giving the notice in relation to the owner’s lot and is not bound in any way by the strata renewal plan.

(7)  The returning officer must—

(a)  keep a record showing the number of lots for which a support notice has been given and is in effect, and

(b)  if asked by an owner, advise the owner of the number of lots for which a support notice has been given and is in effect.

75. Section 176 provides in relation to notice to the secretary of the owners corporation if the required level of support is obtained for a strata renewal plan:

176 Notice if required level of support obtained

(1) If the required level of support for a strata renewal plan is obtained before the plan lapses the returning officer for the plan must give written notice of that fact to the secretary of the owners corporation.

(2) The secretary must, within 14 days after receiving the notice give written notice that the required level of support for the strata renewal plan has been obtained to—

(a) each owner of a lot in the strata scheme, and

(b) the Registrar-General.

(3) On receiving the notice, the Registrar-General must make appropriate recordings in the folio for the common property in the strata scheme to show that the scheme is the subject of a strata renewal plan.

(4) If requested by the Registrar-General, the owners corporation must give the Registrar-General the information about the strata renewal plan the Registrar-General requires to make the recordings referred to in subsection (3).

(5) On and from the making of the recordings referred to in subsection (3), a support notice that is in effect for the strata renewal plan is taken to have been given under this Part by any subsequent owner, registered mortgagee or covenant chargee of the lot in relation to which the support notice was given.

76. Section 177(1) provides in relation to the lapsing of a strata renewal plan:

177   Lapsing of plan

(1)  A strata renewal plan lapses if—

(a)  the owners corporation decides under this Division not to give the plan to the owners for their consideration, or

(b)  within 3 months after the day the owners corporation decided to give the plan to the owners for their consideration, the required level of support for the plan has not been obtained, or

(c)  the owners corporation decides not to apply to the court under Division 6 for an order to give effect to the plan, or

(d)  if an application is made under Division 6 to the court for an order to give effect to the plan—the court decides not to make the order.

77. Division 6 of Part 10 relates to applying for an order to give effect to a strata renewal plan. Section 178 provides in relation to a decision of the owners corporation to apply to the court for an order to give effect to a strata renewal plan:

178   Decision to apply for order

(1)  If the required level of support for a strata renewal plan for a strata scheme is obtained—

(a)  the secretary of the owners corporation, or a member of the strata renewal committee, must convene a general meeting of the owners corporation for the purpose of deciding whether to apply to the court for an order to give effect to the plan, and

(b)  the owners corporation may, by resolution, decide to apply to the court for the order.

(2)  To remove doubt, an application for an order may be made by the owners corporation even if an owner of a lot in the strata scheme at the time the application is made is not an owner who gave a support notice for the strata renewal plan.

Note—

Under section 176 (5), a subsequent owner of a lot may be taken to have given a support notice under this Part.

(3) However, the owners corporation must not apply for an order unless it is satisfied that the strata renewal plan complies with section 170.

(4)  The secretary of the owners corporation must, within 14 days after a decision is made to apply for an order, give written notice of the decision to each tenant of a lot in the strata scheme whose name has been notified to the owners corporation as a tenant of the lot in accordance with the Strata Schemes Management Act 2015.

78. Section 179 provides for applications to the court for an order to give effect to the strata renewal plan:

179   Application for order

(1)   An application for an order to give effect to the strata renewal plan must be accompanied by the following:

(a)   a copy of the plan,

(b)   a copy of each support notice that is in effect under this Part for the plan,

(c)   the names of each dissenting owner and each registered mortgagee and covenant chargee of a dissenting owner’s lot,

(d)   a declaration given by the owners corporation identifying the steps taken in preparing the plan and obtaining the required level of support in accordance with this Part,

…

(f)   if the plan is for a redevelopment of a strata scheme—

(i)   a declaration given by the developer disclosing the nature of any relationship, whether personal or commercial, the developer may have with an owner of any lot in the scheme, and

(ii)   a document specifying the amount to be paid to each dissenting owner for the owner’s lot, and

(iii)   a report of an independent valuer that includes details of the market value of the whole building and its site (at its highest and best use) and details of the compensation value of each dissenting owner’s lot, and

(iv)   a document detailing enough financial information to show there is a secure source of finance for the carrying out of the proposed redevelopment under the plan,

(g)   any other information or document about the proposed collective sale or redevelopment prescribed by the regulations.

(2)   Notice of the application must be served, in accordance with rules of court, on:

(a)   each owner of a lot in the strata scheme, and

(b)   each registered mortgagee or covenant chargee of a dissenting owner’s lot, and

(c)   if the strata renewal plan is for a collective sale of a strata scheme—the proposed purchaser (if known), and

(d)   if the strata renewal plan is for a redevelopment of a strata scheme—the local council and the proposed developer (if known), and

(e)   any other person directed by the court.

79. Section 180 provides for objections to applications to the court for an order to give effect to the strata renewal plan

180   Objection to application

(1)  Any of the following persons may file an objection to the application for an order to give effect to the strata renewal plan—

(a)  a dissenting owner,

(b) a person on whom notice of the application must be served under section 179 (2) (b)–(e).

(2)  The objection must be filed in the court within 21 days after notice of the application is served on the person filing the objection.

(3)  A person who files an objection need not be a party in proceedings before the court relating to the strata renewal plan.

