Australia City Properties Management Pty Ltd v The Owners – Strata Plan No 65111 [2020] NSWSC 1505

Australia City Properties Management Pty Ltd v The Owners – Strata Plan No 65111 [2020] NSWSC 1505

The Owners Corporation validly terminated the Caretaker Agreement on 17 August 2019 under cl 9.3(iv) for gross misconduct/gross negligence, including improper use of electricity paid for by the Owners Corporation and failure to report unresolved faults in the fire alarm system, with such termination effectively ratified by later general meeting resolution, and the subsequent operation of cl 10 (compulsory process for dealing with Caretaker’s Lots). The Agreement, as varied, was not protected by transitional statutory provisions and was subject to a maximum 10 year term for variations post relevant legislative changes.

Parties
First Plaintiff/cross Defendant: Australia City Properties Management Pty Limited; Second Plaintiff: Bo Yun Wang; Defendant/cross Claimant: The Owners - Strata Plan No. 65111
Jurisdiction
Australia
Judgment Date
28 October 2020
Procedural Posture
Principal Judgment / Final Judgment After Hearing
Outcome
Declarations and orders made as summarised at [277]-[280]: Owners Corporation's termination of agreement declared valid, cl 10 regime engaged; damages and compensation awarded to Caretaker for deprivation of possession, further claims dismissed.
Legal Topics
Caretaker Agreements, Building Manager Agreements, Termination of Contracts, Statutory Interpretation, Contract Variation, Remedies for Breach of Contract, Misconduct and Negligence in Strata Management
Land Law Equity Strata Title Caretaker Agreements Building Manager Agreements Termination of Contracts Statutory Interpretation Contract Variation +2 more

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Parties

Australia City Properties Management Pty Limited

First Plaintiff/cross Defendant

Bo Yun Wang

Second Plaintiff

The Owners - Strata Plan No. 65111

Defendant/cross Claimant

Procedural Posture

Principal Judgment / Final Judgment After Hearing

Legal Issues

  1. 1 Whether the Owners Corporation validly terminated the Caretaker Agreement under cl 9.3(iv) for gross misconduct or gross negligence
  2. 2 Whether the 2010 and 2015 Deeds of Variation were valid and their effect on the agreement's duration
  3. 3 Application and impact of transitional and current strata schemes management legislation

Ratio Decidendi

The Owners Corporation validly terminated the Caretaker Agreement on 17 August 2019 under cl 9.3(iv) for gross misconduct/gross negligence, including improper use of electricity paid for by the Owners Corporation and failure to report unresolved faults in the fire alarm system, with such termination effectively ratified by later general meeting resolution, and the subsequent operation of cl 10 (compulsory process for dealing with Caretaker’s Lots). The Agreement, as varied, was not protected by transitional statutory provisions and was subject to a maximum 10 year term for variations post relevant legislative changes.

Court Disposition

Declarations and orders made as summarised at [277]-[280]: Owners Corporation's termination of agreement declared valid, cl 10 regime engaged; damages and compensation awarded to Caretaker for deprivation of possession, further claims dismissed.

Orders

  • Declaration that Owners Corporation validly terminated Caretaker Agreement under cl 9.3 as of 17 August 2019.
  • Declaration that upon such termination, cl 10 of the Agreement operates and binds the parties.