Zhang and Wu v South Sky Investments Pty Ltd

The applicants, Zhang and Wu, brought proceedings against South Sky Investments Pty Ltd, challenging the validity of certain community management by-laws that had been passed by the body corporate. The applicants sought relief on the basis that the body corporate had failed to comply with statutory obligations under the Body Corporate and Community Management Act 1997. The dispute was heard in the Supreme Court of New South Wales. The central issue before the court was whether the body corporate's failure to include a prescribed statement in the proposed community management statement, as required by section 217 of the Act, rendered the by-laws invalid. Additionally, the court had to determine if a typographical error in the proposed community management statement constituted a common mistake, which could lead to a material prejudice that might invalidate the by-laws.

The court examined whether the absence of the prescribed statement rendered the by-laws invalid. It held that the prescribed statement was not a fundamental requirement for the validity of the by-laws. The court found that the typographical error did not amount to a common mistake that caused material prejudice. The error did not alter the fundamental intent of the parties, and the applicants had not demonstrated that they were misled by the error. The court further held that the by-laws were valid as they had been passed in accordance with the statutory requirements set out in section 214 of the Act. The Supreme Court concluded that the applicants had not demonstrated any grounds to invalidate the by-laws.

The court dismissed the applicants' application and ordered them to pay the respondents' costs on an indemnity basis. The applicants were granted leave to appeal the order for costs on the indemnity basis. This decision highlights the importance of strict compliance with statutory obligations in strata title developments, while also underscoring the court's reluctance to find common mistakes or material prejudice in the absence of clear evidence.