80. Division 7 of Part 10 relates to orders to give effect to strata renewal plans. Section 181 provides, relevantly, in relation to the hearing of an application for an order in relation to a strata renewal plan:

181   Hearing of application

(1)  The court must hear and dispose of an application for an order in proceedings before the court.

(2)  If the court orders mediation or arranges a conciliation conference in relation to the application—

(a)  the court may terminate the mediation or conference at any time and hear, or continue to hear, the proceedings, or

(b)  any party to the mediation or conference may, at least 90 days after the day the first mediation or conference session starts, ask the court to terminate the mediation or conference and hear, or continue to hear, the proceedings, or

(c)  if the parties reach an agreement at mediation or the conciliation conference and the strata renewal plan is varied under the agreement—the court may hear, or continue to hear, the proceedings in relation to the varied plan.

(3)  The court must hear, or continue to hear, the proceedings whether or not the parties reach an agreement at mediation or a conciliation conference.

(3A) Subsection (3) has effect despite section 34(3)(a) of the Land and Environment Court Act 1979.

(4)  If a strata renewal plan is varied at mediation or a conciliation conference, the varied plan is taken to be the strata renewal plan under this Act.

(5)  However, the court must not make an order in relation to a strata renewal plan that is varied at mediation or a conciliation conference unless—

(a)  written agreement to the variation has been given by the owner of each lot in relation to which a support notice has been given for the plan, and

(b)  written notice of the variation has been served by the owners corporation on the following (unless otherwise directed by the court)—

(i)  each dissenting owner,

(ii) each person on whom notice of the application must be served under section 179 (2) (b)–(e).

(6)  Any of the following persons may be joined as a party to the proceedings—

(a)  a person who has filed an objection to the application and applies to be a party to the proceedings,

(b)  a person directed by the court to be joined.

81. Division 7 of Part 10 also provides for orders to give effect to strata renewal plans. Section 182 provides in relation to the court making an order giving effect to the strata renewal plan, and the matters of which it must be satisfied (emphasis added):

182   Decision of court

(1)  The court must make an order giving effect to the strata renewal plan if satisfied of the following matters—

(a)  the relationship, if any, between the owners of lots and the purchaser or a developer has not prevented the plan being prepared in good faith,

(b)  the steps taken in preparing the plan and obtaining the required level of support were carried out in accordance with this Act,

(c) all notices required to be served under sections 179 and 181 have been served,

…

(e)  if the plan is for a redevelopment—the amount to be paid to a dissenting owner is not less than whichever of the following is greater—

(i)  the compensation value of the owner’s lot,

(ii)  an amount equal to the total consideration that would accrue to the dissenting owner under the plan in relation to the redevelopment and the owner’s lot if that owner had given a support notice for the plan,

(f)  if the plan is for a redevelopment—the terms of the settlement under the plan, as those terms apply to any dissenting owner, are just and equitable in all the circumstances,

(g)  any other matter prescribed by the regulations.

(2)  The court may, on its own initiative, vary the strata renewal plan and make an order giving effect to the varied plan if satisfied of the matters referred to in subsection (1).

(3)  However, the court cannot vary a strata renewal plan under subsection (2) unless—

(a)  the variation is of a minor nature that does not affect the plan in any substantial way, and

(b)  written agreement to the variation has been given by the owner of each lot in relation to which a support notice for the plan has been given.

(4)  The court must not make an order giving effect to the strata renewal plan if the court is not satisfied about the matters referred to in subsection (1).

(4A)  The court may be satisfied of the matters referred to in subsection (1)(b) and (c) despite a defect or irregularity if the court is satisfied that the defect or irregularity has not caused and is not likely to cause substantial injustice.

(4B)  In considering an objection to the application for the order, the court must consider whether the person who filed the objection did not file the objection in good faith, including because of a conflict of interest.

(5)  The court must give written reasons for its decision to make, or not to make, an order.

(6) This section applies subject to section 181(5).

82. Section 183 provides in relation to giving effect to a court order and directions giving effect to a strata renewal plan:

183 Court order and directions

(1) If the court makes an order giving effect to a strata renewal plan for a strata scheme, the order may include directions about any of the following matters—

(a) the termination of the scheme, including, for example, the day on which the scheme is to be terminated and the day on which vacant possession of lots and common property in the scheme is to be given,

(b) the winding up of the owners corporation of the scheme,

(c) the discharge of the liabilities of the owners corporation,

(d) the persons liable to contribute amounts required for the discharge of the liabilities of the owners corporation and the proportionate liability of the persons,

(e) the distribution of the assets of the owners corporation and the proportionate entitlement of each person under the distribution,

(f) any other matter prescribed by the regulations.

(2) The owners corporation must lodge the order for registration within 7 days after it is made.

(3) The Registrar-General must record the order on the folio for the common property and for each lot in the strata scheme.

(4) The order has effect under this Part when the Registrar-General makes the record under subsection (3).

83. Section 185 provides in relation to the effect of an order of the court giving effect to a strata renewal plan for a redevelopment of a strata scheme:

185 Effect of order relating to redevelopment

(1) This section applies if the court makes an order giving effect to a strata renewal plan for a redevelopment of a strata scheme.

(2) Each dissenting owner of a lot in the strata scheme must sell the owner’s lot in accordance with the strata renewal plan and the order.

(3) The strata scheme is terminated on the day stated in the order for that purpose.

