The Owners Strata Plan No 57164 v Yau

The Owners Strata Plan No 57164 (Plaintiff) sought to set aside a consent order approving a settlement agreement between the defendant, Mr Yau, and the Plaintiff's Executive Committee. The dispute arose out of a strata dispute between the parties. The case was heard in the Supreme Court of New South Wales. The Plaintiff argued that the Executive Committee lacked the authority to enter into the settlement agreement because the meeting at which the decision was made was invalid due to insufficient notice being given in accordance with the Strata Schemes Management Act 1996 (NSW), Sch 3, cl 6. Additionally, the Plaintiff contended that the Executive Committee did not have the authority to instruct counsel to enter into a settlement agreement due to the subject matter of the agreement. The Plaintiff also argued that the counsel for the Owners Corporation did not have the authority to enter into the settlement agreement on behalf of the Owners Corporation and that the Owners Corporation had not ratified the settlement agreement through conduct and acquiescence.

The court was required to decide whether the meeting of the Executive Committee was invalid due to the failure to give notice in compliance with the Strata Schemes Management Act 1996 (NSW), Sch 3, cl 6. The court was also required to determine whether the Executive Committee lacked the authority to enter into the settlement agreement due to the subject matter of the agreement and whether the counsel for the Owners Corporation had the authority to enter into the settlement agreement on behalf of the Owners Corporation. The court had to consider whether the Owners Corporation had ratified the settlement agreement through conduct and acquiescence. Finally, the court had to consider the source of power to set aside consent orders.

The court held that the meeting of the Executive Committee was invalid because the notice given did not comply with the requirements of the Strata Schemes Management Act 1996 (NSW), Sch 3, cl 6. The court held that the use of the word "must" in the statute indicated a mandatory requirement that could not be waived. The court held that the Executive Committee lacked the authority to enter into the settlement agreement due to the invalid meeting. The court held that the counsel for the Owners Corporation did not have the authority to enter into the settlement agreement on behalf of the Owners Corporation and that the Owners Corporation had not ratified the settlement agreement through conduct and acquiescence. The court held that it had the power to set aside the consent orders under section 69A of the Supreme Court Act 1970 (NSW) and set aside the consent orders.

The court ordered that the consent orders be set aside and that the matter be returned to the Registrar for further directions.