The Owners - Strata Plan No 43551 Walter - [2003] NSWSC 1177

CITATION: The Owners - Strata Plan No 43551 Walter [2003] NSWSC 1177

HEARING DATE(S): 07/11/03

JUDGMENT DATE:
12 December 2003

JURISDICTION:
Equity Division
Construction List

JUDGMENT OF: Master Macready at 1

DECISION: The lot holders are necessary parties.

CATCHWORDS: Practice & Procedure- proper parties. Whether a lot holder in a strata plan is a necessary party to a claim in negligence against the builder of the building comprising the Strata Plan. Consideration of section 227 of the Strata Scheme Management Act 1996 and the powers of an Owners Corporation.

CASES CITED: Bryan v Maloney (1995) 182 CLR 609
Woollahra Municipal Council v Sved (1996) 40 NSWLR 101 at 139
Goulding v Kirby [2002] NSWCA 393
Proprietors Unit Plan No 95198 v Jiniess Pty Ltd
[2000] NTSC 89
Campbell v Pye (1954) 54 SR (NSW) 308
Gray v Pearson (1870) LR5CP 568
Netage Pty Ltd v Cantley (1985) 6 IPR 200
Proprietors of Strata Plan No 6522 v Furney (1976) 1 NSWLR 412
Margiz Pty Ltd v Proprietors of Strata Plan No 30234 BC9303923
SAS v Scott Carver [2003] NSWSC 1097

PARTIES :
The Owners - Strata Plan No 43551 v Walter Construction Group Ltd

FILE NUMBER(S): SC 55051 of 2001

COUNSEL: F. Corsaro SC & J. Young for plaintiff
M.A. Pembroke SC & R. Dubler for defendant

SOLICITORS: Andreones Pty Limited for plaintiff
Corrs Chambers Westgarth for defendant

- 1 -

IN THE SUPREME COURT
OF NEW SOUTH WALES
EQUITY DIVISION
CONSTRUCTION AND TECHNOLOGY LIST

Master Macready

Friday 12 December 2003

055051/01 The Owners - Strata Plan 43551 v Walter Construction Group Limited

JUDGMENT

1 Master: This is the hearing of a separate question in these proceedings. A judge of the court has referred to me the hearing of the separate question which is the issue pleaded in paragraphs 15 to 26 of the amended defence the statement of claim. Shortly described the issue is:

“Does the plaintiff, as an owners Corporation, have standing to sue in its own name in respect of the alleged defects to the common property?”

The nature of the proceedings

2 The defendant’s submissions that I will adopt with some alterations conveniently summarise the proceedings.

3 The plaintiff is the Owners Corporation in respect of the building 17-25 Spring Street Bondi, New South Wales (the Building). It was constituted on 30 March 1993 upon registration of the Strata Plan No. 43551 (the “Strata Plan”). By ss18(1) and 20 of the Strata Schemes (Freehold Development ) Act (the “Development Act”), upon registration of the Strata Plan, the common property in that plan vests in the plaintiff as agent for the lot owners as tenants in common.

4 The plaintiff pleads that the defendant carried out the construction works of the Building pursuant to a contract with San Kuei Pty Limited (the Developer). It is further pleaded that the defendant owed the plaintiff , as “holder” of the common property under the strata legislation, a duty to exercise reasonable care in the carrying out of the construction…

Grounds of appeal

[14] The appellant contends that the primary judge erred in finding that the respondent had discharged the onus of establishing the matters required under the relevant provision.

[15] It was submitted that his Honour failed to give adequate weight to the evidence of the second witness, and that the findings of fact were not reasonably open on the material before the Court.

[16] The respondent, for its part, submits that no error is disclosed, and that the conclusions reached were well within the range of outcomes available to the primary judge.

Consideration

[17] It is convenient to deal first with the question of construction, as the resolution of that issue informs the remaining grounds advanced by the appellant.

[18] For the reasons that follow, we are of the view that the appeal should be allowed in part and the matter remitted for further determination.

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Details

Case: [2003] NSWSC 1177
Decision Date: 12 December 2003

CaseChat Overview and Summary

The dispute involved the owners of the strata plan and the builder of the building comprising the strata plan. The issue at hand was whether a lot holder in a strata plan is a necessary party to a claim in negligence against the builder of the building. The case was heard in the Supreme Court of New South Wales. The plaintiffs, the Owners Corporation, sought to bring a claim against the builder for alleged defects in the building's construction. The defendant, the builder, argued that individual lot holders should be joined as parties to the proceeding.

The legal issues before the court were whether the Owners Corporation had standing to bring a claim in negligence against the builder, and if not, whether the court could grant leave for the Owners Corporation to amend the proceedings to include the lot holders as parties. The court considered section 227 of the Strata Schemes Management Act 1996, which sets out the powers and functions of an Owners Corporation, and whether these powers included the ability to bring a claim in negligence against the builder. The court also considered the principles of joinder of parties in civil proceedings.

The court held that the Owners Corporation did not have standing to bring a claim in negligence against the builder as it was not a necessary party to the dispute. The court found that the Owners Corporation's role was limited to managing the common property and that individual lot holders had the primary responsibility for the repair and maintenance of their own lots. The court further held that the Owners Corporation did not have the power to bring a claim in negligence against the builder as it was not within the scope of its statutory powers. However, the court granted leave for the Owners Corporation to amend the proceedings to include the lot holders as parties, finding that this was in the interests of justice and would not cause significant prejudice to the defendant.

The final orders of the court were that the Owners Corporation was not a necessary party to the claim in negligence against the builder, but was granted leave to amend the proceedings to include the lot holders as parties. The court also ordered that the proceedings be stayed pending the amendment of the parties.

Orders