(4) On termination of the strata scheme—

(a) the owners corporation is dissolved, and

(b) the rights and liabilities of the owners corporation vest in the developer or the former owners in accordance with the strata renewal plan and the order, and

(c) land in the former parcel vests in the former owners as tenants in common in shares proportional to the unit entitlement of their former lots, unless the strata renewal plan otherwise provides, and

(d) any legal proceedings begun by or against the owners corporation may be completed by or against the developer, and

(e) the developer must give the Registrar-General notice of the termination in the approved form.

(5) On receiving the notice, the Registrar-General must—

(a) cancel the folios for the lots and common property in the strata scheme, and

(b) create a folio for the land in the former parcel, and

(c) record in the Register the matters the Registrar-General considers appropriate to give effect to the order.

(6) The order does not permit development to be carried out in contravention of this Act or any other Act or law.

(7) A lease of a lot in the strata scheme is terminated on the day stated in the strata renewal plan for giving vacant possession of the lot to the developer or on such later day as may be specified in the order.

(8) Subject to this Part, the termination of a lease under this section does not affect a right or remedy a person may have under the lease.

Note—

It is expected that leases would generally be terminated in accordance with the terms of the lease (or under legislation such as Division 2 of Part 5 of the Residential Tenancies Act 2010) and not under this section.

(9) In this section—

former owner does not include a dissenting owner.

84. Division 8 of Part 10 contains miscellaneous provisions. Section 188 (as at the date of the hearing) provided in relation to the costs of proceedings for an application for an order to give effect to a strata renewal plan incurred by a dissenting owner:

188 Costs of proceedings

(1) Unless the court otherwise orders-

(a) the owners corporation must pay the reasonable costs of proceedings for an application for an order to give effect to a strata renewal plan incurred by a dissenting owner, and

(b) the owners corporation must not levy a contribution for a part of the costs of the proceedings on a dissenting owner.

(2) If the court is satisfied a dissenting owner has a conflict of interest that makes it inappropriate, in the court's opinion, for the owners corporation to pay the owner's costs, the court must make an order requiring the owner to pay-

(a) the owner's costs, and

(b) any contribution for a part of the costs of the proceedings levied on the owner.

(3) The court may make a costs order against a dissenting owner if the court considers it appropriate to do so, including if the court considers the owner has not acted in good faith in failing to give, or withdrawing, a support notice.

(4) The court may order that costs be assessed on the ordinary basis or an indemnity basis.

(5) The regulations may prescribe other matters relating to the costs of proceedings for an application for an order to give effect to a strata renewal plan.

85. Schedule 7 to the SSD Act specifies requirements for notices of meetings relating to a strata renewal process:

1 Notice of general meeting to consider strata renewal proposal

A notice of a general meeting of an owners corporation to consider whether a strata renewal proposal warrants investigation by a strata renewal committee must—

(a) clearly indicate that the purpose of the meeting is to consider a strata renewal proposal, and

(b) identify the proposed purchaser, if known, or proposed developer under the strata renewal proposal, and

(c) disclose the nature of any interest a proposed purchaser or proposed developer may have in the strata scheme, and

(d) include a brief summary of the strata renewal proposal, and

(e) include a form of motion that the owners corporation decide whether the strata renewal proposal warrants investigation by a strata renewal committee, and

(f) be accompanied by a complete copy of the strata renewal proposal.

2   Forms of motion for general meeting to establish strata renewal committee

For the purposes of section 160 (5), the matters are—

(a)  determining the number of members of the strata renewal committee, and electing its members, and

(b)  a budget for, or limitations on amounts to be spent on, preparing a strata renewal plan, and

(c)  considering whether to delegate to the committee the authority to engage persons to help it prepare a strata renewal plan.

3 Notice of general meeting to consider strata renewal plan

A notice of a general meeting of an owners corporation to consider a strata renewal plan must—

(a) clearly indicate that the purpose of the meeting is to consider a strata renewal plan, and

(b) identify the proposed purchaser, if known, or developer under the strata renewal plan, and

(c) disclose the nature of any interest a proposed purchaser or developer may have in the strata scheme, and

(d) include a brief summary of the strata renewal proposal, and

(e) include a form of motion that the owners corporation decide whether the strata renewal plan should be given to the owners for their consideration, and

(f) be accompanied by a copy of the strata renewal plan.

86. Section 5 of the Strata Schemes Management Act 2015 (NSW) (SSM Act) provides in relation to resolutions of an owners corporation:

5 Resolutions of owners corporations

(1) In this Act, a resolution of an owners corporation is a special resolution if—

(a) it is passed at a properly convened general meeting, and

(b) of the value of votes cast—

(i) not more than 25% are against the resolution, or

(ii) if the resolution is a sustainability infrastructure resolution—less than 50% are against the resolution.

(2) In determining a special resolution, the value of a vote for a lot is equal to the unit entitlement of the lot, subject to subsection (2A).

(2A) The value of a vote cast by an original owner of a strata scheme must be reduced by two-thirds if—

(a) the total unit entitlement of lots for which the original owner is entitled to a vote is at least half of the aggregate unit entitlement of the lots in the scheme, and

(b) the scheme comprises more than 2 lots.

