The Owners – Strata Plan 74602 v Eastmark Holdings Pty Ltd; Eastmark Holdings Pty Ltd v The Owners – Strata Plan 74602 [2015] NSWSC 1981

The Owners – Strata Plan 74602 v Eastmark Holdings Pty Ltd; Eastmark Holdings Pty Ltd v The Owners – Strata Plan 74602 [2015] NSWSC 1981

The SMS as registered was, to the extent it allocated 100% of Switchboard C (electricity) costs to the residential lot, unjust within the meaning of the Contracts Review Act 1980 (NSW), justifying a variation to allocate such costs 60:40 between the residential and commercial lots. The Owners Corporation otherwise failed to establish that Eastmark breached any fiduciary duty, or that Strata Associates or Savills breached contractual or statutory obligations regarding allocation or payment of shared facility costs, or that any further substantial relief was warranted; proper disclosure and estoppel by convention defeated claims for breach and for interest calculation. Resolutions of the...

Jurisdiction
Australia
Judgment Date
24 December 2015
Procedural Posture
Principle Judgment; Cross Claims for Declaratory and Related Relief; Concurrent Levy Proceedings / Post Trial Judgment; Submissions to Be Made Regarding Consequential Orders, Calculations, and Resolution of Damages/outstanding Issues
Outcome
Partial relief; parties invited to make submissions as to what further matters remain for consideration and what orders should be made to implement the reasons for judgment.
Legal Topics
['construction of Strata Management Statement' 'allocation of Shared Facilities Costs' 'fiduciary Duties of Developer/promoter' 'contracts Review Act Relief' 'unjust/unconscionable Contracts' 'building Management Committee Voting' 'levies and Arrears' 'estoppel by Convention' 'shared Services (e.g., Electricity, Water, Gas)' 'appointment and Obligations of Strata/building Managers' 'contractual Limitations and Implied Terms']
['equity' 'strata and Community Title' 'contracts' 'construction Law'] ['construction of Strata Management Statement' 'allocation of Shared Facilities Costs' 'fiduciary Duties of Developer/promoter' 'contracts Review Act Relief' 'unjust/unconscionable Contracts' 'building Management Committee Voting' 'levies and Arrears' 'estoppel by Convention' 'shared Services (e.g., Electricity, Water, Gas)' 'appointment and Obligations of Strata/building Managers' 'contractual Limitations and Implied Terms']

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Procedural Posture

Principle Judgment; Cross Claims for Declaratory and Related Relief; Concurrent Levy Proceedings / Post Trial Judgment; Submissions to Be Made Regarding Consequential Orders, Calculations, and Resolution of Damages/outstanding Issues

Legal Issues

  1. 1 ['Whether allocation of costs of shared facilities under the strata management statement was fair and reasonable and if the SMS was unjust under the Contracts Review Act 1980 (NSW)' 'Whether Eastmark Holdings Pty Ltd owed and breached fiduciary duties to the Owners Corporation in the registration and implementation of the SMS' 'Whether the Owners Corporation or developer was entitled to vote at BMC meetings given levy arrears or interest requirements; effect of estoppel by convention' 'Whether building manager (Savills) or strata manager (Strata Associates) were liable for any over-allocations or errors in contributions/invoices for shared facilities, including whether contractual duties were breached or implied' 'Entitlement of Eastmark and Denison Street to carry out relocation of shared facilities, and whether Owners Corporation’s consent could be reasonably withheld, and the effect of unanimous BMC resolutions']

Ratio Decidendi

The SMS as registered was, to the extent it allocated 100% of Switchboard C (electricity) costs to the residential lot, unjust within the meaning of the Contracts Review Act 1980 (NSW), justifying a variation to allocate such costs 60:40 between the residential and commercial lots. The Owners Corporation otherwise failed to establish that Eastmark breached any fiduciary duty, or that Strata Associates or Savills breached contractual or statutory obligations regarding allocation or payment of shared facility costs, or that any further substantial relief was warranted; proper disclosure and estoppel by convention defeated claims for breach and for interest calculation. Resolutions of the...

Court Disposition

Partial relief; parties invited to make submissions as to what further matters remain for consideration and what orders should be made to implement the reasons for judgment.

Orders

  • ['Declare SMS is to be varied to allocate Switchboard C (electricity) costs 60:40 between residential and commercial lots;' 'Owners Corporation’s claims against Eastmark for breach of fiduciary duty dismissed; no further relief as against Savills or Strata Associates save for assessment of any damages from...