87. Section 31 of the SSM Act provides in relation to the eligibility of persons to be appointed or elected to the strata committee of an owners corporation:

31   Persons who are eligible to be appointed or elected to strata committee

(1)  The following persons are eligible for appointment or election to the strata committee of an owners corporation—

(a)  an individual who is a sole owner of a lot in the strata scheme,

(b)  a company nominee of a corporation that is a sole owner of a lot in the strata scheme,

(c)  an individual who is a co-owner of a lot or a company nominee of a corporation that is a co-owner of a lot in the strata scheme, if the person is nominated for election by an owner who is not a co-owner of the lot or by a co-owner of the lot who is not a candidate for election as a member,

(d)  an individual who is not an owner of a lot in the strata scheme, if the person is nominated for election by an owner of a lot who is not a member, or is not seeking election as a member, of the strata committee.

(2)  To avoid doubt, an individual who is a sole owner of a lot may nominate himself or herself, and an owner that is a corporation may nominate the corporation’s company nominee, for election as a member of the strata committee.

(3)  A sole owner of a lot in a strata scheme may not nominate more than one person for election as a member of the strata committee, except as provided by subsection (5).

(4)  Only one co-owner (including a company nominee of a co-owner) of the same lot may be a member of a strata committee at the same time, except as provided by subsection (5).

(5)  A person who is an owner of more than one lot in the strata scheme may nominate one person for election as a member of the strata committee for each lot for which the person is an owner.

88. Clause 17 of sch 1 to the SSM Act concerns the quorum required for a motion submitted to be considered, or an election to be held at a strata committee meeting:

17   Quorum

(1) Quorum required for motion or election A motion submitted at a meeting must not be considered, and an election must not be held at a meeting, unless there is a quorum present to consider and vote on the motion or on the election.

(2) When quorum exists A quorum is present at a meeting only in the following circumstances—

(a)  if not less than one-quarter of the persons entitled to vote on the motion or election are present either personally or by duly appointed proxy,

(b)  if not less than one-quarter of the aggregate unit entitlement of the strata scheme is represented by the persons who are present either personally or by duly appointed proxy and who are entitled to vote on the motion or election,

(c)  if there are 2 persons who are present either personally or by duly appointed proxy and who are entitled to vote on the motion or election, in a case where there is more than one owner in the strata scheme and the quorum otherwise calculated under this subclause would be less than 2 persons.

89. Part 6 of the SSD Regulation relates to strata renewal. Clause 27 of the SSD Regulation provides in relation to the definition of compensation under s 55 of the Land Acquisition (Just Terms Compensation) Act (1991) (Just Terms Act):

27   Compensation value

For the purposes of paragraph (a) of the definition of compensation value in section 154 of the Act, the determination of compensation under section 55 of the Land Acquisition (Just Terms Compensation) Act 1991 is modified as follows—

(a)  sections 56 (1) (b) and (2) and 62–65 of that Act are taken not to apply in respect of that section,

(b)  any references in that Act to “acquisition”, “compulsory acquisition” or “the public purpose for which the land was acquired” are taken, for the purposes of that section, to be references to the strata renewal proposal,

(c)  the buyer and seller referred to in section 56 of that Act are to be assumed to take into account the highest and best use of the land,

(d)  the matters set out in section 55 of that Act are to be valued at the following times—

(i) for the purposes of inclusion in a strata renewal plan—on a day that is not more than 45 days before the day on which the general meeting of the owners corporation is held under section 172 of the Strata Schemes Development Act 2015 to consider the plan,

(ii) for the purposes of an application made under section 179 of the Strata Schemes Development Act 2015 for an order to give effect to a strata renewal plan—on a day that is not more than 45 days before the day on which the application is made.

90. Clause 28 of the SSD Regulation provides in relation to the determination of market value for the purposes of s 154 of the Just Terms Act:

28 Market value

(1) For the purposes of the definition of market value in section 154 of the Act, the market value of a building and its site—

(a) is to be determined by estimating the amount for which the building and site would be sold by a willing but not anxious seller to a willing but not anxious buyer, and

(b) is to be determined at the following times—

(i) for the purposes of inclusion in a strata renewal plan—on a day that is not more than 45 days before the day on which the general meeting of the owners corporation is held under section 172 of the Act to consider the plan,

(ii) for the purposes of an application made under section 179 of the Act for an order to give effect to a strata renewal plan—on a day that is not more than 45 days before the day on which the application is made.

(2) For the avoidance of doubt, the buyer and seller referred to in subclause (1) (a) are to be assumed to take into account the highest and best use of the building and its site.

91. Clause 30 of the SSD Regulation provides in relation to what is required to be included in a strata renewal proposal for the purposes of s 156(2) of the SSD Act:

30   Strata renewal proposal

(1) For the purposes of section 156 (2) of the Act, a strata renewal proposal must include the following—

(a)  the warning notice set out in subclause (2),

(b)  the name and address of the person giving the proposal (the proponent),

(c)  details of the financial interests (if any) that the proponent has in any of the lots in the strata scheme,

(d)  a general description of the proposal and the purpose of the proposal,

(e)  how the proposal will be funded,

(f)  an estimate of the total cost (including application fees and legal fees) of obtaining an order from the court to give effect to the strata renewal plan,

(g)  whether the proponent will provide any monetary contributions (whether initial or continuing) towards the reasonable costs and expenses incurred by the strata renewal committee or owners corporation in relation to the following—

116. The first respondent also relied on the affidavit of Ms Leung dated 25 June 2024 in which Ms Leung deposed that on 18 and 19 June 2024, the respondents participated in settlement negotiations, and the first respondent reached “in principle agreements” with the second to twenty-first respondents, each of whom is a dissenting owner.

117. During the hearing, the second to twentieth respondents and the first respondent proposed the following two variations to the strata renewal plan:

1. the second to twentieth respondents proposed a variation to cl 3.3(g) of the strata renewal plan in relation to the terms of settlement in the plan said by Mr Leggat for the second to twentieth respondents to be “considerably less” than that set out in the contracts for sale signed by the second to twenty-first respondents; and

2. Ms McKelvey for the first respondent and the applicant, on behalf the first respondent and the applicant, proposed a variation to Annexure B to the strata renewal plan, varying the proposed sale price of lot 19 to reflect the sale price of comparable lots in the building.

120. The second to twentieth respondents referred to a concern about whether they could achieve the terms (including the higher price) set out in their respective contracts for sale, or whether they would be bound to the terms (including the lesser price) set out in the schedules to the strata renewal plan. This was submitted to highlight an inconsistency between the contractual promise made by the first respondent and its related entities as to the amount of money that would be required to be paid under the contract. After suggesting the insertion of a new sub paragraph to 3.3(g) in its written submissions, at the hearing the second to twentieth respondents instead suggested the deletion of cl 3.3(g)(vii) and 3.3(g)(ix)(A) (extracted above at [106]) to overcome what was submitted to be the inconsistency.

121. During the hearing, Ms McKelvey for the first respondent and the applicant submitted that it was open to the Court to find that the broad definition of option agreement in cl 2.1 of the strata renewal plan “could be read to include a contract for sale, even though it uses the language of an option agreement” because the “effect of the contract for sale is to require the owner to sell the owner’s lot” which is “what happens once a contract is exchanged”. Ms McKelvey submitted that this interpretation is “to be blunt, a stretching of the language, but … there is clearly an intent in this provision to deal with agreements that have otherwise been reached, and that the effect of those agreements be completed without the intervention of the court”.

122. Mr Leggat for the second to twentieth respondents agreed that it was open for the Court to find that the definition of option agreement in the strata renewal plan is capable of being construed to encompass a contract for sale, which would mean that no variation to cl 3.3(g) would be required.

123. The definition of “Option Agreement” in cl 2.1 of the strata renewal plan provides that “Option Agreement means the document for a Lot entitled 'Option Deed' or to a similar effect between an Owner (as grantor) and TPTC (or a Related Entity of TPTC) (as grantee), under which the grantee has the right to require the Owner to sell that Owner's Lot”.

124. In Australian Broadcasting Commission v Australasian Performing Right Association Ltd, ^[9] Gibbs J at 109 said in relation to construing a written contract:

It is trite law that the primary duty of a court in construing a written contract is to endeavour to discover the intention of the parties from the words of the instrument in which the contract is embodied. Of course the whole of the instrument has to be considered, since the meaning of any one part of it may be revealed by other parts, and the words of every clause must if possible be construed so as to render them all harmonious one with another. If the words used are unambiguous the court must give effect to them, notwithstanding that the result may appear capricious or unreasonable, and notwithstanding that it may be guessed or suspected that the parties intended something different. The court has no power to remake or amend a contract for the purpose of avoiding a result which is considered to be inconvenient or unjust. On the other hand, if the language is open to two constructions, that will be preferred which will avoid consequences which appear to be capricious, unreasonable, inconvenient or unjust, ‘even though the construction adopted is not the most obvious, or the most grammatically accurate’ … Further, it will be permissible to depart from the ordinary meaning of the words of one provision so far as is necessary to avoid an inconsistency between that provision and the rest of the instrument. Finally, the statement … that the court should construe commercial contracts ‘fairly and broadly, without being too astute or subtle in finding defects’, should not, in my opinion, be understood as limited to documents drawn by businessmen for themselves and without legal assistance …

9. (1973) 129 CLR 99 at 109 (Gibbs J in dissent). “However this passage has been followed many times”: Sir Kim Lewison and David Hughs, The Interpretation of Contracts in Australia (Thomson Reuters, 2nd ed, 2024) at 6.

125. In Toll (FGCT) Pty Ltd v Alphapharm Pty Ltd,^[10] Gleeson CJ, Gummow, Hayne, Callinan and Heydon JJ at [40] said in relation to the meaning of a contractual document:

The meaning of the terms of a contractual document is to be determined by what a reasonable person would have understood them to mean. That, normally, requires consideration not only of the text, but also of the surrounding circumstances known to the parties, and the purpose and object of the transaction.

10. (2004) 219 CLR 165 at [40] (Gleeson CJ, Gummow, Hayne, Callinan and Heydon JJ).

126. In Todd v Georgievski,^[11] McLelland J said at 323, in relation to the nature of an option to purchase agreement, that there is “standing controversy as to the true nature of an option”:

In Laybutt v Amoco Australia Pty Ltd (1974) 132 CLR 57 at 76 [Gibbs CJ] said:

“For these reasons I consider that an option to purchase (at least one in a form similar to that in the present case) is a contract to sell the land upon condition that the grantee gives the notice and does the other things stipulated in the option. An option to purchase, regarded in that way, is not an agreement which gives one of the parties the right to perform it or not as he chooses; it gives the grantee the right, if he performs the stipulated conditions, to become the purchaser.”

The opposing view, rejected by his Honour in that case, is that an option is properly characterised as an offer together with a contract that the offer will not be revoked during the time, if any, specified in the option.

11. (1987) 10 NSWLR 319 at 323 (McLelland J).

127. In Auburn Shopping Village Pty Ltd v Nelmeer Hoteliers Pty Ltd ^[12] , Bathurst CJ at [49]-[50] described the alternative characterisations of an option to purchase land agreements as either an “irrevocable offer” or a “conditional contract”:

In cases where options have been treated as or considered to be in the nature of “irrevocable offers”, this was made clear in a well-known passage in the judgment of Street J in Mackay v Wilson (1947) 47 SR (NSW) 315 at 325, where his Honour made the following remarks:

“Speaking generally, the giving of an option to purchase land prima facie implies that the giver of the option is to be taken as making a continuing offer to sell the land, which may at any moment be converted into a contract by the optionee notifying his acceptance of that offer. The agreement to give the option imposes a positive obligation on the prospective vendor to keep the offer open during the agreed period so that it remains available for acceptance by the optionee at any moment within that period. It has more than a mere contractual operation and confers upon the optionee an equitable interest in the land, the subject of the agreement … ”

By contrast, in Laybutt v Amoco Australia Pty Ltd (1974) 132 CLR 57 at 76; [1974] HCA 49, after an extensive review of the authorities dealing with the question of whether an option was in effect an “irrevocable offer” or a “conditional contract”, Gibbs J came to the view that the option in that case, which was in similar terms to the one contained in the Lease, was in substance a conditional contract.

12. [2018] NSWCA 114 at [49]-[50] (Bathurst CJ).

128. A narrow construction of the meaning of “Option Agreement” might limit cl 2.1 of the strata renewal plan to option agreements which give rise to a right to enter a purchase agreement, rather than a purchase agreement itself. However, I find that the definition of “Option Agreement” in cl 2.1 of the strata renewal plan extends to a contract for the sale and purchase of land. This is because the effect of a contract for the sale and purchase of land is to require the owner to sell the owner’s lot which occurs once a contract for sale is exchanged. This construction is supported by the “broad” definition of “Option Agreement”, being “the document for a Lot entitled 'Option Deed' or to a similar effect … under which the [related entity of the first respondent] has the right to require the Owner to sell that Owner's Lot” (emphasis added). I am satisfied that a reasonable person would understand the meaning of “Option Agreement” in the strata renewal plan to include a contract for the sale and purchase of land which is “to a similar effect” to an option to purchase agreement.

129. Whether the nature of the “Option Agreement” in cl 2.1 of the strata renewal plan is a “conditional contract” or an “irrevocable offer”, Todd v Georgievski and Auburn Shopping Village Pty Ltd v Nelmeer Hoteliers Pty Ltd confirm that option agreements to purchase land give the receiver the right to form a contract for the sale and purchase of land. It may be, as Ms MsKelvey submitted, “a stretching of the language” of cl 2.1, but the definition in cl 2.1 of option agreement manifests a clear intention to deal with agreements reached between an owner and the first respondent (or a related entity) (as grantee) under which the grantee has the right to require the owner to sell that owner’s lot. That is the effect of a contract for the sale and purchase of land. As Gibbs J held in Australian Broadcasting Commission v Australasian Performing Right Association Ltd where “language is open to two constructions, that will be preferred which will avoid consequences which appear to be capricious, unreasonable, inconvenient or unjust, ‘even though the construction adopted is not the most obvious, or the most grammatically accurate’”.

130. Accordingly, I do not consider that any variation to cl 3.3(g) of the strata renewal plan is, in the words of Mr Leggat for the second to twentieth respondents, “needed” to clarify the inconsistency between the terms in the contracts for sale of the second to twentieth respondents and the less advantageous terms set out in the Annexures to the strata renewal plan.

131. In relation to the variation suggested by the first respondent and the applicant to the proposed sale price of lot 19 in Annexure B to the strata renewal plan which was in an amount of $900,000, if it “is not just and equitable in all the circumstances required under s 182”, I find as follows.

132. Section 182(1)(f) of the SSD Act provides that the court must make an order giving effect to the strata renewal plan, if the plan is (as here) for a redevelopment, if satisfied of the terms of the settlement under the plan, as those terms apply to any dissenting owner, are just and equitable in all the circumstances. Section 182(1)(g) provides that the court must make an order giving effect to the strata renewal plan if satisfied of “any other matter prescribed by the regulations”. Clause 36 of the SSD Regulation (set out above at ([96]) provides that for the purposes of s 182(1)(g) of the SSD Act, a court must be satisfied that the effects of the strata renewal plan “are just and equitable in all the circumstances despite any differences between a valuation contained in the plan and any valuation that accompanied the application for an order to give effect to the plan”.

133. The first respondent submitted that lot 18, which is adjacent to lot 19 and on the same floor (the third floor), has the same floor space of 360 square feet and is also north-facing. In her further affidavit dated 1 July 2024. Ms Leung deposed that the owners of lot 18 accepted an offer of [redacted] (subject of the non-publication order) with a [redacted] (subject of the non-publication order) settlement period in their contract for sale. A copy of the floor plan for the third floor of the building is reproduced below:

134. The first respondent submitted that it would accept a variation to the purchase price of lot 19 from $900,000 to [redacted] (subject of the non-publication order) with a two-month settlement period.

135. The valuer engaged by the applicant, Mr Hollinshead, determined the compensation value for lot 19 in the amount of $711,000. This was calculated as follows: market value: $585,000; and disturbance: $126,000 (including stamp duty, removalist costs of $5,000, conveyance costs on a replacement purchase of $2,000, mail redirection and other ancillary costs of $1,000, plus $91,560 for disadvantage resulting from relocation). Mr Hollinshead maintained this assessment of the compensation value for lot 19 in his statement of evidence and in the joint valuation report.

136. The valuer engaged by the first respondent, Mr Dale, arrived at a slightly higher compensation value for lot 19 than Mr Hollinshead, being an amount of $794,950. This was calculated as follows: market value: $574,000; and disturbance: $122,560 (including stamp duty, removalist costs, conveyance costs on a replacement purchase, mail redirection and other ancillary costs of $1,000, plus $91,560 for disadvantage resulting from relocation).

137. I accept, as submitted by the first respondent, that the amount offered to be paid to the owner of lot 19 under the strata renewal plan was $900,000 which exceeded the compensation values derived by both Mr Hollinshead and Mr Dale (noting, but not deciding, the first respondent’s characterisation of Mr Dale’s approach as “overly generous”).

138. As set out above at [110], the key terms of the contract to be entered into by lot 19 were: completion 2 months from the contract date; vacant possession required on completion; “the vendor waives requisitions under the contract, however, also makes no warranties regarding the condition of the property and the purchaser to accept the property in whatever condition”; and the owner’s consent for any applications for the redevelopment of the land to be given. Otherwise, the standard Law Society of New South Wales contract for the sale and purchase of land terms applied.

139. The phrase “just and equitable” in cl 36 of the SSD Regulation is also used in s 461(1)(k) of the Corporations Act 2001 (Cth) which gives the Court power to order that a company be wound up if it is just and equitable to do so. In the Matter of Catombal Investments Pty Ltd ^[13] at [19]-[20] Brereton J said of the concept of “just and equitable”:

…Although the concept "just and equitable" is a broad one incapable of exhaustive definition, conventionally the decided cases are recognised as falling into a number of classes, including in particular: (1) failure of the substratum of the company; (2) deadlock or disagreement in the management of the company's affairs; (3) fraud in the formation of the company; (4) misconduct by the directors of the company; (5) constitutional and administrative vacuum in the management of the company; and, (6) lack of confidence, fairness and public interest and commercial morality.

20. However, the Court is not restricted in exercising its discretion to particular factual categories [Re Straw Products Pty Ltd [1942] VLR 222, 223]. And, the question whether it is just and equitable is a question of fact, in respect of which each case must depend on its own circumstances [Re Bleriot Manufacturing Aircraft Company Ltd (1916) 32 TLR 253, 255]. The words "just and equitable" are general words, which must remain general, and the applicant is entitled to rely on any circumstances of justice and equity that affect him or her in his or her relations with the company or shareholdings [Ebrahimi v Westbourne Galleries Ltd [1973] AC 360 ("Ebrahimi"), 374], at least so long as those circumstances have a direct and immediate relationship to, or bearing upon, the management or administration of the affairs of the subject company, or the conduct of its business [Re Nestor Pty Ltd (1981) 6 ACLR 114, 119 (Powell J).

13. [2012] NSWSC 775 at [19]-[20] (Brereton J).

140. The expression “just and equitable” is also used in the context of property settlement orders in family law. In Stanford v Stanford,^[14] French CJ, Hayne, Kiefel and Bell JJ said at [36]-[38], of the expression (footnotes omitted):

36. The expression "just and equitable" is a qualitative description of a conclusion reached after examination of a range of potentially competing considerations. It does not admit of exhaustive definition. It is not possible to chart its metes and bounds. And while the power given by s 79 [of the Family Law Act 1975 (Cth)] is not "to be exercised in accordance with fixed rules", nevertheless, three fundamental propositions must not be obscured.

37. First, it is necessary to begin consideration of whether it is just and equitable to make a property settlement order by identifying, according to ordinary common law and equitable principles, the existing legal and equitable interests of the parties in the property. …

38. Second, although s 79 confers a broad power on a court exercising jurisdiction under the Act to make a property settlement order, it is not a power that is to be exercised according to an unguided judicial discretion. …

14. (2012) 247 CLR 108; [2012] HCA 52 at [36]-[40] (French CJ, Hayne, Kiefel and Bell JJ). See also Stanford v Stanford cited in Hsiao v Fazarri (2020) 270 CLR 588; [2020] HCA 35 at n 54 (Kiefel CJ, Bell and Keane JJ) and [66] (Nettle and Gordon JJ).

141. I am satisfied, for the purpose of s 182(1)(f) of the SSD Act, that in the circumstances of the subject plan for a redevelopment, the terms of the settlement under the plan, as they apply to any dissenting owner, are just and equitable in all the circumstances. I am so satisfied, not exercising the power in 182(1) according to an unguided judicial discretion, but having regard to all the circumstances the subject of the evidence before me. Being satisfied of the matters in s 182(1), in the exercise of the Court’s discretion, I would vary the strata renewal plan and make an order giving effect to the varied plan. It follows that I would vary the proposed sale price of lot 19 set out in Annexure B to the strata renewal plan from $900,000 to [redacted] (the subject of the non-publication order) with a two-month settlement period. This is because the owners of lot 18, which has similar characteristics in terms of size, orientation and level to lot 19, accepted an offer of [redacted] (the subject of the non-publication order).

142. This is subject to my consideration below of whether such a variation is of a minor nature that does not affect the strata renewal plan in any substantial way. That is because s 182(3)(a) provides that the court cannot vary a strata renewal plan under s 182(3) unless “the variation is of a minor nature that does not affect the plan in any substantial way”.

Second issue: Whether the proposed variation is of a minor nature that does not affect the strata renewal plan in any substantial way within the meaning of s 182(3)(a) of the SSD Act

143. In relation to the question of whether a variation to the proposed sale price of lot 19 in Annexure B to the strata renewal plan is of a minor nature, the Court was not assisted by the parties in relation to the meaning of “a minor nature”.

143. The Court has not identified any previous case in which the Court has considered s 182(3)(a) of the SSD Act. The Explanatory Note provides no assistance in relation to the construction of s 182(3)(a). The Macquarie Dictionary Online ^[15] defines “minor” as “lesser, as in size, extent, or importance, or being the lesser of two”. The Macquarie Dictionary Online defines substantial as “of ample or considerable amount, quantity, size, etc”, “being such with respect to essentials” and “of real worth or value”.

     15. Macquarie Dictionary, online ed.

144. The amount of [redacted] (the subject of the non-publication order) was accepted by the owners of lot 18 which, as I have said, has very similar characteristics to lot 19, albeit there was an [redacted] (the subject of the non-publication order) settlement period. The valuations prepared by Mr Hollinshead ($711,000) and Mr Dale ($794,050.60) were considerably lower than the amount of [redacted] (the subject of the non-publication order) paid to the owners of lot 18. It is true that the first respondent has proposed a two-month settlement period which is significantly shorter than the [redacted] (the subject of the non-publication order) settlement period given to the owners of lot 18.

145. As the proposed variation is only to the proposed sale price of one lot, lot 19, and is one of 107 lots in the building, I find that the proposed variation of the proposed sale price of lot 19 from $900,000 to [redacted] (the subject of the non-publication order) is of a minor nature that does not affect the strata renewal plan in any substantial way. I am also satisfied, pursuant to cl 36 of the SSD Regulation, that it would be just and equitable in the circumstances to vary the proposed sale price of lot 19 set out in Annexure B to the strata renewal plan from $900,000 to [redacted] (the subject of the non-publication order) with a two-month settlement period.

Conclusion on preliminary issues and orders

147. On 2 July 2024, after the hearing the parties by consent submitted if the Court were minded to vary the strata renewal plan in relation to the purchase price of lot 19 pursuant to s 182(2) of the SSD Act, the Court would make the following orders:

1. As the Court has

a. determined to vary Annexure B of the strata renewal plan for the redevelopment of SP No 934 dated 2 March 2023 (SRP) in respect of Lot 19 to increase that lot’s purchase price under the SRP to [redacted] (the subject of the non-publication order); and

b. concluded that such a variation would be of a minor nature that does not affect the plan in any substantial way;

the Applicant, in order to satisfy the requirement of s. 182(3) of the Strata Schemes Development Act 2015 (SSD Act), is to seek the written agreement to the variation from the owner of each lot in relation to which a support notice has been given within 7 days of these orders.

2. The Applicant is to file and serve on the Respondents evidence of the written agreement to the variation to the SRP set out in Order 1 within 28 days of these orders.

3. The matter is to be listed for final orders to be made 7 days after the period in Order 2 has elapsed.

148. Having determined to vary the sale price of lot 19, such variation being of a minor nature that does not affect the strata renewal plan in any substantial way, within the meaning of s 182(3)(a) of the SSD Act, I make the following orders:

1. The applicant, in order to satisfy the requirement in s 182(3)(b) of the Strata Schemes Development Act 2015 (NSW) (SSD Act) to seek from owners of each lot in relation to which a support notice has been given, within the meaning of s 174(1) of the SSD Act, for the strata renewal plan for the redevelopment of Strata Renewal Plan 934 dated 2 March 2023 (the strata renewal plan) written agreement to a variation to Annexure B to the strata renewal plan in relation to lot 19 to increase the purchase price for the lot to the amount accepted by lot 18, being the amount identified in the non-publication order made 2 July 2024.

2. The applicant to seek from the owners of each lot in relation to which a support notice has been given written agreement to the variation to the strata renewal plan within 28 days of these orders.

3. The applicant to file and serve on the respondents evidence of the written agreement to the variation of the strata renewal plan as set out in Order 1.

4. The matter be listed for final orders to be made 7 working days after the period in Order 2 has elapsed. The parties to file and serve written submissions and any further evidence in relation to final orders.

5. The applicant has general liberty to apply on three business days’ notice.

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Endnotes

(a) the way a parcel is subdivided under this Act into lots or lots and common property, and

(b) the way unit entitlements are allocated under this Act among the lots, and

(c) the rights and obligations, between themselves, of owners of lots, other persons having proprietary interests in or occupying the lots and the owners corporation, as conferred or imposed under this Act or the Strata Schemes Management Act 2015.

Decision last updated: 25 February 2025